Death of a sales model?

If you're a big brand sending millions of emails every month and you're using a professional email service provider (ESP), have you ever stopped to consider if you are actually getting good value?

Is spending upwards of £15,000 a month money well spent? Surely not when you tot up the annual total and realise that's over £180,000 on email marketing every year.

The 'per email' billing model in the high volume email market has to be outdated and unfair.

If we look at the history of marketing software provision to brands and agencies, for years and years our web-based businesses have adapted the traditional model - which was software bought outright with upfront costs - into a system which offers the benefits of 'performance and volume-based' pricing models.

Brands and agencies have loved it: 'You mean I only pay for the results and there is no risk to me?'

'Exactly sir!' replies the technology supplier. Perfect. Everyone is happy.

This has affected every facet of our digital industries: in search engine optimisation, in pay-per-click advertising, in lead generation and of course in email, all vying for that easy way to sell.

One thing they have all forgotten is that there must be a point when performance and volume-based pricing doesn't make any sense. They have forgotten that there was once a way to buy the best system upfront and have it maintained by their chosen supplier.

So now email is proven as an important marketing channel and it's losing the stigma it once had, isn't it time that big brands moved back to the old fashioned method of buying software?

Why haven't the top email marketing firms stepped forward and offered to sell their software and hence offer a flat-rate service?

The reason is, of course, money - and lots of it. Most will argue 'til the cows come home that the standard ESP system with armies of white-listing consultants is the only safe way of delivering millions of emails successfully.

Of course this isn't completely new in the email industry; a few ESPs do sell their software. But the thing that puts customers off is that after buying the servers, they still have to get big internet pipes and even more costly, ensure their IT team can manage the solution which often requires specialist knowledge.

And then there's the white-listing - 'how will I keep the paths clear for my emails'?

The next issue is the speed of the whole installation. Setting up anything internally takes time, especially when multiple departments are involved.

In marketing, the mantra really has been 'no-software' and this is the reason for the success of web-based applications such as those used in email marketing.

So you are starting to get the picture. Going down this route that only a few ESPs offer is so painful it would scare even the most hardened of marketing directors.

But how about if you mix the software and the standard ESP models up slightly? The email company provides a software sale, which takes the form of an exclusive license offered to each brand and their sub-brands.

The dedicated servers are hosted by the professional ESP but fully managed with all the white-listing experts and ongoing strategic advice.

You have something that starts to look so compelling a big brand would find it difficult to refuse. The 'per email' billing model is banished.

As other large ESPs will undoubtedly begin to offer this service the question is: will they be able to cope? After all, most are used to extremely high revenues from small quantities of customers.

If the 'flat-rate' billing models are created to prevent customers from leaving, how will these companies support their extremely high overheads?

The upshot of this is that you can expect to see the email marketing landscape change rapidly from now on. This certainly won't be for the faint-hearted and a few CEOs of the bigger ESPs may have coronaries wondering how this will affect their businesses.

Expect also to see big brands wheel in their legal teams to prise themselves out of 'lock-in' contracts and move elsewhere to better quality, dedicated systems where they own the software and have all the bandwidth they need - all the benefits of the standard ESP system without ever involving the IT team.

Welcome to a new age of fair pricing - from now on the email marketing arena for top brands will never be the same again.

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