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Episode 015: Choosing an Email Service Provider Episode Summary: Email marketing is typically one of the best returns on investment for most ecommerce websites. In this episode, Julie talks through the factors you need to consider when choosing an email service provider including your goals and budget as well as your functionality and level of service needs. Episode Links: https://mailchimp.com/ https://www.constantcontact.com/ https://www.klaviyo.com/ https://www.activecampaign.com/ https://savvybusinessmethod.com/ https://www.youtube.com/channel/UCAHt2LynOZylOjlIz878okg https://fb.me/savvybusinessmethod Episode Transcript: Announcer: Are you looking to take your online business to the next level? Well, you're in the right place. Welcome to The Savvy Business Method, with your host, Julie Feickert. Julie Feickert: Hello, and welcome to episode 15 of The Savvy Business Method podcast, where we talk about how to plan, start, and grow your small business online. I'm Julie Feickert, and my goal is to help you build practical business skills so you can provide a better life for your family. Today we're going to talk about email marketing, and we've done a few episodes talking about email. And one of the reasons I like to talk about email is because email marketing tends to have a higher rate of return for small business owners with websites, ecommerce websites, than a lot of other types of marketing. And so this is something that I feel really strongly that ecommerce website owners need to have in place and need to do well so that they can get the best rate of return on their investment and grow their business. So today I want to walk you through choosing an email service provider. Now, before we get into the factors you need to consider, I want to clarify that an email service provider is the service you're using to send out both your automated and manual email marketing campaigns to your mailing list, so like your sales emails and your abandoned cart emails. This is different from who hosts your business e-mailbox. So I have an email address through my website, SavvyBusinessMethod.com. That email address is hosted and managed by a different service than what I use to send out the emails for Savvy Business Method. So hopefully that makes sense. That's just a point of confusion occasionally, and I want to make sure we clear that up in advance. All right, well, there are a number of good options out there for an email service provider, or an ESP. I'll probably use ESP throughout this so I don't have to keep saying email service provider. Now, a couple of them you've probably heard of. If you've been around ecommerce at all for a while, companies like MailChimp, Constant Contact, and Klaviyo are really popular with small website owners. And so we're going to be talking about companies like that today. And really the company that you choose or the company that's the best fit for your business is going to be dependent on a number of factors, including how large your email list is, your budget, and the features and the level of service that you specifically need. So let's walk through each of these and really dig into how you can figure out which service will best meet the needs of your specific business. All right, first off, I would recommend that you think about the goals that you have for your email marketing. Now, are you looking, for example, to just send out periodic emails to your email list, to maybe announce a sale or a new product or just remind them your business exists? Or are you looking maybe to do more triggered marketing? These are the automated campaigns, things like a shopping cart abandonment campaign, when somebody abandons their shopping cart, or a welcome series that starts sending out emails to them as soon as they sign up for your email list, or a post-purchase series that follows up with them after that sale, to support that sale, maybe get a product review, and also try to get them to make that second, third, fourth sale, et cetera. So those are some different types of campaigns that you could be considering running. Now, those are typical ecommerce campaigns. But if you are selling an item that requires a great deal of education or thought by the consumer, they really have to consider this purchase, or maybe it's a very high dollar value item, you may also need to run a sales funnel. So that's sort of a different type of campaign, right, where you're catching them at various points in the sales process and kind of funneling them through to the sales process. And so knowing your goals in advance can really help you understand the level of functionality that you're going to need from an email service provider. All right, on top of the type of email marketing specifically you're looking to do, you do need to also give some thought to what are your goals for growing your email list? Is your email list growing very quickly? Is it likely to get very large? Do you need specific tools built into your email service provider to help you grow that list and capture email addresses? Or are you using a separate system or something like that? Email is either a small part of your marketing for some businesses, or it's a very big part of it. And knowing that in advance can be really useful before you go out and try to choose a company. All right, next up, you need to know the types of features that are available in each system that you look at, okay? So let's talk first about automation and the functionality of the automation system within any given email service provider. Now, knowing what kinds of campaigns you want to run is really helpful, right? So then you want to look in the system at what kinds of campaigns can be automated. Now, let's talk, for example, about shopping cart abandonment, because generally most decent email service providers are going to have support for an abandoned shopping cart campaign, because that's a very common need for an ecommerce website. So if you're looking at an SCA campaign, are there campaign templates in the