From November 2007

By Michael Hartnett

PETCO relies on e-mail to keep its pet-loving customers informed about products and services offered through its 850 store locations and e-commerce operations. With the increased prevalence of fraudulent e-mails and mountains of spam, however, the retailer needed an added level of security for these critical communiqués.

The answer PETCO found was CertifiedEmail by Goodmail Systems, a system through which retailers can provide their customers with another level of protection from fraudulent e-mails and, through increased consumer confidence, promote higher click-through rates.

Based in Mountain View, Calif., Goodmail Systems has created a “unique, trusted class of e-mail” that provides a safe and reliable means for consumers to identify authentic messages from legitimate volume senders. In addition to being selective about the clients it represents (such as requiring low rates of consumer complaints), Goodmail certifies the legitimacy of e-mails with “cryptographically secure tokens” signifying that the sender has met strict standards for best e-mail practices.

As a practical matter, that means consumers who receive CertifiedEmail messages will see an icon testifying to the fact that they are secure and legitimate, along with a blue band that further identifies that e-mail as “certified.” These indicators also serve a marketing function by distinguishing them from other Inbox traffic and making them more likely to be noticed.

With its loyalty program, online shopping and multiple newsletters, PETCO has a lot to talk about. Each month it sends an average of seven million e-mail messages to communicate information about products and services consistent with individual recipients’ shopping habits and interests.

“Those are our two main sources of e-mails – our loyalty program, which customers sign up for, and online purchases,” says John Lazarchic, vice president of e-commerce for PETCO. “We also have monthly newsletters [one each for dog and cat owners], and these are targeted based on customers’ past interaction. We present offers for services like grooming, dog training and pet sitting. We provide information about store locations and we have merchandise-specific e-mails about individual vendors, based on prior purchases.”

Security is a real concern for the privately held, San Diego-based retailer. “We have seen the PETCO name hijacked by spammers,” Lazarchic says. “They sent offers to win gift cards and our customers didn’t know the offer wasn’t coming from PETCO. Anything that can differentiate our communications from competitors and spammers is a huge value.”

Goodmail Systems’ research shows that its clients’ click-through rates and e-mail business increase an average of 25 percent after implementing CertifiedEmail.

“There is an enormous loss due to fraud, but there is also an implicit loss: What is the impact of people not reading their e-mail?” says David Atlas, vice president of marketing for Goodmail Systems. “People can TiVo past commercials, but with e-mail they may stop reading it because there is too much junk. The icon on our clients’ e-mail differentiates theirs from the others.”

Another benefit: CertifiedEmail messages “are not filtered out because the ISPs know the token can be trusted, so messages are not being inadvertently thrown into a junk folder” or blocked because they were deemed inappropriate.

Secure Computing, a provider of enterprise gateway security, based in San Jose, Calif., reports that spam currently accounts for 88 percent of all e-mail traffic. Goodmail cites a security analysis by Gartner that estimates consumer anxiety over Internet security caused a $2 billion loss in e-commerce and banking transactions last year.

Certain expectations
Atlas draws an analogy between CertifiedEmail and Federal Express. “There are certain expectations that what’s being delivered must have value, must be important,” he says.

To ensure that CertifiedEmails are recognized at every juncture between transmission and delivery, Goodmail’s certification methods are supported by AOL, AT&T, Comcast, Cox Communications, Road Runner, Verizon and Yahoo!, as well as those companies that manage mass mailings for clients.

And speaking of clients: Goodmail rejects 75 percent of those who apply for its services, Atlas says, with consumer complaints the most frequent cause.

“What we’re doing is creating a secure class of e-mail, which lets the consumer know the message is real and that it is something the consumer requested or ‘opted in’ for,” Atlas says. “And that goes to the issue of complaint rates.” Goodmail scrutinizes the ISP records of potential clients, “and we require that the rate be 0.22 percent – that’s 2,200 messages per million,” he says.

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