Choosing an Email Marketing Service

In my previous post, Adding an Email List to Your Site, I explained what email service providers do, and why you should use one to manage your mailing list. In this post, I give some suggestions on how to choose one and give pointers to the leading companies.

Choosing an email service provider (ESP) can be a daunting task, given the large number of companies in this market and the subtle variations in the services they offer. Pricing models also vary widely.

It’s essential to start with a plan for what you expect to do. If you are only sending an email newsletter, and not individual emails or an autoresponder series, then any service will work. If you need more advanced features, such as sending birthday cards to members on their birthdays or sending a timed series of messages to people who join your list, then the range narrows.

When you get into the details, there’s a lot of variation among the services, in terms of the templates offered, the quality of the WYSIWYG editor, the analytics, and segmentation and testing support.

Many services have phone support with agents who will take you through the process step-by-step, while some are strictly self-service. The kinds of companies they are focused on serving—small businesses, enterprises, or designers and agencies—also varies.

Pricing Models

There are several pricing models used. Which is best for you depends on how large you expect your list to be and how frequently you expect to mail:

• Flat monthly fee, based on list size. This type of plan is a great deal if you mail frequently, but it can be expensive if you have a large list but mail infrequently. With a list of less than 500 names, you can use MailChimp for free, and most other services for $10 to $20 per month. With more than 10,000 names, expect to pay at least $100 per month.
• Monthly fee based on the total number of emails sent. This structure is best if you mail infrequently, especially if you have a large list. Emma, for example, charges $30/month for up to 1,000 messages, and $350/month for up to 50,000 messages.
• Pay-as-you-go pricing. Typically you buy credits, and then use them up as you send emails. The price drops if you buy more credits at a time. Pricing varies from half a cent to three cents per message. This approach is best if you mail infrequently.
• Per message plus per recipient. Campaign Monitor charges $5 per email, plus 1 cent per recipient. This makes it much more expensive than other services if you have less than a few hundred recipients per message.

Because of the variations in the pricing models, to evaluate providers it is important that you estimate not only the size of your list, but how frequently you expect to mail to it.

Low-Cost Email Marketing Services

There may be no free lunch, but depending on your needs, you may be able to get an email marketing service for free. We’ve listed services with free options first.

• MailChimp is the hipster of the group, with a whimsical interface. It provides its service for free if your list has 500 or fewer names and you send not more than 3,000 emails per month. Paid plans start at $15/month for up to 1,000 members, with an unlimited number of emails sent. There’s also a pay-as-you-go plan that starts at 3 cents per email in low volume and drops to 0.5 cents per email at high volume. MailChimp supports autoresponder series and date triggers, but no phone support is available.
• Vertical Response offers its service for free to 501©(3) non-profit organizations, for up to 10,000 emails per month. For the rest of us, they offer pay-as-you-go plans that start at 1.5 cents per email and drop to 0.75 cents per email in volume, and monthly plans that start at $10/month for unlimited mailings to a list of up to 500 names. Vertical Response is focused on small business and has a simple feature set limited to mass emails.
• Constant Contact is the largest of the ESPs aimed at small business. Pricing is all monthly, starting at $15/month for lists of up to 500 names. For an additional fee, they also offer surveys and event marketing.
• AWeber was one of the first companies to offer the autoresponder series feature, and that’s what it’s best know for, but it also supports email newsletters. Monthly fees start at $19 for up to lists of up to 500 names.
• MadMimi is a relative newcomer that is one of the few to support transactional emails. Pricing is $8 for up to 500 names and $36 for up to 10,000.
• iContact offers monthly plans starting at $9.95 for up to 250 names.

This is far from a complete list, but it does include the most popular services. Some others to check out include MyNewsletterBuilder, eConnect email, JangoMail, Campaigner, Benchmark Email, and Streamsend. And there’s probably 100 more.