system that you're looking at to get you started? Are you going to have to come up with the code for the emails by yourself? Are you going to have to come up with the sequencing and the delays all by yourself? Now, there are some trade offs here, right? So if you're just getting started with your business or you're not particularly tech savvy or you don't have a particularly large budget to do a lot of custom coding, having an email service provider that has a drag-and-drop system or has some example campaigns already set up, where you're just plugging in your logo and the colors and the time delay you want between the emails, that can be fabulous, especially when you're first getting started. But as you grow, one thing you need to be looking at with automation functionality in any of these email service providers is whether there is flexibility long-term. So I have great faith in you. I know that as you go on in your ecommerce journey that you become more savvy in how you run your business, and you start noticing some trends with your email marketing, you are going to be in a position to be a little bit more strategic about how you lay out your emails and how you lay out your sequences. And having the ability in a system to then go in and be flexible and set up your own campaigns with these custom layouts or custom timing can be really important. So this is just thinking ahead, right? So as you become better at this, are you going to have the flexibility in the automation system to do the campaign that you want to do? All right, also with the animated, or automated, excuse me, automated campaigns, if you could do animated campaigns, that'd be cool, too, but with the automated campaigns, you want to be asking the email service provider about the level of service they're providing here, right? So are they building the campaigns out for you, or is that something you do? And if it's something you do, be sure to get a demo or a trial period so that you can make sure that your level of technical skill meshes nicely with the complexity of the system that you're looking at. There are systems out there that are so ridiculously easy, drag-and-drop systems, they're great. There are systems out there that require a lot more tech skill, and they also tend to have a lot more functionality long-term. So those trade offs are there. Just be thoughtful before you sign any agreements or sign up for a year plan or something like that, that you're picking something that you are going to be able to work with and get those automation sequences set up well. All right, next up, I would encourage you to look at the tracking and reporting that is available through the system that you're considering. This may not seem like a big thing. And to be honest, it isn't a really big thing when you're first getting started. But again, as you grow, as your email list is bigger, as you're generating more revenue, and as you get more savvy as an ecommerce marketer, you're going to want to see more and more metrics of how your email is doing. And there can be major differences between the tracking and reporting in different systems. So for example, most systems will track things like clicks and opens and how many people purchase something after reading the email. But if you're planning on running more complex campaigns from the get-go, you might want to think through what information you would want about those campaigns, and then verify that those metrics are available in the system you're looking at. Also, as you start running more and more campaigns and more complex campaigns, it's really useful to be able to download your statistics into a spreadsheet program like Excel so that you can analyze the statistics. So just double check that you have that ability in whatever system you're looking at, too. So again, thinking ahead, right, we just want to make sure we can grow, and as we become better at this, that we have the information available, and it's not going to be this huge pain to pull the information out of the system. All right, when you're looking at a system, I'd also recommend you look carefully at their template options. Now, templates are the pre-built emails that are available that, in theory, you're just going to drop your logo in and change the colors and maybe tweak the layout just a little bit. But basically, it's a plug-and-play system, right? You plug your information in, and you're able to send emails that look reasonably professional. Templates are amazing, I mean, especially when you're first getting started or you don't have the tech skills or you don't have the budget for something custom. They can just be the best thing ever. But it's important to look and make sure that the company that you're looking to work with has templates, if you're going to use a template, that they have templates that are going to be able to be adjusted enough to match your branding so that your emails are recognizable to your customers, because you're going to have a much easier time using email for marketing if your customers recognize the email is coming from you and it's reinforcing whatever branding and messaging that your site has going on. All right, so in order to look at templates, you need to think through a few things. Most of this is about thinking through the types of emails you'll be sending out. When we think about batch and blast emails, those newsletter or sale emails that we send out manually to our lists, having a big image, that hero image at the top is pretty common. But then you need to think through, are you just going to be sending out emails with that one image and maybe some text? Are you planning on sending supporting articles or recipes or guides or something else further down the email that you're going to need space to drop in? Maybe you're planning on doing product highlights, or you want to have multiple product recommendations in your emails. All of that are things that you should be considering when you're looking at templates, because you don't want to mess with those templates too much unless you are some