Email Marketing Services Buyer's Guide

Email marketing services introduction

Email is a powerful medium in the marketing arena. With the click of a button, you can instantly reach hundreds of thousands of people anywhere in the world with your newsletter or special offer. An email marketing campaign offers an affordable way to gain new customers, build repeat business, and enhance your company's brand.

Unlike other campaigns, email marketing reaches customers almost immediately and gets responses usually within a few days. It also lets you tailor your message to specific demographics. And best of all, email marketing provides full tracking data for you to gauge the campaign's success.

Reputable email marketing services can help you achieve your marketing goals while avoiding potential pitfalls. They ensure that your message goes out promptly, reaches the intended recipients, and offers customized solutions such as email templates and list segmentation tools to help you build an effective campaign. Email service companies help you to manage your email campaigns responsibly so that your company does not get "blacklisted". They also go to great lengths to make sure your mailings adhere to the CAN-SPAM Act — which is critical to avoiding potentially stiff fines, or worse.

All email marketing providers allow you to market to your own customer base or list of opt-in email recipients. While most email marketing vendors can't provide you with an opt-in email list to rent, they can help you compile your own permission-based list in-house. If you want to rent an email list, you can obtain one from a mailing list broker who will typically manage the sending of the campaign directly with the list owner. (Read more about Mailing List Brokers)

This BuyerZone.com Email Marketing Services Buyer's Guide will detail the pros and cons of email marketing, options for sending email, types of services offered, pricing for email marketing services, and ways to choose a vendor.

<< Back to top

Pros & cons of an email campaigns

Before embarking on an email campaign, you need to weigh the various advantages and disadvantages to determine if email is right for you.

The pros
Speed and affordability are the two main selling points for an email campaign. Your message is delivered to customers in seconds, with options to instantly reply to your offer. You also don't have any of the costs associated with physical mail such as addressing or postage — although that could soon change (see the section on Email marketing services pricing).

Email campaigns, more so than any other marketing channel, allow you to understand the behavior of your target audience beyond whether or not they placed orders. You can get real-time reports detailing every aspect of your email campaign: from the number of successfully delivered emails to sales made. This information helps you learn if your email campaign was successful, how to uncover areas for improvement, and how to lay the groundwork for future mailings.

Targeting is another advantage: you're not locked into sending the same message to everyone on an email list. You can cost-effectively customize your message based on customer demographics or interests and send one offer to part of the list and another offer to others.

With email campaigns, you can send greater quantities of email for much less money than direct mail. However, in a medium that has to contend with email filters, spam blockers, virus concerns, and low response rates, email marketing can require a large sample size of 100,000 or more emails to get a meaningful response.

The cons
The number one issue with an email campaign is that your email may never reach its intended recipient. Having your email lumped with true spam — bulk emails sent without permission — is the biggest roadblock for email marketers. Even if a customer agrees to receive mailings from you, spam-filtering programs might flag your message as spam or blacklist your address entirely, just based on the content of the message. Not surprisingly, email campaigns typically have very low response rates of 0.25 to 0.50 percent or less.

You must also comply with the federal CAN-SPAM Act, which can be cumbersome. The act prevents marketers from sending unsolicited messages and sets rules for email marketing behaviors. For example, you must include unsubscribe or opt-out links and a physical mailing address in every message. When someone requests removal from a list, you must comply quickly — usually within 10 days. You also need to stay on top of constantly changing state laws.

Finally, while emails are relatively easy to send and the results are almost instantaneous, those two elements aren't always positive. If you rely too heavily on email, it can be a detriment to your business: some people consider it impersonal and unfriendly. Also, if you're too quick to send your message out and overlook a mistake, it's impossible to get the email back.

<< Back to top

Mass email delivery options

Mass email vendors typically fit into one of three common service offerings — ASPs, software providers, or full service firms. Each option has its advantages and disadvantages — it's important to choose the type of provider that best suits your needs and budget.

