Be Relevant!

How to Double Your Clients: 5 Tips for ESPs to Survive in a Commoditised Market!

In a previous BeRelevant post, I offered 10 Tips for Signing Up with a New Email Service Provider. Much of this was based on getting the best price you possibly can.

Fred Testard left a great comment on the article which he called "The voice of the ESP". Here was the gist of it:

I understand that a marketer wants to pay the lower prices, I believe that the marketer should instead be willing to pay for the right price.

On the one hand, ESP market is very competitive and CPM rates can't stop getting lower and lower. On the other hand, email marketing requires more resources to monitor, analyse and understand campaign results as to provide marketers with relevant consulting.

An ESP provides much more than just a powerfull MTA [mail transport agent] with a delivrability monitoring... and it has a cost.

Here are 5 cheeky thoughts on how ESPs should change the way they pitch & the way they price, all aimed at standing out in a market that's becoming more and more commoditised.

1. Deliverability

Problem: You're now standing on a level playing field. 3 years ago deliverability was a differentiator (THE differentiator?). Today, almost every ESP has their own in-house team, everyone's set up with Return Path.

Solution: You can use this as a sales tool, but if your prospect is speaking to any other ESPs they'll be saying the same thing. Move on to the next stage. You've got your clients' emails into the inbox, now how are you making them perform?

2. Technology

Problem: The technology road you've gone down is already far ahead of your clients' internal technical limitations. You can do automated segmentation AND automatically multivariate test it AND feed the results back into the next loop of the triggered campaign. Probably 5% of your clients can integrate any of this with their in-house systems & databases.

Solution: Build technology that requires close to zero technical implementation for your clients. Build technology that is 'game changing', rather than evolutionary.

3. Price

Problem: 3 weeks ago, you told me you could not possibly go below $4 CPM. Today, now that you're out of the running & my CEO has signed off with your competitor, you're telling me you can do a fraction of that.

Solution: Genuinely, sincerely, offer your lowest CPM price to every client. Publish it on your website. If you ever drop it, pass the new price on to all your customers.

4. Tie-in

Problem: The longer I tie myself in with you, the cheaper you're willing to go. But if you suck after month one, I've just wasted 35 months budget!

Solution: Allow trial periods. Allow break clauses. If you offer me less risk than your competitor, I will look closely at you. If you offer me no risk at all, why wouldn't I try you out?

5. Consultancy

Problem: You want me to sign with you for 24 months & spend 5-figures a year on 'strategic services' because your in-house consultants are the best. How can I know they're the best without using them? How do I know I'm not going to be passed to an intern in 6 months time? And how can I know you're telling me the truth after you've dropped your price 5 times in as many weeks? (ok, maybe that's a cheap shot :)

Solution: Telling me your consultants are the best doesn't work, you have to show me. Offer consultancy on a pay-per-performance basis. Put together methodologies for improvement rather than ad-hoc deep dives.

Or, how about this, offer the consultancy up-front & for free. Give me the strategy document to present to my board showing exactly how we'll use email to increase results and why we're using your ESP to do it.

6. Bonus Points

Problem: All of your customers want to get more & more out of their email programs, but you have finite resources.

Solution: Wait, you have 2,000 email marketing managers talking to you every day and you HAVEN'T set up a mechanism so they can communicate & help each other?

What do you think?

Are you a marketer? Are you an ESP? What would you do to change the market? Tell us in the comments!

How to Halve Your Email Costs: 10 Tips for Signing with a new Service Provider

I’m just about to sign a new contract with an email service provider. The difference between the highest quote we were given and the final price we’ve agreed is staggering (we’re paying well under half).

This is for the same level of service, the same monthly volume and really similar (if anything, slightly better) functionality. This is not a one-off – the same thing happened last time, and I’ve now been through this several times with web analytics providers, list brokers, online ad suppliers, etc.

Based on all of that, here’s a quick guide to getting what you need from an email service provider, without paying more than you have to. Here we go, 10 tips:

1. Decide What You Want First

The standard way to decide on a platform is to speak to a bunch of providers & let them tell you why you should use them. Then compare what they all offer and go with the best you can afford.