sort of coding expert, because those templates are really finicky, because they're meant to work both on a desktop and on a tablet and on a mobile device, which is great. It used to be that we didn't have that functionality, even a few years ago. But now it's standard. But it also means you can't mess with the template like you used to be able to. All right, so let's say that you're not finding any templates that work well for you. You need very specific branding, or you need a specific layout. What are your options? Most companies, especially the higher-end email service providers, and believe me, there are some high-end email service providers out there, and they are fabulous. I miss them dearly. They often offer a service where you can draw out what you want for an email, have a designer draw it out, and then there are people who will build that template for you. And that service generally runs anywhere from $1,500 to $3,000 in my experience. So that's just something to think about. That is a chunk of money. So if that's something that's in your marketing budget, great. You can have a really nice, well-branded email. But if it's not, you're going to need to figure out how to work with the templates that are already in the system. All right, next up, this won't matter to everybody, but if you work a lot from your phone or mobile device, you may want to check and see if whatever email service provider you're considering has some sort of mobile app so that you can log in to the system on the go. This requirement, if this is really important to you, I'm going to tell you up front this is going to limit your options, because a lot of the email service providers do not have apps. And the ones that do have very low functionality apps, from what I can find. But just something to think about. If you're used to having constant access to systems from your cell phone, then you need to take that into account when you're picking somebody, and decide how important that's going to be, if that's going to be a hill you want to die on or not. All right, next up, you need to make sure that whatever system you choose can be fully integrated with both your ecommerce platform, so this is where you sell things, right, like Shopify or Magento or BigCommerce or CoreCommerce or whoever you're using, as well as any other systems that are critical for operating your business, okay? So these are things like if you have a customer relationship management system, if you're doing more sales focus, you might have a CRM. Your ecommerce platform has to, or excuse me, your email service provider has to interface with your CRM. If you're using a landing page system like Leadpages, you need to make sure that that is interfacing with your email service provider. If you are using a separate system for email capture and you've got your popups and your static banners and all of that on your site through another system, you need to make sure all of these systems can talk to one another. It does not work for you to be manually downloading email addresses out of one system and putting them in another. Don't get stuck in that idea. That doesn't work because part of the effectiveness of email is when someone signs up that they are immediately getting whatever follow up you promised them. Otherwise you're going to end up with a lot more spam complaints. So don't get into this idea of downloading automatically. If someone signs up on Facebook, it needs to feed directly to your email service provider. If they sign up on a popup, it has to feed directly. People place an order on your ecommerce site, it has to feed directly into your email service provider. So this is a big thing to worry about. The nice thing is, thanks to Google, this can be really simple. You're just normally typing in the name of your ecommerce platform and the name of your email service provider. So you can type in Shopify integration ActiveCampaign, or something like that, and see if those two systems talk. That information is usually very readily available. All right, you also need to be concerned about deliverability. So what does deliverability mean? This means the number of emails that actually make it into your customer's inbox and on the way are not marked as spam, okay? So we're talking about the issue of, when you send an email, does that email get marked as spam? Does it get put in their spam box, their junk folder? We need our emails making it to our customers' email boxes. Now, granted, if our customer has Gmail, we're probably making into the promotion box. That is a very different thing than getting marked as spam and ending up in a junk folder, right? At least there's a chance they're going to see our email, and it doesn't have this big spam label on it. Okay, so deliverability really matters. And this is a tough thing, because there are a decent number of companies out there that maybe don't have the best deliverability rates, to put it nicely. So this is something you need to ask about. And you really are looking for 98% or higher deliverability. It's also helpful if the company has a dedicated deliverability team. These are people who have working relationships with the big email providers, like Gmail and Microsoft, for Outlook and that sort of thing, or Yahoo Mail, where if there's an issue, that they're able to talk to those companies directly and say, hey, why did all of our email going to customers with your email address get marked as spam, something like that. So this is actually really important, because you are working hard, right, to build your email list. And building an email list is not a free thing. You're putting effort into it. You might be paying for lead ads, something like that. And then to be sending emails and not having them get to people, that is a huge problem. Now, something to keep in mind, companies do not have high deliverability rates on accident. Yeah, they've got good systems if they're going to have a high deliverability rate. They probably have dedicated deliverability teams. But the other thing they do to ensure that their