Selecting an email services partner: Why ESPs view services as a necessary evil

It’s widely recognized that email marketing teams are under resourced. The result is that many companies still rely partly or entirely on third parties for services, despite software platforms getting easier to use.

This makes services an important component of the email marketing vendor selection process.

When deciding who should provide services there are three options:
1. Self-service, DIY
2. The email service provider
3. An agency

If your needs are small or you’re one of the lucky ones with all the resources you need in house you’re probably going to go DIY. The majority will be looking at options 2. and 3. or some combination. There are pros and cons to each, so how should you decide what’s right for you?

Let’s start by looking at the email service provider option.

Why email service providers view services as a necessary evil.

The single most important thing to understand is that ESPs first and foremost are software companies. This has a profound impact on how they view services and why they offer them. The margin on software is excellent, 80+%. The margin on services is closer to 20%. Software can scale as fast as you can install servers. Services work scales linearly with headcount and people are far more expensive to operate than servers.

Why would an ESP would offer services at all? The most cynical answer is: to make up for shortcomings of their software. Obviously the truth is rather more subtle than that. You’ll hear about services being a competitive differentiator, you’ll hear about how their services teams ensure greater client success.

When it’s all said and done, services are a necessary evil required by clients. For some email software companies it’s truly that their software is so poor or hard to use that they don’t dare let clients use it directly. For others it’s that the details of executing multi-channel marketing campaigns are such that their clients are more successful when they have skilled assistance.

In an ideal world though clients would be entirely self-sufficient and leave the ESP free to do what they do best, create and deliver great software.

The quality of ESP services

Does this mean that ESP services are poor? No, far from it. If it’s worth doing something it’s worth doing well and many ESPs do services very well. They are however still software companies and this can show in their customer experience.

ESP services teams

ESP services teams can be very effective. They’re typically very well trained on their platforms, they live and breathe email, and they have a direct line into the developers and administrators of the platform. Often they can get things done that no one else can. They also tend to be very efficient with well-oiled processes to get the job done quickly and efficiently.

However ESP services teams tend to be very, very busy. Their margins are far lower than other parts of the company and so they’re often under heavy pressure to increase efficiency. They do this by using automation, minimizing client contact and by ensuring they never ever do anything that isn’t being directly paid for.

They’re also under constant pressure to cross-sell and up-sell, to drive margin efficiency by selling you more. I know at least one ESP where the services team receive four times as much incentive for selling product than selling service!

Finally, “to a man with a hammer every problem looks like a nail” and they have one platform. Sure, there are integrations, but if it can possibly be done with their platform that’s what they’ll do.

When evaluating an ESP’s services what should you be asking?

Start with the makeup of the team who will manage your business. What are the roles and responsibilities and what fraction of a person’s time will be dedicated to your business. Find out how many clients a typical services employee works for at once. Also what are their actual turnaround times, both average and median. What is their response time for unexpected or emergency requests? How do they respond to these and at what point do you start to incur rush fees?

ESP strengths and Weaknesses

ESP strengths are efficiency, platform familiarity and channel expertise. Their Achilles’ heels are responsiveness and account management. So try to get a picture of what it will be like day to day working with the ESP. Will you have a relationship with a team or will you just be another trouble ticket or task order?

Next time we’ll look at agencies, their strengths, weaknesses and the things they’d rather you didn’t know.

About Derek Harding

Derek Harding was previously CEO and founder of Innovyx Inc., a member of the Omnicom Group and the first e-mail service provider to be wholly owned by a full-service marketing agency. Currently he is Chief Technology Officer at Trendline Interactive. A British expatriate living in Seattle, WA, Derek is a technologist by background who has been working in online marketing on both sides of the Atlantic for the last 10 years.

    Enable registration in settings - general
    Compare items
    • Total (0)