ASPs
Application service providers (ASPs) offer mass email services through a subscription model. They host the email software on their servers and send your messages using their bandwidth and infrastructure. You pay monthly fees based on the number of email addresses on your list or the total number of emails you send. ASPs are primarily self-service solutions, allowing you to log in, upload your names, and load your content into templates. The vendor's system manages the names and addresses and sends out the mass emails.

The ASP model is best for small businesses because it's easy to get started and inexpensive. Vendors provide customer service by phone or email to work out any problems. You also benefit from working with vendors with a lot of mass email experience.

As with any ASP, you're dependent on the vendor's uptime and ability to deliver. If their server goes down, you may not be able to get emails out. Also, some ASPs may only offer limited list segmentation capabilities. Most importantly, if the vendor's domain has been blacklisted by ISPs in the past, your emails may never reach part of your list. Be sure to ask any ASP vendor you are considering how they prevent their network from becoming blacklisted.

Software providers
Purchasing a software solution for mass email requires that your in-house staff install the software on your own servers, manage the software, train employees, and address any problems that come up. You don't have to worry about previous blacklisting complaints, and you get complete control over the setup and maintenance of the system. Also, there are no month-to-month fees so you can amortize the cost of the software over three to five years.

However, in-house software can be an expensive option requiring a large up-front investment for the hardware, necessary bandwidth, licensing fees, and staff to manage the software. It puts heavy demand on your staff's time to maintain a clean reputation and to send mass emails. You also need to establish relationships with major ISPs if you run into delivery problems with your campaigns. Finally, it requires that your company stay on top of changing email laws.

Full-service firms
If you want an agency that will handle your entire mass email campaign from start to finish, a full-service vendor is the way to go. Full-service firms have a lot of experience working with clients in different industries, avoiding blacklist status, and creating valuable content for email promotion. They will also help format emails and perform small test mailings before a full campaign. Full-service firms typically offer the most advanced personalization, segmentation, and targeting capabilities of the three types of providers.

This extra level of service doesn't come cheap — expect to pay several thousands dollars per month. It's probably not an option for many small businesses.

<< Back to top

Email services features

Once you decide which type of provider is best for your situation, there are several primary email services you should investigate.

Tracking
Real-time tracking is one of the most valuable components of email services. It provides a full analysis of everything that happens from the moment an email is sent, allowing you to gauge the success of your campaign and make adjustments and improvements.

Most email tracking programs track similar data including:

• Total emails sent: Total messages the email services vendor sent on your behalf
• Total emails bounced: Emails that were undeliverable due to bad addresses or spam filtering
• Messages successfully delivered: Emails that successfully reached the intended recipients
• Open rates: How many people opened your email to view the contents
• Click through rates for each link: Statistics of what links the email recipient clicked when reading your messages
• Unsubscribe/opt-out requests: Email recipients that request to be removed from any future mailings
• Subscribe/opt-in requests: People that want to receive information about your offerings because of a referral from a friend or through a link on a web site

Some advanced tracking programs may also track sales conversions and generate exportable reports for an external spreadsheet or database.

List hygiene
Ongoing maintenance of your mailing list is necessary to maximize your campaign effectiveness and to ensure that you are in compliance with the CAN-SPAM Act. Vendors will typically review your list to make sure that email addresses are valid. They also check for bad addresses such as a missing "@" or misspelled ".com", remove duplicate addresses, and honor unsubscribe requests promptly.

Database management
After uploading your lists onto their servers, email services vendors configure the list according to customer email preferences such as preferred email format. They also upload your email content and process and deliver the emails. If emails are bounced or flagged as spam, the better vendors will investigate why it happened and try to fix the problem. Database management also involves capturing recipients' actions in the database, such as clicking on links or opting in/out.

List segmentation
Vendors can arrange your list by interest categories and reported demographic information you supply, allowing you to target specific audiences with audience-specific content. You can also segment your list randomly to measure the effectiveness of different messages and subject lines in a single mailing. This "split test" allows you to send different versions to different audiences to determine which performs best.

