Back in the days when I ran the regional office of a major ESP, pitching new business was a lot easier once I started listening to my head of sales.<\/p>\n
It was almost all about price, but is it still? \u00a0And what does the death of the CPM pricing mean to you?<\/p>\n
<\/p>\n
<\/strong>Coming from the world of advertising, I was convinced that winning new clients was, like in advertising, a contest of who had the best solution.\u00a0 In advertising it was all about who had the best creative idea.\u00a0 In email marketing, I assumed the best solution was a combination of platform, people and creative\/strategic ideas. \u00a0But as it turns out in email marketing the best idea never won<\/a>.<\/p>\n Rigid pricing didn’t work<\/strong> This attitude drove my sales guy out of his mind.\u00a0 And we weren\u2019t winning much business.\u00a0 I remember quite a few shouting matches with him over our email marketing CPM pricing<\/a>\u00a0\u2014 to the point where some people outside my office thought we were going to come to blows (he\u2019s actually one of my best friends to this day).<\/p>\n And then one day, it hit me.\u00a0 Nick was right; regardless of the quality of our solutions, we were losing pitches because of our price.\u00a0 In the deals we pursued, clients would go through the motions of checking out the platform (the dreaded demo), and meeting the team, and listening to our creative and strategic ideas.<\/p>\n But in the end, the selection of ESP came down to one driving factor\u2014price. Pitches were driven on the client side by procurement folks whose job it was to get as low a sending rate (CPM) as possible.\u00a0 If you were one of the top vendors in the Forrester wave Email marketing vendors research<\/a> the procurement folks viewed you as interchangeable with any of the other top vendors.\u00a0 So hiring the one with the lowest price just seemed to make sense.\u00a0\u00a0 Once I stopped fighting the pricing game, we started to win a lot of business. I mean a lot<\/em>.<\/p>\n And so, in my own way, I ended up contributing to the relentless downward spiral in CPM\u2019s the industry has seen over the last six-seven years.\u00a0 There\u2019s a \u201cfactory\u201d cost of sending emails.\u00a0 The difference between that cost and the CPM represented the margins being made by the ESPs.<\/p>\n During this time reductions in factory costs could not keep up with the downward trend in the pricing paid by senders.\u00a0 As margins were shrinking towards zero, investments back into the email platforms shrank as well.\u00a0 That was one negative outcome of the contraction of email marketing pricing.<\/p>\n CPM prices hitting rock bottom<\/strong> Clients who would have been satisfied with a $2 CPM six years ago, now expect to pay 50 cents or less.\u00a0 But because there isn\u2019t an ESP today that can stay in business sending emails for free, the days of choosing your ESP based on price are coming to an end, if they haven\u2019t already.\u00a0 Prices can\u2019t get much lower than they already are.<\/p>\n However, some consequences are not inherently negative.\u00a0 Interestingly enough, the fact that CPM\u2019s have hit (or are about to hit) rock bottom brings us full circle back to where I started.\u00a0 By that I mean that the search process for a new ESP<\/a> is going to become much more complex than simply who has the lowest price.<\/p>\n A bigger role for marketing in email marketing<\/strong> There is two pieces of good news that go along with this development.\u00a0 First, it should mean that your overall email marketing program will get better, faster than in the days where price drove your decision-making.\u00a0 ESP\u2019s are going to need to hire more people who can deliver agency services (creative, strategy, account management) with their email platforms.\u00a0 And they are going to need to spend more time upfront thinking about your business and how they can grow it.<\/p>\n And second, there are resources available that can help you navigate the process, companies like David Daniel\u2019s Relevancy Group, as well as websites like this one.\u00a0 For years marketers have used search consultants to assist them in selecting new advertising agencies.\u00a0 \u00a0The cost of switching out a fully embedded ESP<\/a> providing a comprehensive solution is much more than just switching platforms. If you\u2019re running a multi-million dollar email program, now is the time to consider using email search consultants for your next RFP.<\/p>\n","protected":false},"excerpt":{"rendered":" Back in the days when I ran the regional office of a major ESP, pitching new business was a lot easier once I started listening to my head of sales. It was almost all about price, but is it still? \u00a0And what does the death of the CPM pricing mean to you?<\/p>\n","protected":false},"author":25,"featured_media":4403,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[2],"tags":[36,70,203],"dealstore":[],"coauthors":[537],"acf":[],"_links":{"self":[{"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/posts\/4402"}],"collection":[{"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/comments?post=4402"}],"version-history":[{"count":0,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/posts\/4402\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/media\/4403"}],"wp:attachment":[{"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/media?parent=4402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/categories?post=4402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/tags?post=4402"},{"taxonomy":"dealstore","embeddable":true,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/dealstore?post=4402"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.emailvendorselection.com\/wp-json\/wp\/v2\/coauthors?post=4402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nAs a result, during the first several new business pitches I worked on with my head of sales I tended to be very rigid regarding our pricing.\u00a0 After all, if the clients wanted the best solution, shouldn\u2019t they be willing to pay more for it?<\/p>\n<\/span>We were losing pitches because of price<\/span><\/h2>\n
<\/span>Downward spiral of Email marketing CPM fees<\/span><\/h2>\n
\nThe other major consequence of the pressure on ESP\u2019s to cut their CPM fees was the fact that few took the time to think about what would happen when prices hit rock bottom\u2014when further reductions became impossible.\u00a0 Because that\u2019s where we find ourselves today. \u00a0Even Nick was appalled when it took a bid as low as of 65 cents per thousand to win a new client.<\/p>\n<\/span>The glory days of Email marketing CPM have come to an end<\/span><\/h2>\n
<\/span>Selecting email service providers on quality<\/span><\/h2>\n
\nEmail marketing software and service providers will need to be evaluated on the quality of their people and ideas for your business.\u00a0 \u00a0The role of procurement will be reduced and the role of marketing will be increased in the selection process.\u00a0 Qualitative evaluations with replace quantitative ones.\u00a0 The entire solution offered by the ESPs competing for your business will need to be thoroughly examined, discussed and agreed upon by the various client stakeholders.<\/p>\n<\/span>This means good news for your email program<\/span><\/h2>\n
<\/span>Help in choosing the best email service provider<\/span><\/h2>\n