Fluttering of a butterfly can cause a tornado.

The Daily Yahoo Newsletter experiment was the proverbial fluttering of butterfly that caused a tornado for Yahoo CRM Marketing team.

Yahoo used to outsource the CRM operations to Cheetahmail. The deal was – one dollar got you 100 emails. Or 1000 emails. Or 10,000 emails. I forget exactly what. For now, let us assume 1000 emails. Reasonable?

There are more than 300 million people in USA. If we reached out to 100 million people over email, daily, then, we would need to spend $100K per day. That is $36.5 Million every year.

This is just for the daily yahoo newsletter alone. There were all these other stuff that we were doing.

Over 5 years, we would spend around $200 million dollars.

That is a lot of money to spend on sending emails.

Especially, when Yahoo itself owns the Yahoo Mail.

And most of the audience – I mean 99% of the audience – is on Yahoo Mail.

Scalable models – i.e. pay per 1000 emails – were all eliminated. The only remaining options were in house OR a non-scalable model.

There was one bidder who offered non-scalable model.

They said that they can install their software on Yahoo hardware, and provide software updates. So long as Yahoo took care of the hardware, they would only charge licensing fees. And support fees.

Sounded good enough.

A deal was struck on Christmas 2013. Cheetahmail was put on notice – March 31, 2014 was the last day. Less than 100 days.

The new vendor was Strongview – now called Selligent. They were uncomfortable with the timeline. But they wanted the deal. And knew that we wanted it too. So, they said that they will deliver Daily Yahoo, and support any email campaign that we need – but they will not do audience segmentation, data storage, X, Y, And Z. Pretty much, all the basic CRM features that we take for granted were pulled off the table, so long as Daily Yahoo was working.

We realized how great Cheetahmail was – how incredible every single feature and customer service was great – that we took for granted!

We were in Marketing hell for the next few years. The first 3 months, the programmers made the audience list by hand. Then, we had a UI that did the job, but only programmers could use it. Then, we had the UI that was usable by Marketing Managers.

We lost ability to do great reporting and be strategic. We lost people on our side. We did not get extra headcount. We got extra projects. Everything suffered.

Everything – except Daily Yahoo.

We were sending Daily Yahoo newsletter to 50 million people in US. It was making money. The CFO was happy.

How Daily Yahoo Makes Money – that is the topic of the next post …