Full-Service Email Newsletters

One company that takes a different approach is Emma. Unlike the services listed above, which offer an assortment of standard templates and leave you on your own to customize them, the Emma team builds a custom template for you to help your emails look as good as possible with a minimum of hassle. This requires a start-up fee of $99 to $399, depending on the level of customization and number of options. Monthly fees start at $30/month for up to 1,000 emails. This service is more expensive than the ones listed above, but you get more help.

An indication of Emma’s personalized approach is that you can’t sign up online; you can only request a phone call. They want to talk to every prospective customer. Among other things, this helps them screen out spammers and protect their sender reputation.

Services for Designers

The companies listed above are focused on servicing small and midsize businesses directly. To be sure, they’re also used by lots of designers on behalf of their clients. But there are a few companies that are focused on designers as their customers. They offer private-label or agency packages that allow the designer to set up email marketing campaigns for their clients, so either the clients can manage their own campaigns once the designer has set them up, or they can have the designer manage them. (In contrast, most of the companies listed above provide only a single log-in per account.)

• Campaign Monitor is popular with many designers. It has a private-label option and is oriented toward serving designers, but its cost-effectiveness is limited to bulk emails to a few hundred people or more because of the $5 per message fee. Update:Campaign Monitor has just added autoresponders and date-based triggers, making the service much more compelling.
• CakeMail is a private-label-only solution, offered exclusively through partners (which are typically design shops and ad agencies). Its simple feature set is due for a major expansion with a new version in August. A very attractive feature is that there is no per-client fee; you can have as many sub-accounts as you want, and you pay only based on the total email volume across all sub-accounts.
• iContact, Streamsend, Emma, and Vertical Response all offer an agency or reseller version of their service.

The Big Boys

If you have a list of tens of thousands of names, and a budget of a few hundred dollars a month (and up), there’s another class of provider that offers more sophisticated services and support. These companies are typically used by midsize companies up to large enterprises.

You can tell that these companies are in a different class because you won’t find any pricing information on their web sites, nor can you sign up online; this is direct sales engagement, typically with a 6-month or longer commitment.

Companies in this category include:

• Bronto
• Exact Target
• Silverpop
• Lyris
• Experian CheetahMail

These services provide more support and richer features, especially when it comes to testing and analytics. If you’ve got a really big list, check them out.

CRM Systems with Email Marketing

Email marketing systems aren’t designed for CRM (customer relationship management). You can use them for that function to a limited degree, but they quickly become messy if pushed too far in that direction.

At Webvanta, we’ve recently switched to Infusionsoft, a system that combines CRM and email marketing. Rather than having lists at the center, and the assumption of modest amounts of information about each list member that is rarely updated, Infusionsoft puts the customer or prospect record at the center. Starting at $199/month for up to 10,000 records, it’s more expensive than typical email service providers, but it does a lot more. For $299/month, you can have up to 50,000 records, making it no more expensive than much simpler systems if you have a large list.

For example, rather than a person being a member of a list, which is the model in email marketing systems, a person is simply a customer or prospect who may be sent different emails at different times. You can set up follow-up sequences, which can be a series of emails, tasks (such as assigning a follow-up phone call), and even physical mailings and faxes. You can assign actions to a link in an email, so if a prospect clicks a link it can move them from one email series to another. And the system supports e-commerce transactions, handling the payment and recording all the information in the customer record.

Many companies use Salesforce.com to manage their sales efforts, and Salesforce includes email marketing capability. Starting at $65/user/month for plans that include email marketing, its focus is on sales management, making it a different beast than email marketing systems, but it does do email marketing too.

Continuing to move up-scale, marketing automation systems, such as those from Marketo and Eloqua, generally cost well above $1,000/month and add sophisticated lead nurturing and lead scoring capabilities.

Getting Started

If you’re just getting started with email marketing, and your needs are simple, you can begin with any of the companies listed earlier in this article. It’s hard to make an informed evaluation until you’ve gained some experience with at least one system.

All of the systems provide import and export capabilities, so you can begin building your list with one system and then move to another. We’ve been through four of them during Webvanta’s evolution.