The cheaper, better way to do it will take about an hour of your time up front: Write down a checklist of exactly what you need before you speak to any service providers.

Put your requirements down in Excel. Speak to a few companies & note down how they match up to your list. Fill in costs for each, and you have an easy comparison of your essential needs vs the costs. It’s a subtle difference: “This is what it costs to get what we need” vs “This is what it costs to get what they offer”.

2. Costs: Know what you're buying & how the pricing works.

The basic costs of Email Service Providers are:

• Initial Setup & Training.
• CPM rate. This is your "cost-per-thousand emails sent". 'M' stands for 'Mille', which is Latin for 'Thousand'. Usually you'll make a minimum commitment (eg "I'm going to send 1.5 million emails a month") and they'll give you a rate for that.
• Monthly service charges & support costs.
• Standard services. EG, hourly rate for extra development on your behalf.
• Strategic services. (consulting)
• Hidden extras. Ask to see *all* potential costs. Get it in writing if possible.

Get all of these costs before you think about negotiating rates down. If you push down on CPM before they've told you monthly service costs, they may bump those up to compensate.

3. More on Costs: Ask early & always negotiate down

Ask about costs early on (never say “we’ve got a budget of $100k for year 1). You’ll probably be given 2 costs: A ‘rate card’ (the costs they publish to the world) and ‘your price’ (the cost they’re willing to offer you).

In my experience, these 'your price' quotes can still be negotiated down much further. The prices they’re most likely to budge are CPM and Initial Setup costs. You can often negotiate down further right up to the day you sign.

4. Get your Volume Commitment Right

The more emails you'll commit to send each month, the lower your ESP will go on price. EG, commit to 2-million emails a month and they may offer you $1.50CPM. Commit to 10-million and they may offer you $0.75CPM.

It's important to get this right: If you commit to 2-million and you only send 100,000, they'll charge you for 2-million anyway. If you commit to 2-million and you send 20-million, you probably could have gotten a better rate in the beginning.

The easy way to figure it out is to look at: How big are your email lists? How often do you send email? How much do you want to grow/shrink your lists? How much do you want to increase/decrease frequency?

5. Ditch the Consultancy Services

An in-house consultant will naturally be biased by the limitations of their own tool & their own company. For example, they're never going to say "hey, you're coming up to the end of your contract. I think you've outgrown the functionality our tool offers. You should take your business elsewhere".

My personal opinion is you’re always better off saving the money & using an independent consultant (Tamara, for example).

6. Ditch the Training Too

Most ESPs insist you have some sort of training at the very beginning. My advice is to take the absolute minimum to get you going at first. There are 3 reasons for this:

1. You just won’t know how much training you need until you’ve used the application for a few weeks.
2. If you get all the training on day 1, you’ll have forgotten any advanced stuff by the time you’re comfortable enough to use it.
3. If you do need extra training later on, you can always get it for the same price (or cheaper) than on day 1.

7. Ask for a longer contract

This sounds like a bad idea: The longer you're tied in, the bigger the risk. If things go wrong 3 months into a 3-year contract, you’re stuck! But, the longer your contract, the more commission your sales rep will get. Because of that, they’ll often offer you a cheaper deal to sign for longer.

There is a win-win: A longer, cheaper contract with break clauses. EG, sign up for 24 months, but agree that at each 3-month point you can give 3 months notice to cancel the contract.

8. Ask "if we sign by the end of the month..."

Your sales rep will have monthly targets. They'll get commission and bonuses if they hit their target, and even more if they over-achieve it. You can often commit to sign up by the end of the month in return for a better deal.

It's also worth remembering that it's really tough for them to go back on a deal. If they're willing to charge you $X to sign before Monday & you don't sign, 9 times out of 10 the deal will still be there on Wednesday.

9. Ask "who do you usually pitch against?"

Ask the question "Who do you usually come up against in pitches?". This achieves 2 things:

1. You can then speak to their closest competitors & find out if they’re better/cheaper/both.
2. Companies will often offer special pricing when pitching against their closest rivals.

