Why ‘No Commitment’ ESPs Are the Future of Email Marketing
Email marketing is like rock ‘n’ roll: you have to listen to the kids because they have their finger on the pulse. In my experience, too many vendors are so busy courting big enterprise clients that they're missing opportunities with the future Jimi Hendrix or Jack White.
There's a startup boom right now and many of these companies have limited email knowledge, resources, databases and time. So why do all the major enterprise email service providers (ESPs) continue to require huge up-front fees, minimums, long negotiations and onboarding time? They're essentially building barriers for high growth new businesses.
Additionally, they incentivize their sales team in the short term so when these companies grow to significant volumes, the salesperson is no longer getting compensated. Many of these new companies are data-driven, with the infrastructure to develop sophisticated email programs. When these companies succeed, not only is it good for their enabling vendor, but also email marketing in general. Vendors who aren't actively seeking to work with these companies miss out on huge opportunities and ultimately become irrelevant, like disco.
Back in "the day," record companies used to spend money, resources and time to nurture their artists. Some artists would have four or five records bomb before a big hit. I'm not saying that ESPs should front and support these companies out of their pocket necessarily, but make it easy for them to use your product, and maybe they'll stick around when they "go platinum."
Why the most fascinating companies aren't using your services:
- Long-term contracts: Young companies are hesitant to sign long-term contracts and lock into rates based on current volumes. These companies often don't know what they're going to look like in six months, let alone a year. They require flexibility in partners, and your ability to give that to them shouldn't be based in your need to want to predict your future as well.
- Limited support for and horror stories of being the "little fish in a big pond": If it's true because it's happened in the past, then you need to prove otherwise by showing some love to your smaller clients. This means demonstrating you want smaller clients through flexibility, service and plans that work for them.
- High CPM for low volume: It's no secret that the actual cost of sending email isn't based on actual emails sent out the door (or maybe it is, whoops). The cost comes from account management. Some ESPs have figured out how to keep costs down for low-volume senders through a self-service model or by partnering with agencies or consultants.
- High cost of add-on features: Sometimes vendors try to manage high costs for smaller companies by taking the a' la carte approach. Sometimes it makes sense, especially when the ESP also offers mobile or social tools. But it can be frustrating when the only way a customer will have a good experience with the ESP is with a full suite of tools. Reporting, usability and access to technology tools, which will enable a startup company with limited human resources to grow into a sophisticated email marketer, should be included with ESP services.
- Monthly minimums: Monthly minimums only solidify the notion that you only care about large clients and that you aren't willing to nurture a relationship from the startup phase. "Small Tier" ESPs aren't what they used to be. They're growing into solutions that can handle enterprise volumes and their customers are going to stay where they are instead of moving to your company.
There are ESPs that are willing to create an environment conducive to the needs of startup companies. They have some shortcomings, but are becoming more sophisticated as they work with technology startups and enhance their offerings to accommodate these companies. When they're able to prove themselves in deliverability and security, they'll surpass the old guys and take over the world, like the "kids" always do!
Liz Ryan is the founder and president of Relish Tray Media, an email-focused marketing agency that works with tech startups and midsized businesses.