Acquisitions, consolidations, and advances in technology have all changed the landscape for email service providers. Red Pill Email, a consulting firm, offers a vendor guide to help sort through possible email vendors.
The landscape of email service providers is continually evolving, with advances in technology and changing needs of brands and merchants. In this article, I’ll address factors to consider, in 2017, when choosing an email service provider.
Evolving Industry
In the past few years, many leading email service providers have been acquired or have shifted focus to expand basic offerings. Shopping for email providers therefore becomes daunting, with new company names and capabilities. Here are a few examples.
- ExactTarget. Acquired by Salesforce.
- Silverpop. Acquired by IBM.
- Responsys. Acquired by Oracle.
- Yesmail. Acquired by Infogroup.
- CheetahMail. Acquired by Experian.
- Bronto. Acquired by NetSuite.
As email service providers grow and add valuable brands to their client roosters, larger companies have acquired them to diversify and complement their offerings. Data plays a crucial role in email marketing, which attracts data-centric organizations to the industry.
All of this is important to know when shopping for a vendor, as capabilities and functionality may change after an acquisition.
Service Levels
Email service providers typically focus on one of three market segments.
- Enterprise. These are larger providers with sophisticated tools and functionality. They typically handle high-volume senders. Examples of enterprise-level providers include IBM Marketing Cloud (formerly Silverpop), Salesforce Marketing Cloud (formerly ExactTarget), and Epsilon.
- Mid-market. Mid-market providers cater mainly to midsize companies. These providers are fairly sophisticated in their offerings and handle relatively moderate volumes. Examples of mid-market providers include Dotmailer, Postup, Bronto, and Delivra.
- Small business. Small business providers cater to novice and mid-level companies. These providers have increased their service offerings to retain clients, to keep them from moving to mid-market vendors. Examples of small business providers include MailChimp, Constant Contact, and VerticalResponse.
Features and Capabilities
A well-suited email service provider should offer the basic functionality needs of your company, plus additional features to potentially use in the future. In my experience, most ecommerce merchants use only a small percentage of their provider’s features. The key is to balance not paying for unnecessary features versus paying for those you’ll need later on.
The easiest way to accomplish this is to make a checklist of (a) the basic must-have features, (b) those that are nice to have, (c) and those that are a bonus. Check off providers that do not offer the must-haves, which will likely include, regardless of market segment:
- Email template or WYSIWYG builder;
- Built-in A/B testing;
- Social media integration;
- Partner integration to allow for seamless tracking;
- Triggered and autoresponder capabilities;
- Advanced reporting, including mobile vs. desktop.
One often-overlooked area to research is data storage capabilities and how data is updated. This could include updating your data with behavioral actions — such as a sale or other conversion from an email promotion — and being able to take action on that data.
Pricing Models
Many enterprise and mid-market providers charge on a cost-per-thousand basis — i.e., a fee for each deployed email. This CPM rate usually drops for higher annual volumes, but many providers require an annual contract to obtain the lower rates. Small business providers typically charge a flat rate based on the size of an email list. VerticalResponse, for example, charges $120 per month for lists of 5,001 to 10,000 email addresses.
In addition, some providers charge additional fees, such as the following.
- Monthly management. These could cover a dedicated account rep our other services offered by the provider.
- Advanced features. Some advanced features could have a-la-carte pricing beyond the base CPM or monthly fee.
- Dedicated IP address. Dedicated IP addresses typically involve additional fees.
Review the pricing models to find the right match for your sending patterns and needs. When it comes to email providers, in my experience, you truly get what you pay for. Lower-cost options typically have limited functionality.
Resources
Red Pill Email, a consulting firm, publishes an independent (and free) email vendor guide that compares and contrasts providers, although it does not include small business providers. Email Vendor Selection offers a similar guide.