Welcome | View My Profile | Sign Out
MediaPost Home About MediaPost Privacy/Terms Media Kit Sitemap
Publications Home News
Online Media Daily Media Daily News Marketing Daily Mobile Marketing Daily Search Marketing Daily
Daily Feed> Email Daily Feed> Video Daily Feed> Social
Online Blogs
Online Spin Email Insider Search Insider Behavioral Insider Online Publishing Insider Mobile Insider Video Insider Gaming Insider Performance Insider Metrics Insider Social Media Insider Just An Online Minute Daily Online Examiner Raw Blog
Media Blogs
Research Brief Diane Mermigas:On Media TV Watch TV Board Magazine Rack Media Creativity Notes From the Digital Frontier Digital Outsider Mad Blog Red White and Blog
Marketing Blogs
Engage:Hispanics Engage:Kids 6-11 Engage:Moms Engage:Boomers Engage:Gen Y Engage:Teens Marketing:Green Marketing:Sports
Magazines
OMMA Magazine Media Magazine
Subscribe
Feedback Loop RSS Feeds Archives Subscribe
Feb 24 OMMA Metrics Measurement (NYC) Feb 25 OMMA Behavioral (NYC) Mar 17 OMMA Global (San Francisco) Apr 14 Search Insider Summit (FL) Apr 18 Email Insider Summit (FL) Apr 27 Outfront Conference (NYC) May 12 OMMA Mobile (NYC) May 13 Digital Out-of-Home Awards (NYC) Jun 15 OMMA Video Jun 16 OMMA Publish (NYC) Jun 17 OMMA Social (NYC)
Recently Concluded Events
Jan 26 OMMA Social (San Francisco) Jan 25 OMMA Performance (SF) Jan 12 MEDIA Agency of the Year 2009 (NYC) Jan 11 OMMA Agency of the Year 2009 (NYC) Dec 6 Email Insider Summit (Utah) Dec 2 Search Insider Summit (Utah) Nov 3 OMMA Adnets (NYC) Oct 30 OMMA Video (LA) Oct 29 OMMA Mobile (LA) Oct 29 OMMA Mobile & Video (LA)
All MediaPost/OMMA Events Event Blogging Past Event Videos
Industry Events Calendar
2010 Digital Out-of-Home Awards
2010 MEDIA Agency of the Year 2009 2010 OMMA Agency of the Year 2009 2009 Creative Media Awards 2009 OMMA Awards 2009 Digital Out-of-Home Awards 2009 Media Agency of the Year
All Awards
Employment Situations Wanted Services Offered Post a Job
Briefs Reports Online
MediaPost Directories
Mobile Insiders Group
People Finder Edit My Profile View My Profile My Contacts My Calendar
HOME • MANAGE SUBSCRIPTIONS • MEDIA KIT
How to Squeeze More Value From Your ESP In Tough Economic Times
by Elie Ashery, Wednesday, March 11, 2009, 10:31 AM

SHARE

TOOLS

RELATED ARTICLES
TAGS:  Email

MOST READ

In case you haven't kept up with the email marketing industry over the past few months, it has been star of glimmering hope for marketers enduring economic turmoil. In fact, the industry has been faring so well that many email service providers (ESPs) have announced record growth for 2008 and expect to do equally as well in 2009.  

Even though demand for ESP services is high and clients are spending more, there is still a lot of competition. Now is the time to try to squeeze more value from your ESP, while many are fat and happy.

But before you start calling your ESP to demand a rate decrease, there are some things you should know to help you get the best deal. To start with, if you're a casual email sender or use an entry-level email service provider that services small businesses, you're out of luck. Their pricing is set in stone since they rely on a massive number of customers to be profitable. However, if you send a lot of volume and use an advanced email service provider, you might find them not only a bit more flexible on price, but also more accommodating in offering additional features and services.

