The Iceberg Effect – How to compare ESP pricing

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You are in the middle of choosing a new ESP and have narrowed your list down to a few – the ESP shortlist. They all seem to provide great service and good value for money – or do they? When considering the deals on the table do you know what the full costs are? Or have you only seen the tip of the iceberg, with many extra costs lurking beneath the surface?

A fair way to compare ESP pricing

When selecting an ESP it’s important to consider ahead of time what services you may require and whether or not you will have to fork out for them every time. Making a comparison between the different kinds of ESPs is similar to comparing smartphones without knowing the price. They might all have the same basic features (SMS and calls) but with very different extras (cameras, operating systems) and a very different price point.

Services such as basic account set up and competency email marketing training are things which many people would expect to be included in the price that they have been quoted. But often hidden costs turn up, which can leave a sour taste in your mouth having already signed a contract.

This is a common problem which can see small and large companies alike racking up hundreds, if not thousands of pounds worth of expenses before they have even sent their first email. Thoroughly reading the small print and asking for the prices of extras ahead of time may well save you trouble and surprises later on. Here are some of the common catches to look out for:

Set Up Fees

Some ESPs charge a basic administration fee to have your account set up and ready to send from. Onboarding with your new ESP isn’t scary, but there will always be costs and they could rise more if you plan on using your own dedicated IPs. Paying these fees will be unavoidable if you want to start using the platform, so make sure you are aware of any costs like these before you sign the contract.

Training Fees

Whether you’re new to email marketing or a seasoned pro, most people will need to be shown their way around a new system – but how much will this cost you? Training costs vary depending on many factors, such as how in depth and personalised the session needs to be and whether it will be done over the phone or face to face, although quotes of up to £1,200 are not unheard of. Newer senders should be particularly cautious of this, as they are often the ones who require the most support.

Dedicated Account Management

Account Management can take many forms. This can range from having someone on the end of the phone to answer your questions, to going for full service email marketing and having a  team load your campaigns for you and give you a detailed breakdown of the reporting.

Make sure there is clarity about what types of services are included in the price – whilst you might not be able to expect free campaign management, it should be a given that there is someone to help you with your day to day questions free of charge. It might be smart to add a SLA or Service Level agreement to the contract.

Bolt Ons and Extras

If you’ve chosen a new ESP based on the features they provide, such as a powerful segmentation tool or an integrated deliverability suite, be sure to check that they are also included in the contracted rate. You want to compare ESP pricing, but some ESPs offer their more advanced features as bolted on extras which come with an additional monthly charge or a one off payment required to use them. Be sure that all of the features which attracted you to the ESP in the first place are part and parcel of the service and price.

Overage Fees

Most ESPs operate on a cost per mille (CPM) basis or will charge you a fixed rate for you to send a set volume of emails. But what if you go over this amount? Some ESPs have an overage charge which they will impose if you go over your monthly quota instead of charging you on a CPM basis. If you anticipate some months where you will go over, make sure to calculate that in, before you sign.

Expected charges and the rest of the iceberg

Although there are some charges which can be expected when using an ESP, such as a set charge per volume sent, email creative design and build, and charges for damaging IPs allocated to you (for example, if they have been blacklisted due to your poor sending reputation), it’s easy to see how some customers end up paying above and beyond what they bargained for.

As a simple example, if you sign a CPM contract worth £1,000 per month (PM) you could end up paying an extra £300 for a training session to be shown your way around the system, £200 to have your data segmented and a further £500 once your mailing has been sent to have your reporting explained to you. Before you know it the invoice which you expected to see at £1,000 PM has made its way up to £2,000!

Avoid this happening to you by considering what features are a must have, what kind of support you expect to be part of the package and how much flexibility you will need. It is all part of the Requirements stage of choosing a new ESP.  Take this information to your prospective ESP and make any final decisions armed with the knowledge of the true cost of using the platform. It will it easier to compare ESP pricing.

Lisa Coombes

About Lisa Coombes


Lisa Coombes is an Account Manager for Variant4 and has worked in digital marketing since leaving university, where she gained a degree in Psychology. With a proven background in social media, her current role sees her advising clients on how to best succeed with their email marketing.

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  • Mandy

    That’s a great article.

    I just visited your website http://www.variant4.com which also has some useful info.

    • Lisa Coombes

      Hi Mandy,
      Thank you for your kind feedback.
      I’m glad that you enjoyed our website. Did you check out our other articles in the blog section? http://www.variant4.com/home/blogs Might be worth a read if you’re after more info :)

    • Mehdi

      It wasn’t that impressive to me, there were typos everywhere!

  • JN

    As with anything, you pay for what you get. If you want a quality service, naturally you will pay more. It all depends on whether you want to pay more for a reliable SOLUTION, or pay less for a system that could turn out to be a PROBLEM. Cheaper certainly doesn’t mean it’s as good! We have always gone for platforms that are tried and tested and that I have done my research on. THEY ARE ONLY ‘HIDDEN COSTS’ iF YOU A) DON’T ASK AND B) DON’T READ YOUR CONTRACT! The market is split nowadays, between companies that are just Email Service Providers and then companies that offer a whole solution. They both do different things, they both charge different things and one is a lot more beneficial to a company than the other. Moral of the story – for me, if they’re cheap it rings alarm bells. I would rather pay more for more and ensure I am dealing with a PROFESSIONAL company.

    • Lisa

      Very true. I’ll admit I got stung before but it was in the contract. As long as you know what you’re signing nothing is hidden. Never again will I pay for a cheap, half-hearted platform – they don’t work!

  • Kim Rotheram

    ‘The proof is in the pudding’ as they say. One of the biggest things I’ve learnt is that you outgrow an email service provider quickly, because email should be just part of your communications strategy. I needed a platform that did email, SMS, social, connected with various CRM and e-commerce platforms, so an enterprise company that offers a full solution is the only way forward. For me going to a small provider wasn’t and isn’t an option.

    The first thing I’ll look at is what customers they already have on board. That’s a massive idea as to their capabilities and overall package.