List growth
While most email service vendors don't offer mailing list rental services, they typically offer tools to help grow your list. They can set up forms on your web site for people to opt-in to receive newsletters, alerts, or mailings about products and services that interest them. Vendors typically provide an autoresponder that sends follow-up messages to confirm that a person has been successfully subscribed. And many offer viral tools such as "refer a friend" forms that let subscribers tell friends and colleagues about your site or newsletter.

Personalization
Most email services vendors can make your emails more relevant to the recipients. The most basic option will let you personalize your greeting in the message by merging the name of the recipient with the salutation (e.g. "Dear Susan"). The most advanced providers will enable you to include multiple merge fields within a message and to swap in or out different offers, images, or entire paragraphs based on the profile of the message recipient.

Additional services
Some vendors provide other email services such as appending. This involves taking your customers' postal addresses and matching them up with a database of known email addresses. Appending can be an effective way to grow your list, but exercise caution when including customers who haven't already opted in to your emails. You still need to be compliant with the CAN-SPAM Act and you don't want to risk alienating your customers.

Vendors can also help with the writing and design of your emails. If you don't have in-house staff to write copy, create logos, or customize templates, an email services vendor can do it for you for an additional cost.

<< Back to top

Choosing an email advertising vendor

A big challenge that all email advertising vendors face is safely getting your message into customers' inboxes. Look for an experienced vendor that has strong working relationships with multiple ISPs. This means they have a proven track record of complying with the CAN-SPAM Act and avoid controversial email content such as pornography or illegal drugs. If they actively manage their ISP relationships and are careful to only send appropriate content through their network, the vendor can avoid getting blacklisted and help ensure a high deliverability rate.

Most email advertising vendors will provide you with a free trial of their software to make sure it's the right solution for you. Take full advantage of this. Make sure that the product works and is easy to use before committing to anything. If it seems like you or your staff will need help deciphering how the email advertising program works, find out what kind of training they offer.

Understand what your goals are and what assistance you need so the email advertising vendor can match you with the appropriate service. If possible, meet the vendor in person to discuss what they offer and how they can get you the best possible results. Always come prepared with questions such as:

• How long have you been in business?
• Do you offer full services or just basic applications?
• Does your company keep up with changes to the CAN-SPAM Act?
• Can you guarantee that my list will only be used for my campaigns and that it will be stored securely?
• Do you offer email and/or phone support?
• How many emails should I send and how frequently should I send them?
• What do you do to get on the approved mailer lists for popular email services like MSN, AOL, Yahoo, and Google that have powerful spam filters?
• Do you offer software training for my staff?
• Can you provide "whitelisting" advice to get recipients to add me to their address books?
• Can I get a list of references I can contact about your services?

Finally, maintain reasonable expectations for your email advertising campaign. Success rates vary based on the quality of your list and how compelling your offer or content is. Therefore, vendors can't guarantee a certain amount of responses. What vendors will do, however, is offer their email marketing experience to help you develop offers and create effective content. They should be able show you what has worked in the past and what new methods are effective in the email arena.

<< Back to top

Bulk email tips

There are no hard and fast rules for successful bulk email marketing, but there are some basic principles you should follow to maximize your chances for success:

Have list in place. Before you work with a bulk email vendor, you need to acquire a quality list. If you work with a mailing list broker, make sure they only offer opt-in or double-opt in lists — those that include only people who have agreed to allow marketers to contact them. If you compile your list in-house, make sure a vendor can help segment the list to target different demographics and interests.

Test, test, test. Before you begin any wide-scale bulk email campaign, test all links to make sure they go to the appropriate pages on your web site. It's helpful to ask someone not associated with your mailing to review the content. Furthermore, split your campaign to test different subject lines or offers that will allow you to learn and optimize your results with each ensuing campaign.

Who are you again? Clearly displaying your company name can help improve open rates and remind the recipient that they requested your information. Make sure the "From" and "Subject" fields are specific and the name of your business appears in the domain. If possible, include your company name in the subject line along with a compelling "hook" such as, "limited time offer" or "20% off clearance merchandise."