Sales people are also naturally competitive. If they pitch against ACME corp 7 times and lose, they're more willing to be flexible with price if they can win the 8th.

10. Speak To Other Clients

If a company's system isn't suited to you, their sales people may not tell you. Their clients will give you a far less biased picture. Ask the company to provide references. Ask around your network to see if anyone else is using them. Ask the Email Marketers Club.

If another client says "we're doing the same volume as you and paying half the price," your ESP should either be able to give you a better cost or a really good reason why they can't.

11. Be nice!

Here’s my bonus tip: Be nice! Life’s much more pleasant & it can benefit your budget too. The person on the other end of the phone is far more likely to help you out if they like you. If you make their life really difficult, on the other hand, there is no emotional reason for them to do anything for you.

Any other tips? Experiences? Disagree? Work for an email service provider? Let us know in the comments!

List Hygiene and Relevance Are Key

In this article Ken Magill reminds us that if enough recipients think our e-mail program is garbage, no e-mail service provider in the world will be able to prevent spam complaints, and the resulting delivery troubles. Likewise, if we refuse to clean dead addresses off our list because one of those addresses just might, maybe, someday make a purchase, there isn’t a single ESP out there who will be able to stop Yahoo, AOL, and Microsoft from diverting our messages into recipients’ spam folders or blocking them altogether.

He's dead right! So is this quote:

That we still have marketers—the majority of them, apparently—who believe that the ESP they choose will have a significant effect on their deliverability means some ESP reps are selling marketers on lies, or the marketers are deluding themselves.

Source: Direct

Choosing An Email Service Provider: Some Useful Tips

Over on the E-Consultancy blog, Dela Quist offers some excellent tips to help you find the right email service provider:

• Go for the larger companies. Their servers are going to be more robust, they’re likely to have more staff, including a big ISP relations or reputation management team and have the ear of companies such as AOL, Microsoft and Yahoo!.
• In particular, ask how many people they have working on ISP relations and reputation management. Ask whether their reporting can give you a breakdown by domain so you can see which ISPs are causing you problems.
• For those that prefer it, there are some very good European ESPs to choose from, but don’t be afraid to work with an American company as they dominate the email delivery space. This truly is a global business and experienced companies of scale are often US-based.
• Establish how familiar they are with your needs. It makes sense to try to find out what percentage of their clients are of a similar industry, size and have similar needs to you. You can then select the provider with the most clients matching your scale and requirements.
• Don’t be seduced by functionality.Focus on the functionality you need now or in the very near future. What you’re really looking for is ease of use and interface speed. The delivery service you choose should have a user-friendly, intuitive interface that makes setting up and automating repetitive tasks straightforward.
• Support is also very important, particularly if you’re going for a self-service solution. So ask how quickly they turn around queries, whether they offer telephone support or just email.
• Email marketing is all about understanding how your customers are interacting with your communications. So the reporting interface is absolutely critical and there are significant differences between products. For example, not all technologies allow you to group your mailings by campaign. In some ways, it’s more important to look at the reporting interface than at deployment functionality. Good email marketing is a constant learning and feedback loop, which requires detailed reports.

Source: E-Consultancy.com

The Forrester Wave: Email Marketing Service Providers, Q4 2007

What differentiates the leaders in the highly competitive email marketing industry? Learn how the 8 evaluated vendors stack up across 64 criteria in this latest evaluation from Forrester Research. 

Download this report from the Responsys website. And while you're there, check out the other white papers too :-)

Global List of Email Service Providers

Over at the Email Marketer's Club we've compiled a list of email service providers (ESP) per country. Thanks to Matt Vernhout and the other Club members, we already have 153 companies listed. Check it out here (login required) and help us complete the list!

RFP Template for Email Vendor Selection

E-consultancy produced a couple of RFP templates, including an Email Marketing Request for Proposal template.

Five Keys to Selecting an Email Service Provider

In this article, David Baker sums up these five critical questions you need to ask yourself before selecting a new email delivery partner:

1. What type of service do you need?
2. How much flexibility do you have with budget and contracting?
3. How much integration do you really need?
4. How do you transition from one vendor to another effectively and efficiently?
5. What type of partnership do you want?