deliverability rates are high is they do not tolerate bad behavior from their customers. Okay? So if you have an email service provider who's just letting you sign anyone up, import any list, send any email, that is a bad sign, okay? You're probably going to have really low deliverability rates, because a company like Gmail or Yahoo Mail is going to see emails coming from that provider and be like, oh, yeah, these are the people who send a lot of spam. So this is just something to be thinking about. You actually do want it to be a little bit difficult to send your email, okay? Just like you don't want to go to a college that gives As to everybody, okay? It becomes a meaningless grade, right? If it is so easy to send email, if no one ever asks a single question about where you got your lists or what you're putting in your emails or where you got an email address, then you need to be suspicious and ask more questions, okay? That's all I'm saying. So I'll give you an example. I recently switched to a new email company because I needed to shift the type of emails that I was sending for one of my companies. And I went to send my first email with them. And I checked them out. They have a great reputation. I was actually quite happy with them. And instead of my email going out at 11 a.m., I got an email from their deliverability team saying, hey, we are holding your email until you give us some more information. And they needed a very detailed, documented list of where I had gotten every single one of the email addresses for my company, which fine, because I did obtain them all perfectly legitimately. But I had to basically swear that I had done this legally, and it was fine. I mean, the whole process took like 15 minutes. My email went out 15 minutes later. It was fine. This is a good thing. I mean, yeah, it was a pain in the moment, but that's a good thing. That tells me that they care and that odds are good that my emails will continue to go out and not be marked as spam going forward, okay? So that's a good thing. Another thing to look at in terms of this whole deliverability question, something you can kind of investigate without having to ask too many questions up front is look at who their other clients are. Email service providers are really good, generally, at letting you know if they have big companies that use them for their email. So that's just another thing. You can look and say, oh, they're working with larger companies. They probably have a little bit higher quality service going on. I mean, you're not going to get the same service as a big client, don't get me wrong. Your $25 a month is not going to get you the same service as maybe a company like Costco gets. But nonetheless, generally that'll be a more reputable company, right? All right, so along with deliverability, you also want to look at their customer service, okay? And this is things like how quickly will you get help if you need it? Do you have different ways to contact them? If you're on a very inexpensive plan, then you're probably only going to have like an email contact information going on or maybe live chat during Monday through Friday, eight to five, type thing. If you have a more costly plan, I would sincerely hope that you would have the ability to contact them 24-7. So when I had a huge email list with one of my companies, it was over 300,000 people, we were paying a pretty significant amount of money for our email every month. And the company we were working with was a very high end company. And they were fabulous. But I had a phone number. If something went wrong on a Saturday at 9:00 p.m, I had a way to get a hold of the main line, and I actually also had my account rep's cell phone number, as well. So there were things I could do. If I had some massive catastrophe, there were people I could call. But you're not going to get that level of service as a really small business. Next up, you want to look at how extensive is their help, okay? So is this more of a self-service system, where they give you a bunch of articles and they expect you to figure it out? Or will they get in there and do things for you? And again, that's probably going to be a function of how much you're paying. Setup is also a factor you want to think about, if you need to be setting this up on your own, or are they going to do initial setup for you and kind of get you all set up and ready to go, and then kind of turn you loose on it? So that's just questions to ask. If you are paying more or if you have a larger list and are paying more, you may be assigned an account rep. And so a good question to ask if you're kind of working in that system is what would your account rep be doing for you? Will they be meeting with you regularly? Will they be making active suggestions, getting to know your business, helping educate you on how to do email marketing better? Or are they just your contact person if something goes wrong, okay? So that's just going to vary depending on the company and the type of plan you're on and how large your list is, things like that. All account reps are not created equal, let me tell you. But there are some amazing ones out there. All right, last up for factors you need to think about is, of course, the money factor, right? I've kind of been alluding to this with all of these other things I've been talking about. But your budget, in the end, is going to drive a lot of this decision for you. All right, so what is your budget? That can be a little bit hard of a question, right? You have a marketing budget hopefully worked out, and you may have some ideas about how much you can potentially spend on email lists. But let me give you a few things to think about when you're planning your budget. One is how big is your list? Now, if you are coming into this with a fairly large list, like I did very little email marketing until I had about 80,000 people on my email list. And this is just me not knowing how powerful it could be. And so I was using a very slimmed-down provider. I was sending out like one email every other week. I think I had just