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Hey, They’re Not Apples! Pricing for an Email Service Provider Comparison

Doing an email service provider comparison? Although you’ll have a lot of factors to consider, price will likely be foremost on your mind. So let’s take a minute to talk about price and how to factor it in when comparing ESPs. Because you won’t be comparing apples to apples here. It’ll be more like comparing apples to oranges to kiwi to pomegranates.

Why price isn’t the deciding factor

Many ESPs have a cost based on your send volume, usually referred to as the CPM. Although the CPM (cost per mille—mille meaning “thousand” in Latin) is such an easy tangible to wrap your head around, beware the temptation to focus too much—or even solely—on this price. Email service providers might all charge something different (or the same) for each send, but you don’t want to focus on CPM. You want to look at everything because of the 80/20 rule.

The 80/20 rules says most ESPs are about 80% the same, meaning they can all do the basic functions like send emails and serve up reports. But that’s not where your email service provider comparison is going to happen. It’s going to happen in the 20%, meaning in the special features offered by each ESP. Make sure you know what the 20% is going to cost you, since it’s probably the 20% that drew you to that ESP in the first place.

Also, if you’re tempted to base your email service provider comparison on price alone, you could very well set yourself up for a limited email program. If you want to take advantage of special features to increase your ROI–features like segmentation or triggered email–you might have to spend more to make more. For that reason, I suggest you take a holistic view of each ESP, and always, always keep your long-term goals and ROI in mind.

Also remember that you do get what you pay for. If you’re looking for a top-tier ESP that can handle enterprise email marketing, you’ll get the benefit of their powerful platform, but you’ll also pay more.

How to compare ESP pricing

You’ll have to do more than look at the numbers they give you if you really want to know what an ESP will cost. You’ll have to ask a lot of questions too.

For starters, ask the ESP about details like license costs, usage rates, and overage costs, which can really surprise you if you’re unaware. For example, we know of one email service provider that charges a 125% premium if you exceed your contracted volume!

Make a list of all of the features and services you used with your old ESP that you will continue to want to have, plus add any new features you’re looking for to that list. Then ask about all of those, as well as:

  • Setup fees
  • Costs association with migration from old ESP to new
  • Training at the beginning
  • Training after an upgrade and/or on new features
  • Support
  • Segmentation
  • Which features have additional costs
  • Dynamic content
  • Dedicated IP addresses
  • API deployment
  • Surveys
  • Transactional messaging
  • Data storage
  • Hosted content and landing pages
  • Other

I also recommend you ask the ESPs and some of their current customers:

  • What are some kinds of ongoing fees you charge other customers?
  • And what kinds of sporadic billings do your customers get from you?

Keep the future in mind

Keep in mind potential growth at your company too. If your send volume is projected to increase by 25% due to a concentrated marketing strategy aimed at getting more subscribers, what will that do to your ESP cost? Flexible pricing and payment terms that match your requirements based on your sending patterns and budget constraints could be a big help in enabling you to slowly grow your email program. Flexible contract terms also allow you to try new tactics without long-term expense commitments. Ask if the ESP offers flexible billing terms, such as allowing you to ramp up over time as your usage increases, or being able to turn on (and pay for) sophisticated functionality only during the times when it makes sense for your particular roadmap.

Turn to others for help

If reading fine print is not your strong suit, ask for contracts from your short list of ESPs and have those contracts reviewed by your legal department. They’re experts at reading fine print, and they might discover some hidden costs you hadn’t considered.

You can also contact past and current customers of each ESP to ask about their experiences with pricing and any surprises that popped up for them.

But whatever you do, remember that you’re not comparing apples to apples here, and a simple CPM comparison won’t cut it when it comes to ESPs. Dig a little deeper and find out your real costs before you commit.

Marco Marini
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