• by Ray Schultz , Columnist, June 17, 2019

You may wonder why brands need a guide to switching email service providers. Many seem contented — or stuck — with the ones they have.

For instance, 49% don’t plan to look for a new ESP within the next 12 months, according to the 2019 Red Pill Email Vendor Guide, a study by email tech consultancy Red Pill. Yet 25% will seek a new one within three to six months, 14% within 12 to 18 months and 13 within seven to 12 months. 

Moreover, 76% have previously switched vendors, while only 24% have never switched. 

It’s a pertinent question, given the consolidation in the field and the addition of services that go beyond mere email.

And the poor folks who haven’t switched ESPs can use some help. “Among those who have not gone through the pain of a vendor switch, we tend to see less-evolved RFPs and less understanding of what a switch will take and the potential risks,” the study notes.

Red Pill has relied on answers from participating vendors on the features they offer for 10 years, and it has done so this year. But it added a new element: A survey of 200 email users.

Of that sample, 39% have moved to the consolidated cloud, while 27% use a legacy provide, 16% utilize integrated services and 15% use a new provider and 3% focus on mobile engagement.

What makes companies dump their old ESPs and move to new ones? 

For 41% the issue is declining service levels. In addition, 27% are driven by price — they either want to lower costs or fight increases.

Another 22% change vendors when they move to a new job, and 11% cite bias by a new leadership team. Finally, 8% move on because their ESP was acquired.

Everyone seems to be moving faster.

The old selection process used to take from six months to a year. Over 46% now say the process takes six months, while 25% report that it takes three months, 11% cite nine months or more and only 5% say it takes a year.

Not that they are conducting all necessary due diligence — 54% rely on word of mouth and analysts to find candidates, and only 46% go to trade shows or vendor roadshows. That may be foolish.

Firms with multiple brands and high volume and are “highly programmatic with automations and journeys” may have trouble justifying a move. They need a strong financial case and "firsthand knowledge of vendor possibilities gained from roadshows or trade shows," the study says.

Granted, it’s not easy, with “over 10,000 vendors in the MarTech landscape.”  

Pricing tends to be pretty consistent across suppliers. But those switching should look not only at the CPM, but at the loaded cost: This can include “service fees, third party fees, additional platform licensing or monthly Saas Fees, data fees, deliverability monitoring fees,” Red Pill urges.

Second, it is important to structure contracts that “extend two years or more. If cash flow allows, pre-pay options combined with multi-year contracts can result in a 25%-30% discount,” says Red Pill.