How to Evaluate Email Marketing Service Providers

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Many small business owners make decisions based on one question: can I afford to do this?

Despite a very low price tag in general, email marketing is no different. Most small businesses are unaware of the specifics of email marketing, and a proliferation of email marketing service providers complicates the decision making process.

Ultimately, it’s easier to compare what you know and what you can measure: the price. But this process is inherently flawed, as shopping for the lowest price rarely delivers the best value.

So how does a small business choose the right email marketing service provider? To begin to answer this question, it’s important to look at three key aspects that help differentiate most email marketing services. While any service will likely deliver a good ROI (email marketing is so inexpensive that it’s hard not to receive some ROI from your efforts), by evaluating your short list of email marketing service providers on these three areas, you’ll be better able to determine the right service provider for your company.

How to Evaluate Email Marketing Service Providers

These are three important features you need to look at:

  • Tracking capabilities (e.g., can you identify how someone found you?)
  • Don’t look at the price so much as the pricing model.
  • Make sure their customer service fits your needs

Tracking capabilities

You frequently hear how important it is to send targeted messages. What’s not frequently discussed is how to do this. That’s a topic too big for this post, but we can start that conversation now.

A great place to start is by knowing who’s on your list.  While it may be hard to discover their likes and dislikes, or other demographic information, it should be fairly easy to track where the contact found you. This one fact could tell you a lot about your contacts’ likes, and preferences, among other things.

In face-to-face networking events, meetings, or other interpersonal scenarios, this is fairly easy. When you meet someone and receive their business card (and permission to contact them), you can create a group or list just for the event, then put the contacts into that group. Now you can send them messages that revolve around that common experience, a technique that can be very powerful.

It’s a little different for those who find you online. To solve this problem, search for an email marketing service provider that provides unlimited signup screens (for free — some charge for additional signup screens). You can use signup screens to tie-in with specific lists or groups on the back end, thus giving you good data on which pages are converting the most traffics into contacts. This strategy becomes really powerful if you are able to trigger auto-responders based on the signup screen used.

Pricing Structure

I’ll admit this one falls into a subjective category, but it’s a topic on which I have strong feelings. There are three main pricing models for email marketing service providers: database size, pay-as-you-go, and volume of emails sent. For the most part, the difference in price is nominal. If you are simply pinching pennies, then there may be no other solution than the lowest possible price. But, again, if you’re looking for the right fit for your organization, then you should strongly consider what your firm believes in and how your vendor’s pricing model matches up.

Database size

For many, this is the most economical choice, because you can send as many emails as you want without incurring additional fees. Your cost is based only on the size of your database. From my perspective, this is the worst model for small business and here’s why:

  • Small businesses needs to be able to grow their list of contacts without penalty. This model unfairly penalizes list owners for growing a database, even if it isn’t used for email marketing. I think this is backwards of how it should work. Especially in a small business environment where resources are scarce, you should be able to grow your list of contacts as large as you need it to be without penalty. Storing emails and not using them has little intrinsic value.
  • The model is inherently unethical. Secondly, and perhaps more importantly, this model is unethical. Under this model, you can send as many emails as you want, whenever you want. Thus the sender is in a position to essentially spam contacts in the database at no penalty. The small business owner may suffer because of the ill-will that may be generated, but the real victims in this scenario are the recipients. Let’s face it: email marketing doesn’t have a good reputation, and it’s pricing models like this that contribute to this perception.

Pay-as-you-go

A slightly better option is the pay-as-you-go model, which is a little like a cell phone plan. You buy a certain amount of email credits that you can send, and you keep the volume of emails within that set amount. This option is better than the database size model in that the small business owner is not penalized for growing the list size, and there are some controls in place for not sending an unlimited amount of emails.

The biggest problem with this model is again an ethical one. Many of these plans “expire” the email credits bought. When the expiration date is coming up, you have to “use ‘em or lose ‘em,” which can encourage sending unwanted emails.

Volume of emails sent

Perhaps the best model of the three is a volume-based model. Under this model, you are not penalized for growing your list and you only pay when you send emails. In other words, you are only paying when there’s opportunity for ROI, which is a good, and fair, practice (and similar to the pay-as-you-go model).

The biggest upside here is that there are no expiring email credits, and in some plans, if you don’t send any emails, you don’t have to pay anything. So if you only send out a quarterly email newsletter, you are only invoiced four times a year.

Customer service

Perhaps the area that should be scrutinized the most is customer service. Many of the service providers that a small business will consider are based on a “self-service” model, meaning the small business is responsible for all aspects of creating, sending, and measuring campaigns. Because of this, and the lack of experience many small business have with email marketing, the “batch and blast” emails typify the approach most organizations use.

But if you really wanted to incorporate email marketing into your marketing plan as a substantial tool, to build relationships, and boost revenue, you will want to learn how to use the tools properly. During your evaluation period, find out what sort of education programs and staffing the service providers offer to help you through the learning curve.

The last, and most important area to consider is your relationship with the vendor. Because of these low price points, most email service providers are looking to gain customers on a national or global stage. In stark contrast, many small businesses are local and use local resources. Local businesses understand the value of using other local services. Local businesses can usually support your quicker, better, and more efficiently than a global company can, plus you are supporting your local economy, which is no small thing.

So consider a local email marketing service provider as one of your vendors. If you are using a local company, they may have local training capabilities, and may even be able to come to your location to educate you on their system.