started sending out one email every week, when I contracted with a fairly big, fairly high-end email provider, and I got a great account rep, and I was able to just take my email and run with it. But if you have a very small list, you are going to be looking at different options than if you're coming in with 80, 100, 200, 300,000 people on your email list. Now, don't be intimidated, okay, because there are actually even free plans out there. I would not recommend a free plan because free plans usually come with a lot of strings attached. Maybe we can talk about those in another episode. But the low priced plans, where you don't have all the restrictions, for a lot of these service providers, generally start about $25 a month. So they are super affordable. But you can easily spend many thousands of dollars a month, depending on how big your list is and how much functionality you need, how much support you need. So there is a range. But that's good, right? Because that means there is something there for everyone. All right, next up, when you're talking about your budget, you need to be thinking about how much money you could reasonably make by putting a solid email marketing program in place. And this'll be a little bit easier to judge if you're already doing some email marketing and you kind of have a feel for how your customers respond to email. But if you have no system in place at all, it can be much harder to understand what the potential is, okay? And there's so many factors that go into this. There's no way we can cover all of them today. But let me just give you a general rule of thumb. Most companies will generally see a 5x to 10X return on their investment for email marketing. And that is a very general rule of thumb, okay? Some companies will see more, some will see less. But that would mean for every dollar you spend on email marketing, you're looking to get five to $10 back. I mean, that's part of the reason email marketing can be so powerful. But to get those kind of returns, you need to be careful what system you're using. You need to do your email marketing well. There are a lot of factors there, right? So that's just a general rule of thumb. All right, and then finally, in terms of your budget, you need to be thinking about, can you balance being affordable now with the ability of the system to grow with you? I mean, the perfect email marketing system would have a very inexpensive plan at like $25, but they would be able to grow, regardless of your email list gets to half a million people, right? That's going to be a hard thing to find, just to put it nicely. But still, you want to look for something that's affordable now but does have some potential to grow, because ROI, as I said, or your return on investment can be really hard to predict. It could be that you have this amazing email list that just worked correctly with the right sequences of emails, is going to generate an amazing return for you. Or it could be your email list, you know, just doesn't buy that much stuff off email. And that could be a little bit hard to predict when you're first getting started. And so finding something that's affordable but can scale and even maybe unlocking more complex or really cool features that you can use for some functionality can be really awesome. Also, just a warning up front that moving systems is a huge pain. I actually just did it, and it's no fun at all. One of the main problems with moving systems, besides having to get your list into a new system and prove that it's a legitimate list, that you didn't go out in the internet and buy it or something, is that you lose a lot of your tracking and your tagging, normally, when you move systems. So you don't have the easy ability after you move systems to go back and say, well, these were people who purchased something, or these are people who spent more than $100. So a lot of your ability to segment goes away. And we'll talk about segmenting in a future podcast, but just something to keep in mind. Don't make this decision willy-nilly. You do not want to move, okay? But that being said, picking carefully is important, but it is better to pick a company and start sending email and start making money off your email list than it is to get stuck in any sort of cycle of indecision. And I realize that with all the things I've given you today, it's really easy to be overwhelmed and say, you know, maybe I'll just not worry about this right now. And please, please don't do that. Go back through the show notes. There is a full transcript there so that you can take your time to go through the different things that I've talked about. And think through them and make a list of the factors that you need to be considering, because no system is perfect, right? That doesn't exist. But it's better to have an imperfect system reliably collecting email addresses and sending out email regularly than it is to have nothing at all, all right? Okay, so that's it. Thanks so much for joining me today. I'll be back in your feed in a few days. But in the meantime, I'd love to hear from you. If you have feedback or ideas for future shows, you can find me at SavvyBusinessMethod.com, as well as on Facebook and YouTube. Be sure, please, to hit that little subscribe button in iTunes or Stitcher. That way you don't miss any episodes. We're doing episodes on Mondays and Thursdays now. I don't want you to miss anything. Also, rating and reviewing this podcast, I really appreciate when you guys do that. I love reading the reviews, and that helps it move up in the ranking so people find it when they search. And that's helpful for everyone else. So I appreciate anything you can do for me on that, and I will see you next time. Announcer: Thanks so much for listening to this episode of The Savvy Business Method, with Julie Feickert. If you enjoyed today's episode, please leave a review and subscribe. And for more great content and to stay up to date, visit SavvyBusinessMethod.com, Savvy Business Method on Facebook. We'll catch you next time. Episode 015: Choosing an Email Service Provider