Get your best price. Whether your contract is up for renewal or you're shopping for a new ESP, now is the best time to get the best price. ESPs are walking a tightrope between protecting their current client base and taking advantage of growth opportunities, so they will be more flexible with their pricing terms, especially with existing clients. I have seen some ESPs reduce their fees by up to 50% to keep an existing client from changing to a competitor. However, many ESP fees were bloated to begin with so in the extreme 50% reduction case, the customer is now paying market price.

Just as you would negotiate with any other vendor, you need to be armed with a competitor's quote when you start pricing negotiations with your ESP. In order for your quote to even be considered in negotiations, it needs to be from an ESP in a competing class. By competing class I mean ESPs with similar feature sets, client sizes and services offered. Don't expect your ESP to budge on price if you present a low-ball offer from a competing ESP lacking two of the three of the above criteria. Once you finagle a competing quote, expect your ESP to beat that price by at least 5% -- sometimes 10%. For big volume senders, this can be a huge cost savings.

Get a unique IP address and custom DNS for FREE. All good email marketers know that a unique IP address coupled with a custom DNS is one of the marquee standards for exceptional deliverability, so much so that it is a requirement for most white listing and sender-certified programs. For this fact alone, many ESPs charge very hefty IP address rental and DNS configuration fees, even though the IP address costs them $1 a month from their ISP. This cash cow ESP service needs to be deflated in these tough economic times. There's no reason why your ESP shouldn't GIVE you a unique IP address at no extra charge -- especially if you're a high volume sender.

Get access to your ESP's API for FREE. Another ESP cash cow is charging access to use its application programming interface (API). This tax amounts to crimes on par outlined in the RICO Act and should be considered legal extortion. It costs your ESP next to nothing to offer Web services and it's something they can easily give you access to at no charge. If your ESP starts whining that your access consumes resources and there is a true cost associated with access, just kindly remind them that there are a number of other ESPs that don't charge for the same service and that they made up for the costs in three months of charging access to it. If your ESP's whining turns into cries, just string the sales guy or account exec along for a couple of weeks. They will come around and you'll get a better deal. Don't worry! Your sales guy will still eat.

Get personalized training thrown into your deal. Most email marketers want to start sending with their new ESP before the ink dries on their agreement, but are at a loss on where to begin. Instead of providing personal training sessions, many ESPs give clients half-baked instructional vcasts and webinars, expecting their clients to retain the details of complex features. In my opinion, there's no reason why an account exec can't spend a couple of hours with new or existing clients to make sure they understand the complexities of feature sets and application logic. Given this low cost to the ESP and high return to the client, I am confident that if you demand the extra attention you will receive it. If you're prepared to spend thousands of dollars with an ESP, you should get some personalized handholding and love.

Unless you're in healthcare, the federal government, or email services, the effects of an economic pinch by now have turned into a nasty bite with relief only to be had in cost savings. Bloated ESP licensing and ancillary access fees will soon give way to market conditions enabling email marketers to take advantage of cost savings and increased ROI from the email medium. The best deals are out there. All you have to do is throw a little fit.

5 comments on "How to Squeeze More Value From Your ESP In Tough Economic Times "

  1. Frances Dugan from Paramore|Redd
    commented on: March 11, 2009 at 3:14 PM
    ouch! your post made me realize that our ESP is guilty of a couple of these cash cow service fees. thanks for the info Elie! it should help when it comes time to renew our contract (or go with a competitor)

  2. bryan Puccinelli from message systems
    commented on: March 11, 2009 at 1:22 PM
    try j2 global

  3. Alex Waddell from Blue Sky Factory
    commented on: March 11, 2009 at 11:49 AM
    While all ESP's should offer their client the option of having a dedicated IP, a dedicated IP is NOT beneficial to all clients and can be a serious disadvantage to those who don't have the volume/frequency to maintain the IP's integrity. When it comes to IPs, if you don't use it, you lose it. By sharing a closely monitored IP with other closely monitored senders, you can maintain high deliverability. If you are only sharing this IP with other low volume senders, and if campaigns and IP rating are closely monitored, there is no risk of suffering from another senders bad behavior. "Dedicated IP" is NOT synonymous with better deliverability. Check to make sure your ESP is providing you with an IP set-up that is best tailored to your sending behavior, and don't be sold on the hype around "Dedicated IP."