Be direct. Get to the point immediately. People may go through hundreds of emails a day and don't have time to read a lot of text. They need the most important data up front: what the offer is, why do they want it, and how they can get it. Keep secondary information, such as general marketing copy, at the bottom of the email.

Provide options. Always give your bulk email recipients the option of receiving an HTML or text version of the message. If they have a low-speed connection, they will likely want text because it loads quicker.

Sow the seeds. An effective way to check the delivery and appearance of your bulk emails is to seed the list with your personal email or the emails of friends and colleagues.

Keep offers fresh: If you continually send the same old content to your customers, they'll start to opt out in droves. General content — articles, helpful tips, even surveys — can keep subscribers interested if you don't have new offers or promotions to entice them. Just make sure it's relevant to your audience.

Don't try to do too much. Graphics should be small and few in number, since large graphics increase file size and can trigger spam filters. And you should avoid adding video and audio files, as some customers may have trouble viewing them. Also, don't risk annoying customers with too many bulk emails in a given month.

<< Back to top

Direct email marketing pricing

Costs for direct email marketing can vary greatly depending on services you need and how you send emails. The most common type of direct email marketing is the ASP solution. Most ASPs require a monthly subscription — but no annual contract — and include database management, list segmentation, list hygiene, and other basic services. Many will let you try out their services free for one month so you can test their functionality.

There are three main pricing models for a direct email marketing ASP solution.

The first is on a per subscriber basis. This allows you to send an unlimited number of emails to your subscribers. The costs range from as little as $10 per month for a list of 100 names to $600 or more for lists of 100,000 email addresses. You receive volume discounts for the largest lists.

Next, is a rate based on total emails sent. For a fixed monthly cost of $20 to $450, you can send 1,000 to 100,000 emails limited to 20 kilobytes (kb) to 30kb each. You can also send additional emails above 100,000 for $5 to $30 CPM (cost per thousand).

If you maintain a very large list and need to send more than 100,000 emails each month, you can get volume discounts. Pricing for larger lists range from $400 to $8,000 per month and can accommodate tens of millions of emails per month. Pricing for additional emails for the largest lists costs $0.50 to $5 CPM.

If you're not ready to commit to sending a certain number of emails per month, some ASP vendors offer a pay as you go option. This lets you conduct a one-time email campaign and pay for each email sent — about $0.02 to $0.15 per email. If you send more than 100,000 emails, you may pay less than one penny per message. In the long run, you'll save money with a larger volume plan.

Most ASP vendors don't charge set-up fees, but a few direct email marketing vendors require a one-time charge of $100 to $500 to get you started.

ASPs can provide copywriting and design for your direct email marketing campaign for an additional $75 to $150 per hour. Optional appending services may cost a few hundred dollars up front plus a per name charge if successfully matched.

To purchase in-house email software, prepare to pay at least $700 for the actual software, plus several hundred to several thousand dollars more for setup, licensing, product updates, and customer service. You may also need new servers or a faster Internet connection if you plan to send a high volume of email.

Full-service direct email marketing firms handle every aspect of your email campaign and charge fees that start at $2,500 per month. This amount can go significantly higher based on the volume and complexity of your mailings and the level of service that you require. They may also require initial startup fees that vary based on the level of setup and integration work required.

This high-end service is best for businesses who mail at least four times per month to 100,000 names or more. Working with full-service firms is also beneficial if you want increased personalization or expert advice for email strategies, creative development, and campaign analysis.

Postage for email?
Businesses that turn to direct email marketing to avoid paying postage could soon face a new challenge. In early 2006, AOL and Yahoo announced plans to charge an optional online postage fee of $0.0025 to $0.01 per message to guarantee delivery into their subscribers' main inboxes. These companies hope that the fees will deter spammers from sending junk mail.

While both companies will continue to accept messages without requiring this fee, those that pay it can bypass spam filters and have emails sent directly to recipients' inboxes. However, this is not a movement to circumvent the CAN-SPAM Act. Even if you pay this fee, you still must agree to only send messages to customers who opt-in.

Although in its infancy, email postage could become a concern later on and impact your direct email marketing budget.

<< Back to top