Read the full article here. It offers some excellent insights!

20 Questions to Ask When Evaluating an Email Marketing Agency

Paula Skaper is frequently asked what makes a good email marketing agency – and how to separate the good from the mediocre. While it’s true that anyone who has a basic understanding of HTML can code an email message, it takes a real specialist to create a message that works equally well in the 35+ possible environments, with graphics on and graphics off, with preview mode on and off. And even the most talented designer in the world won’t help if the technology is limited, or deliverability is bad. Or worse – you can’t know what’s working because the reporting is incomplete!

So she came up with a list of 20 questions to ask when evaluating an email marketing agency.

Planning To Switch Email Marketing Providers? Read This First.

Some of you might need more advanced features, while others might want to improve their delivery rates. Whatever the reason for wanting to switch email marketing providers (ESP), now or in the future, keep this checklist in mind as you make the transition from your old technology to the new one:

• Verify IPs.
• Confirm authentication.
• Define reporting.
• Establish benchmarks.
• Apply unsubscribe and bounce lists.
• Update your content/forms.
• Slowly ramp up e-mail.
• Test before going live.
• Get your staff on board.
• Talk to your account executive.
• Use your ESP's resource center.
• Attend the ESP's best practices sessions.
• Sign up for the ESP's newsletters.

The full article explains each of the above points in further detail.

Things to Consider when Choosing An Email Service Provider

Vertical Response is offering a white paper called "Eight things to consider when choosing an ESP". The list of criteria they offer is quite comprehensive, but in my opinion, it misses one important criteria: if you will use the ESP to send emails in multiple languages you should test the capabilities of the ESP in these different languages.

This is a piece of advise I'm offering from my own personal experience working with a US-based ESP that did not support special characters for any of the European languages like umlauts, accents etc... The workaround was extremely labout intensive, so please make sure to test this if it applies to you!

Source: DMNews.com

PS. Vertical Response are an email service provider theirselves. If you're looking for a more objective source or you want to compare vendors against each other, you might want to have a look here:

• MarketingProfs' Vendor Selector for Email Service Providers
• JupiterResearch's E-mail Service Provider Market Guide, 2005
• E-consultancy's Email Marketing Buyer's Guide 2005 (UK)
• Choosing The Right Email Service Provider For Your Campaigns

Most of these sources focus on the US market. I don't know if there is a source for European vendors, but I would be very interested to find out. If you happen to know one, please let me know!

E-mail Service Provider Market Guide, 2005

JupiterResearch recently released an Email Marketing Buyers Guide, a detailed evaluation and ranking of 30 vendors. Jupiter evaluated each vendor in the categories of client references, product demo, financial stability, services expertise, application features such as usability and functionality, partnerships, and technology integration. It also compared the needs of b-to-b marketers with those of b-to-c marketers in a bid to help the former make better vendor decisions.

The company then based overall value, suitability and breadth on the distinct needs of six types of marketers -- small business, service-oriented, low-volume promotional, low-volume newsletter, high-volume promotional and high-volume newsletter.

Jupiter Research included the following vendors in the report: Accucast, BlueHornet, Bluesky Factory, BlueStreak, Click Tactics, Cheetahmail, Constant Contact, Digital Impact, DoubleClick, Dynamics Direct, e-Dialog, Email Labs, Epsilon Interactive, Exact Target, Listrak, Lyris, Harte-Hanks Post Future, Postmaster, Quris, Responsys, Rightnow Technologies, Silverpop, SKYLIST, Subscribermail, Talisma, Topica, Twelve Horses, Vertical Response, Yesmail and Zustek.

Here's some insight into the firm's criteria and rankings, provided by Dawn Anfuso, editor of iMedia Connection.

Email Marketing Service Providers: Buyer's Guide

MarketingProfs announced the availability of their first Vendor Selector today. It allows you to find and compare Email Marketing Service Providers in seconds (36 blue-chip vendors have been invited to participate in this interactive buyer's guide!).

The front page of the Vendor Selector is available to all MarketingProfs members. In addition, annual Premium and Premium Plus members can take advantage of three interactive features:

• Shopper's Handbook: View a 50-page downloadable PDF report prepared by two subject-matter experts about how to choose an email service provider.


