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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!

Need help optimizing your email marketing results? Get in touch!
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