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Finding Value in An Email Marketing Service ProviderOctober 2007
"Price is what you pay, value is what you get." - Warren Buffett (1930 - )
Introduction come on a disc or DVD and are installed on the organization's How much do you pay your email service provider (ESP)? Do you server. It's not hosted on a vendor's server. Email as an accepted, pay per email transmission? What features do you have access to and often preferred, marketing medium became the norm. The as part of your service agreement? Does your ESP offer advanced practice spread through the marketing ranks like wildfire and, as features or does the service basically amount to loading email it did, the market became crowded with competition.addresses, composing a message, and sending it? With the new "boxed" solution, email marketers didn't have to Here's a more important issue-do you know the answers to these worry about building an in-house software platform to send questions? thousands of emails at a time. Instead, they could focus more on developing compelling marketing messages that sold their Many email marketers look for the lowest price point and equate products and services-the goal of marketing in the first place. that to the best value, but the lowest cost may not be the best value. The industry overall has not done a good job of defining The solutions worked for a while until two major shifts in what constitutes a good value. Email service providers are often the industry occurred. First, email lists grew to the point that lumped together in one big group with average cost per email marketers required more internal technical resources, such as transmission serving as the comparison points for potential expanded processing power and bandwidth, to manage them. clients. This lump categorization might have worked in the early Urgent email messages were held up because internal servers days of email marketing when large companies (with even larger were crowded with email marketing blasts. Second, the rise of budgets) ruled the email marketing airways. It doesn't work spam presented deliverability challenges. In a recent survey, only today. Small businesses have just as much marketing savvy as their 40 percent of marketers reported delivery rates between 90.1 larger counterparts and the use of email as a dominant marketing to 100 percent (EmailStat Center, www.emailstatcenter.com). medium is higher than ever. The ESP was coming of age at the same time as marketers were dealing with these challenges. Understanding how ESPs determine price and what features you're paying for is an important part of being a successful email ESPs are web-based services that allow anyone, regardless of marketer. This white paper attempts to unlock some of the limitations on internal resources, to send massive quantities of mysteries of email marketing pricing by reviewing why price is so email transmissions. ESPs closed the gap between the very savvy important, discussing different pricing models, and creating value marketer with the resources available to use the increasingly categories to help marketers make the right choice and achieve popular marketing medium and smaller businesses that were their marketing goals. limited by their size.
Today, the majority of email marketing is practiced using an ESP. Environmental Scan - Why is Price so Important? More than 100 ESPs currently service marketers-marketers Digital Equipment Corporation sent the first, bulk commercial that have a wide variety of needs and audience size. Some ESPs email (albeit unsolicited) in 1978 on ARPAnet or the Advanced will only service small businesses while others work only with Research Projects Agency Network, which was the predecessor to Fortune 500 companies. The one thing all ESPs have in common the global Internet. Since then, email marketing has grown into a is that they are in business to send email. They research price thriving industry, commanding almost $2 billion per year. points, define price packages, identify basic and advanced features, and solicit new clients. Email marketing was reserved for the privileged few in its infancy-the ones who had the resources to develop their own With the large number of ESPs serving the industry, (and software and hardware solutions. These systems were complex and that number is still on the rise) commercial email became a produced... [download for more]
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