• Filters: Select up to 10 filters and view a vendor list tailored to your requirements.


• Product Listings: Select any number of vendors and press the "Compare" button. You'll see the vendors' answers to 150 questions; you can download or print to view them in a side-by-side Excel comparison table.

This email guide is a dynamic thing--built as a technology tool rather than a static report. You aren't getting a two-inch binder of reading material but a flexible, adaptable tool that is constantly being improved and upgraded to suit the changing needs of the MarketingProfs audience.

The email vendors represented are truly the best of the bunch. Vendors participated for free and dedicated some serious time and attention to answering questions about their email applications.

To get access to all the features in this Vendor Selector you will need to sign up for a Premium Membership. I can definitely recommend becoming a Premium Plus member, I've been one for almost 6 months now and the information you have access to is absolutely amazing!

Access the Email Marketing Service Providers Vendor List here.

UK Email Marketing Buyer's Guide 2005

E-consultancy created a 119-page Email Marketing Buyer's Guide which, they claim, is perfect for B2B and B2C companies that send out (or that want to send out) regular emails. It includes 14 vendor profiles from suppliers that E-consultancy believes are among the best in the UK.

The report features a SWOT analysis for the sector, market research and growth forecasts, trends and issues and tips on best practice email marketing. A vendor matrix is also included, so you can quickly identify companies that offer the services you need.

The email services checklist uses the following criteria: Full Service, ASP, Off-the-shelf software solution, Strategy and Campaign Planning, Design and Copy, List Provision, Data Management, Data cleansing, Dedupe and Validation, Broadcast, Data Capture Services, Tracking, Reporting, Data Analysis, Event-triggered messaging, Sequence Messaging, Dynamic Content Solutions, Personalisation, Flash, Video and Audio.

It costs 79 GBP or is free to subscribers. A 16-page sample is available for non-subscribers. 

Read more here: Email Marketing Buyer's Guide 2005

Choosing The Right Email Service Provider For Your Campaigns

In this week's issue of MediaPost's Email Insider, David Baker (vice president of e-mail marketing and analytical solutions at Agency.com) speaks about selecting email vendors and offers a few insights on how to protect your company:

• Negotiate termination clauses. If service levels and escalation procedures are not managed at an acceptable level, you should be allowed to break the contract or refuse payment.
• Negotiate a loaded CPM. Have your e-mail service provider combine all license fees, monthly service fees, training fees, set-up fees, and delivery fees into one loaded CPM based on your acceptable minimum volume.
• Always select two providers. Never commit to one. You may not have the budget to do this, but it is a good idea to keep a back-up provider in case you need to make a change.
• Get a detailed description of what your providers' services include. For example, see if they include account management, professional services, or deliverability services.
• Confirm there are NO additional, hidden fees. You'll want to watch for fees like deliverability monitoring services per campaign or additional fees for surveying capabilities.
• Use a local service provider if your program mandates a higher level of service. Nothing compares to the value of face-to-face interaction.
• Look for value-added elements. Your provider could offer educational opportunities or knowledge sharing; or they might be active in publishing industry best practices.
• Find a provider that is flexible. If you are a $1 million account, you will get all the dedicated service you need. But if your annual budget ranges between $20,000 and $30,000, you want to find a company that will still provide quality service that meets your expectations.
• Be careful who you have running your RFP/RFI process. Make sure you have someone with real, inside knowledge of the e-mail service provider industry evaluate your short-list to guarantee you'll get the service you need. You may need to hire someone to do this, but it's worth it.
• Always create a back-up of your data, campaign reporting, and any segmentation or data setups.
• Do not commit to more than 12 months with your provider. (Unless you have stock in that company.)
• Hold quarterly reviews of your e-mail service providers. This will ensure that you are getting the most from them.
• Build 20 percent of your e-mail budget into an emergency fund. If you find that you need to make a change in providers, there will be costs, and having 20 of your budget set aside will help. If you haven't changed providers at the end of the year, you'll have this budget to do cool, creative things with your e-mail campaigns.