5 Differentiators to Look For in a Consolidated ESP Marketplace




  • — January 16, 2019

    The year 2018 will be remembered for tremendous consolidation in the martech industry, marked by Adobe’s $ 4.75 billion purchase of Marketo and Twilio’s $ 2 billion acquisition of SendGrid.

    Such consolidation is rarely driven by the needs of customers. Far more often, the catalysts are the financial concerns of the companies themselves, combined with pressure from investors. Since consolidation often results in an acceptance of the status quo, marketers may wonder who to look to for innovation in the future.

    A recent Litmus survey found limitations with their email service provider (ESP) is the third greatest challenge for marketers. Sixteen percent said changing ESPs is on their list of marketing priorities. This level of dissatisfaction represents a solid opportunity for marketers to seek out ESPs who are finding innovative ways to address the limitations they’re facing with current providers.

    Here are five differentiators marketers should look for in the current, consolidation-heavy market:

    1. Expertise in Niche Verticals:

    As the email market continues to mature, some vendors are finding niches within specific verticals. Specialists in email for retail and e-commerce, for example, are differentiating themselves with services tailored to transactional email, while those with expertise in financial services are making a mark by offering best-in-class data security. Marketers should seek out those who can help them deliver messages to suit the specific needs of their customers while meeting the requirements and expectations of their respective industries.

    2. Third-Party Add-Ons:

    An ESP embedded within an all-in-one martech platform can lack certain tools and inhibit the ability to integrate third-party add-ons — add-ons that can make a big difference to an email program’s success. These include things such as personalization tools, analytics, CSS inliners, A/B testing software, and email production platforms. Each can help marketers continuously optimize email content to significantly improve engagement rates. For instance, a 2018 survey of marketers found 74% believed personalization has an “extreme” or “strong” impact on advancing customer relationships. A lack of CSS inlining, meanwhile, can make emails look unprofessional. But it isn’t necessary to look for an ESP who has tried to build all these tools into their service, since chances are good they haven’t done so particularly well. Instead, look for those who are making it easy for marketers to integrate the third-party products that serve them best.

    3. AMP Support:

    Google’s Accelerated Mobile Pages (AMP) make web pages as fast as the instant articles you find on Facebook or Apple News. For mobile users, especially before 5G, the difference between AMP and ordinary pages is stark. For ESPs, the big news is that Google announced AMP support for Gmail early last year. That means that with AMP, email experiences can more closely mirror the interactivity of web experiences, allowing customers to seamlessly browse content or complete tasks right within the email itself, actions like ‘book now’ or ‘learn more’. Marketers can even keep email content up-to-date with AMP, so the content is current no matter when the user looks at it. But almost a year after Google’s announcement, many ESPs are still dragging their heels when it comes to introducing AMP support, meaning marketers will be unable to fully optimize their messaging for the 26% of people who use Gmail. An ESP that is the exception will definitely give you the edge.

    4. GDPR Compliance:

    Many US-based ESPs have opted to lose international clients rather than make the effort to establish GDPR compliance. But any company doing business in Europe or aspiring to international expansion must be able to demonstrate not just their own compliance but also that of any third-party service providers they depend on. And we’ll soon have a similar situation domestically, with the California Consumer Privacy Act (CCPA) taking effect in 2020.

    Since running afoul of the GDPR can result in fines of up to 4% of revenues, it needs to be a top-of-mind issue for all companies who are or who hope to be doing business in the EU. But a 2018 survey found 80% of marketers were concerned that their martech partners would expose them to GDPR risks. For email service providers, demonstrating GDPR compliance is a prime differentiator. Using a GDPR-compliant ESP will also give you a head start toward CCPA compliance, a huge advantage as your competitors start to scramble in the year ahead.

    5. Innovative and Transparent Pricing:

    There are many variables associated with ESP pricing, including set-up fees, pricing by volume, fees for premium support, and overage fees, among others. ESPs can set themselves apart by clearly communicating what marketers can expect to spend, exactly what they can expect to receive, and what kind of ROI they will achieve. An ESP who can offer you straightforward pricing can be an ally with skin in the game, one who has a stake in your success.

    Value is the Key

    Consolidation is a fact of life in this industry. The good news for marketers is that in order to compete, an ESP must provide real end-user value and there are still many opportunities to innovate in the martech and email space. Even though they might try, the biggest platforms can’t be all things to all customers, and too many view email as an afterthought or a low priority. This attitude provides an entrée for any ESP for whom email is top priority, as long as they solve real problems and offer real value for their customers.

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    Author: Matt Harris

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