CHALLENGE
Back in 1997 when everyone and his brother was trying to figure out how to make money on the Internet, Justin Sewell and his brother were doing the same.

They both hated the so-called motivational posters that hung on the hallways of corporate America; for example -- glossy photos of teams of rowers with a slogan about teamwork, or a cute kitten clinging to a branch with the slogan 'Hang in there'.

Why not, they wondered, produce a line of posters using the exact same photographs but featuring 'demotivational' slogans instead? For example -- that same picture of rowers would have the caption, "It's amazing how much easier it is for a team to work together when no one has any idea where they're going."

Their ideas were funny enough. But can you make a living out of selling your own books, posters, and calendars of office humor on the Internet if your name isn't Scott Adams?

CAMPAIGN
The Sewell's and their partner Dr. E.L. Kersten (who has since become infamous as the 'bad manager' photographed on the site) founded Despair Inc. They soon discovered it's fairly easy to get great viral traffic if your content is funny enough.

(Side note: They also learned well-meaning fans would steal the content to post elsewhere. Now Despair includes an URL on all images that a fan might be tempted to take.)

The problem was, how do you turn one funny poster into a business? Enter email.

Step #1. Grow a "permission harassment list"

Aside from converting chucklers into shoppers and shoppers into buyers, the site's main purpose became gathering opt-in email names.

The team added an opt-in request to the shopping cart. They also added an "Email to a friend" button on a highly visible place on every page of the site (see sample below.) Everyone who used it was asked if they also wanted to sign up for the newsletter at the same time.

Step #2. Branded voice and tone for all email communication

Next they used every facet of the email program to turn a one-laugh joke into an ongoing brand. Every single communication surrounding email was copywritten from a 'demotivational' brand perspective. For example, here are some excerpts of copy:

o Opt-in page:

"By entering your email address, you too can experience our revolutionary new Permission Harassment™. Be the first person in your miserable company, disaffected dormitory or dysfunctional relationship to: know when new products are released that might further exacerbate your frustrations…"

o Privacy policy:

" Despair, Inc.® does not rent or sell personal information about you with other people or non-affiliated companies. Frankly, most of our customers aren't exactly the kinds of people you want to share with others."

o Order confirmation email:

"I'd like to personally welcome you to our growing body of Dissatisfied Customers(tm), but to do so might evidence some actual concern for service and protocol. This might then lead to customer satisfaction, which would defeat the purpose altogether. That is why you have received this generic, form-generated email, written by some nameless lackey in our marketing department."

o Shipping confirmation email:

"If you have received this email, it means that your credit card information proved valid and that your order has been sent. You might assume now that we have your money that you're in for better treatment. You might also assume that if you try really hard, you will succeed. But your assumptions would, in both cases, be completely wrong."

Step #3. Email campaigns to the house file

Having grown a list, the team began to test a variety of promotions, including:

-> Store blackout days -- Once a year during the worst sales month (typically June or July) the team run a 'black out' promotion for 24 hours. During that time only house list members who click from an email promotion can get into the store where they'll see a variety of special discounts and giveaway offers.

"Other visitors will get a user ID and password prompt, and they'll be annoyed and feel like something's wrong," explains Sewell.

-> New stuff alerts -- Like you would expect, house names are sent an HTML note with a photo of a new item and a click link to go buy it. Whenever possible the team try to coordinate timing with printed direct mail and catalog mailings to the same list to boost response.

-> Not-new stuff alerts -- These are emails that promote a particular item that's been in the store for awhile, but the team feel could have more sales.

-> Video alert -- The team bought a (very) fancy digital video camera and started creating their own three-five minute demotivational videos featuring Dr Kersten. House names were sent an HTML email with a photo of an empty movie screen, they then had to click to the site to see the video itself. (Link to sample below.)



RESULTS
Despair Inc's house email list is now over 100,000 names, with 100s of new names joining each average weekday. The company itself still only has three employees (accomplished by relentlessly outsourcing everything possible aside from product development), and revenues in the millions.

The site's email programs get stunningly high click rates. For example, an announcement about the new 2006 Despair calendar got an 85% clickthrough. (That's a percent of total clicks divided by names sent minus hard bounces, so obviously there's quite a bit of forwarding going on from the customer base.)

What doesn’t work? "We've never had an email that was a catastrophe," notes Sewell," but we've had a couple where we didn't get the response anticipated. If they don't feel like they are hearing something that's news, then they feel it's just a big dump of old content that they already have seen on the site.

"Then that's just like a lot of other email newsletters they might be getting from people who are less cautious about how often they send email."

Lesson learned -- never again send an email campaign to Despair Inc list members promoting a product that's been on the site for a while unless there's a super-special new offer for it. Old news is not welcomed news.

In response, the team now sticks to a rigorous non-schedule for email. They won't ever send a campaign because "it's time" to do one. They only send when there is honestly something interesting to talk about.

On the other hand, black-out days have been a tremendous success. "It's sort of an exclusive buying binge I guess," says Sewell. "We might have in a day the same amount of sales or more that we have normally would have had throughout the entire month."

When we remarked that other emailers would be a bit jealous of Despair's success, Sewell said, "I know we're not doing anything super-radical. A lot of people are further out on the learning curve in the way they are tracking and relevancy."

But, he's learning fast. Useful links related to this article:

Creative samples -- Lots of them: http://www.marketingsherpa.com/despair/study.html

iPost - the email service provider Despair relies on to run its database and broadcast campaigns http://www.ipost.com

Despair Inc http://www.despair.com