  4. Lana McGilvray from Datran Media
    commented on: March 11, 2009 at 11:08 AM
    In full disclosure, I have worked with clients and partners at adigital marketing technology company that offers email marketing and monetization services as part of the mix for the past seven years.

    This article reflects the right spirit to help marketers maximize the value of their investments in a tough economy but negotiating contracts is only one part of the recipe for success. In terms of pricing, I would add: 1) Not all ESPs have the same price model. One ESP for instance, is advertising "No CPMs" as they differentiate themselves from others and tout a license model which isn't something that all ESPs can support. In our case, we offer variable pricing as we understand that the needs of our clients are different and monetization of email is AS important as retention campaigns in comprehensive email strategy.

    Beyond pricing, if you are really seeking innovative ways to leverage the full potential of any ESP, I would also suggest reading the recent Forrester Report "Five Ways to Perk Up Your Email Program in 2009", authored by Julie Katz. The independent report highlights extremely important points about relevance versus volume and cross-channel integration. FYI, we are referenced in the report - but again - are one of several in the space. If you access the document, my guess is you'll walk away with a lot of food for thought and some that is already available on your current plate and won't cost you a dime. Good luck!

  5. Joyce Berlin from REACH MEdia
    commented on: March 11, 2009 at 10:55 AM
    Thank you for this insight as I am negotiating right now with some ESP's. If anyone on here can recommend companies that they use and trust, I would be most appreciative. I'd like one company that offers email, voice and sms. thx.

Leave a Comment

You must be signed in to comment. Sign In

Do you have strong opinions and inside knowledge about the topic of this article -- and do you want to share your insights, observations and points of view regularly with the readers of MediaPost? To be considered as a MediaPost contributing writer, please send pertinent info about your credentials, plus several column ideas and one example of your writing on the topic, to pfine@mediapost.com. Please see our editorial guidelines here first.

ELIE ASHERY


AUTHORS

ARCHIVES

RECENT VIDEOS
Recent Email Insider Articles
Three Keys To Creating Actionable Insights   
Three numbers: 90; 10; 0. 90 is the percent of total time spent on an email...
Facebook: Friend Or Potential Freak-Out?    
I have come to terms with the fact that not everyone's intentions are as honest as...
It's Not ALL About ROI   
54% of marketers plan to increase email budgets in 2010. Another 43% plan to keep their...
The Most Oopsy-Prone Elements Of Email Marketing   
As an industry, we can learn a lot from the mistakes of our peers. That's the...
Fishy Business   
My encounter with the Maine Department of Inland Fisheries and Wildlife has troubling repercussions for the...
Your Newest Challenge: Mastering The Small Screen   
Thank you, Steve Jobs, for giving me the perfect news peg for my Email Insider column...
Email Campaigns Bloom With Social Media   
Pepsi recently became one of the first companies to pull its Super Bowl ad spend and...
How Did I Get Here? Let's Talk Landing Pages   
Whether you send your subscriber to a customized landing page, a search result page or a...
Hierarchy Of Optimization   
As Abraham Lincoln said, "I walk slowly, but I don't walk backwards." We've made amazing strides...
The Email Humanitarian Effort   
What happened in Haiti is devastating on so many levels, and you can't venture far from...
>> Email Insider Archives 
ABOUT MEDIAPOST • MASTHEAD • MEDIA KIT • RSS FEEDS • PRIVACY/TERMS & CONDITIONS
©2010 MediaPost Communications. All rights reserved.
1140 Broadway, 4th Floor, New York, NY 10001
tel. 212-204-2000, fax 212-204-2038, feedback@mediapost.com