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How to Choose an Email Service Provider (ESP)

This week, I met with a company that was considering leaving its email service provider (ESP) and building its email system internally. I would have said no if you asked me a decade ago if that were a good idea. However, times have changed, and the technology of ESPs is pretty easy to implement if you know what you’re doing. I’ve even built and implemented my own with my colleague Adam Small.

What Changed with Email Service Providers?

The biggest change with ESPs has been in deliverability. It’s not the ESPs that changed; it’s the internet service providers (ISPs). Email deliverability professionals at major ESPs used to have direct contact with ISPs to troubleshoot and ensure good deliverability. Over time, ISPs have shut down those offices and turned to algorithms to capture and monitor sender reputation, analyze content, block or accept email, and route it into SPAM folders or the inbox.

Keep in mind that getting delivered does NOT mean getting in the inbox! 100% of your emails could go to the Junk Folder, equating to 100% deliverability. Whether or not you’re using an ESP doesn’t give you a better chance of reaching the inbox if you know what you’re doing. That’s why you have to deploy an inbox placement monitoring platform.

There are discreet characteristics that Email Service Providers offer that you may not wish to redevelop internally, though. You’ll have to evaluate the cost of development to the cost of the email service. In my opinion, when you begin sending hundreds of thousands of emails per month, you may want to develop your own solution.

  • Speed – If you send millions of emails daily, developing a company’s infrastructure like Salesforce Marketing Cloud will probably never make sense. Their outbound mail management platform can send billions of emails without blinking an eye.
  • Expertise – If you don’t have a savvy staff or need a lot of hand-holding through the creation and execution of your email marketing strategies, you don’t want to build your solution. You may want to work with an API instead.
  • Bounce Management – Email deliverability isn’t as easy as sending an email. There are dozens of reasons why emails bounce, and you have to build and manage a process for deciding whether to resend the email or to unsubscribe the email recipient.
  • SPAM Legal Compliance – Different regulations worldwide govern the use of email for commercial solicitation. Ensuring you’re compliant can save you a lot of headaches.
  • Design – Do you need pre-made responsive email templates or designs? Or do you need a drag and drop design? Or do you need advanced content and customization integrations in your email? You’ll want to ensure your ESP has the tools and capabilities to personalize and send emails properly.
  • Subscriber Management – content preferences, subscription forms, and unsubscribe centers are key to acquiring and personalizing email for subscribers.
  • API – Do you want to manage subscribers, lists, content, and campaigns outside the ESP? A robust API is critical.
  • Third-Party Integrations – Perhaps you want off-the-shelf integrations to your content management system, a Customer Relationship Management platform, an e-commerce platform, or other systems. For example, we use Mailchimp’s RSS-to-email feature to automate our newsletter.
  • Reporting – click-through rates, A/B testing, list retention, conversion tracking, and other robust reports that fully report on email metrics will assist you in increasing the value of your email marketing program. Be sure to analyze and compare the features of each ESP.
  • Artificial IntelligenceAI is driving some amazing features in ESPs. It’s able to personalize content and send times as well as use generative AI to optimize your subject lines and content. Integrating third-party AI platforms can be quite the undertaking.

And, of course, pricing is key! We don’t see too big a difference in features between many of the top email service providers in the market compared to smaller ESPs. If you can narrow down the features above that are critical to your organization, then I think shopping on price makes sense. And if you’re sending millions of emails, it may even make sense to integrate with a third party like Sendgrid, or even build your own MTA.

How to Choose an Email Service Provider

Douglas Karr

Douglas Karr is CMO of OpenINSIGHTS and the founder of the Martech Zone. Douglas has helped dozens of successful MarTech startups, has assisted in the due diligence of over $5 bil in Martech acquisitions and investments, and continues to assist companies in implementing and automating their sales and marketing strategies. Douglas is an internationally recognized digital transformation and MarTech expert and speaker. Douglas is also a published author of a Dummie's guide and a business leadership book.

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