Email Marketing 101: from Digital Marketing to the best ESPs

I’ve been working in email marketing in the UK since 2013. It’s been a decade of exciting projects in industries including Telecommunications, Financial Services, Higher Education, Real Estate, Travel, Beauty, Entertainment, Automotive, Consulting, Software Development and Wellness.


I’ve implemented and optimised “legacy” CRM platforms (Salesforce, Microsoft & IBM) for large and medium sized organisations. More recently I enjoy working with innovative, high-growth start-ups and scale-ups implementing “new gen” CRM platforms such as Klaviyo and Iterable.


It’s common knowledge that it’s much cheaper to keep an existing customer than finding a new one. In the current economic environment I see more and more eCommerce brands focusing on customer retention and loyalty instead of pouring money into acquisition channels. This is true across the board, from apps building intensive welcome journeys to keep their new customers (or users on a free trial) all the way to established CPG companies building their DTC businesses.


The marketing channel of choice for customer retention is email marketing. It also happens to be the marketing channel with the highest return-on-investment (ROI). BTW email is fantastic for lead nurturing and other purposes but that’s another story.


Earlier this year I worked with Paired which is the #1 app for couples globally and Scholl which is the #1 foot care brand globally.


So I could just start writing about all the email marketing and customer relationship management (CRM) projects I have delivered. Instead I start with some keyword research with Moz. The top 10 keywords for “email marketing” by monthly volume are:

  • mailchimp
  • mailchimp login
  • mail chimp
  • digital marketing
  • sendgrid
  • email marketing
  • mail chimp login
  • direct marketing
  • mailchimp pricing
  • mailchimp alternatives

Wow, at this level you see Mailchimp (or mail chimp) dominating with six out of the top ten keywords. The other four? Three of the four are high level concepts: digital marketing, email marketing and direct marketing. Then there’s a mailchimp competitor: Sendgrid.


This insight will help me to structure this article. I’ll start with digital marketing, then get into direct marketing and then email marketing. I’ll compare four different email service providers (ESP): Mailchimp, Sendgrid, Klaviyo and Shopify Email.


Digital Marketing


I want to cover digital marketing in an eCommerce context so let’s see what Shopify says. In “Digital Marketing Essentials: An Overview of 6 Important Channels” https://www.shopify.com/uk/blog/digital-marketing 

Alexandra Sheehan writes “Digital marketing is the act of promoting a brand, product, and/or service through paid and organic advertising efforts on online platforms. Digital marketing encompasses pretty much any online promotion of your ecommerce business.” Then lists the 6 important channels:

  • Social media marketing
  • Email marketing
  • Search engine marketing and optimization
  • Content marketing
  • Marketing automation
  • Remarketing

A practical way to classify these channels is to split them into paid and organic groups. Social media used to be mostly organic way back, these days it’s mostly paid. Remarketing (or retargeting) could be done both via paid social advertising or email marketing / marketing automation. 


Direct Marketing


According to Shopify “Direct marketing is a promotional method that involves presenting information about your company, product, or service to your target customer without the use of an advertising middleman. It is a targeted form of marketing that presents information of potential interest to a consumer that has been determined to be a likely buyer”. https://www.shopify.com/uk/encyclopedia/direct-marketing 

Forms of direct marketing include:

  • Brochures
  • Catalogs
  • Fliers
  • Newsletters
  • Post cards
  • Coupons
  • Emails
  • Targeted online display ads
  • Phone calls
  • Text messages

Email Marketing

 

“Email is a prominent digital communication tool that people use to communicate with one another and with businesses. And according to the Forrester Analytics: Email Marketing Forecast, 2018 To 2023 (US), email usage is on the rise. About 96% of people 12 years and above use the digital channel, and more and more are willing to sign up for businesses’ promotional emails. However, there’s an increasing dissatisfaction with branded emails—which means there’s more opportunity for the brands who do it well.”

https://www.shopify.com/uk/blog/digital-marketing

 

Exactly, there are obviously a lot of companies who spam their recipients with irrelevant stuff but it doesn’t mean “email is dead”. Quite the opposite. Paid channels are getting more and more expensive so keeping your current customers is becoming more important. The most efficient marketing channel for that (as measured by ROI) is email marketing.

https://www.litmus.com/blog/infographic-the-roi-of-email-marketing/


Email Service Providers


Right, so you want to send some emails. There’s a wide range of ESPs to choose from. Here I’ll just provide a top line comparison focusing on pricing and my own experience using them.


Mailchimp

Free tier: up to 500 contacts and 2500 emails per month.

50k contacts: $299 including 500k emails per month.


Sendgrid

Free tier: up to 2000 contacts and 6000 emails per month.

50k contacts: $450 including 500k emails per month.


Klaviyo

Free tier: up to 250 contacts and 500 emails per month.

50k contacts: $720 including 500k emails per month.


Shopify Email

Free tier: unlimited contacts and 10000 emails per month.

500k emails: $490 per month (no limit on contacts).


Best free tier: Shopify (10000 free emails per month).


What’s best if you have 50k contacts and / or you’re sending 500k emails per month?


It depends on your send frequency.


If you’re actually sending 10 emails per contacts per month (on average 2.3 emails per week) then Mailchimp seems to be the cheapest ($299 per month).


If you’re sending 5 emails per contacts per month then Shopify Email will be cheapest ($240 per month).


It also depends on how much revenue you make from email and the value you put on easy integration with your eCommerce site.


For median eCommerce companies making up to $1M annually with an average order value (AOV) of $40 revenue per recipient is about $0.1. So for 500k emails sent per month it’s $50K.

https://help.klaviyo.com/hc/en-us/articles/360033669492-Performance-Benchmarks-for-Email-Campaigns


Companies making $50k per month from 50k contacts and 500k emails will be more than happy to spend an extra $400 ($421 to be exact) to get the 200+ pre-built integrations with eCommerce platforms and other third party apps that Klaviyo provides.

https://www.klaviyo.com/features/integrations

 

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