Email Service Provider

Email service provider (ESP), refers to a company which provides the automated sending of emails as part of email marketing. Email service providers offer their customers a technical infrastructure and, optionally, a software tool with a graphical user interface to manage the sending of emails quantitatively and qualitatively. These are either bulk email soft- and hardware, or an agency that accompanies or completely manages email marketing.

Regular newsletters, mailings, and email marketing campaigns are executed using an ESP. In addition to the technical infrastructure for sending the emails, this often includes the administration of data records, prepared email templates, tracking, as well as various report and analysis procedures in order to optimize the efficiency of email campaigns from an economic point of view. There are various email service providers, which differ greatly in terms of portfolio. Some service providers also provide options for targeting, segmenting, and testing various email versions.

General information

Email marketing is still one of the most important instruments of customer loyalty and sales promotion. Expenditure on email marketing has grown by about 10% every year in recent years, according to Forrester.[1] The current development of this type of customer communication is mainly caused by the mobile sector. About a third of the recipients of newsletters and mailings open them with their iPhone, for example.[2]

Email service providers play a central role in this because they provide the infrastructure to deliver emails in large quantities to the different devices of the recipients. Especially since this medium is one of the most cost-effective options,

  • to get in touch with interested customers,
  • increase customer loyalty,
  • to generate leads and sales for businesses
  • and permission marketing, direct marketing, and dialogue marketing.

Types of email service providers

Email service providers differ not only in their service, but often also in the infrastructure used and the measures for spam control. The following types of email service providers provide a first orientation:

  • SMTP relay provider: SMTP Relays are used every time an email is sent outside your own address range, even in private communication. In the case of bulk emails or mass mailings, SMTP relays are third-party providers who can exclude spam by means of authentication, licensing, and their own network. This means that email servers do not classify certain emails originating from such a server as spam. Sometimes, SMTP relays are used together with an API, which automatically reads customer data and provides reports.[3][4]
  • Dedicated email service provider: Similar to dedicated servers, dedicated email service providers are designed to use their own infrastructure. The servers are used exclusively for sending emails. The advantage is that dedicated systems can enjoy a high reputation because of their closed infrastructure and can be effective in the fight against spam. Dedicated systems often provide additional features such as managing records or delivering emails to a variety of server systems, such as PHP, ASP.NET, or Java. Using an API, bulk emails can be automated. The technical resources used are in this case on the side of the provider.[5]
  • Web-based services / cloud email marketing: Cloud services in the area of ​​email marketing provide their web-based resources to send bulk emails. Usually an interface is included, which may be used by all company employees. Customers of cloud email services often use it as software as a service throughout the company and pay monthly fees. This means that the use of cloud email services is associated with relatively little effort and high level of planning.
  • Integrated marketing platform: Some marketing software and tools offer integrated solutions that enable marketing, web analysis, and other functions to send bulk emails. Such solutions are often designed for use in large companies. The prices are correspondingly higher, because the functionality is partly very high. Cross-channel marketing, data-driven marketing and IOT applications may be part of the portfolio.

Practical relevance

The large number of ESP providers gives decision-makers a large choice. Small and medium-sized enterprises (SMEs) and large corporations differ significantly in their requirements profiles. A choice of possible quality criteria of ESPs:[6][7]

  • The management of datasets is possible. Filter options, targeting, and segmentation are also included in the portfolio.
  • Templates can be created and edited.
  • An infrastructure is offered which functions as a send engine and handles the massive sending of the email templates.
  • Opt-outs are updated automatically. Opt-ins are integrated according to the law.
  • Metrics such as the open rate, delivery rate or click-through rate are collected and the data is provided as reports.
  • Tests can be performed to determine whether emails are retrieved from clients and server variants.
  • Various measures for spam control and quality assurance are taken.
  • Different MIME types are supported. It is possible to change the emails dynamically, for example, in the context of target group features or seasonal campaigns.

Additionally, there are aspects such as a free test phase, monthly contracts or various payment options, so that costs agree with the customer’s requirements. Because some ESPs will set a limit on emails, others will bill based on the number of datasets or shipping frequencies.

Legal issues

Depending on the country in which email service providers and their customers are active, very different conditions and legal requirements must be observed. For the US, the Acceptance Use Policy and the CAN SPAM Act should be mentioned. In Europe, the conditions for bulk mailing are further specified in Directive 2002/58 / EC (Data Protection Directive for Electronic Communications). Email service providers may also participate in other industry initiatives to help combat email spam.

Relevance to online marketing

Numerous online marketers rely on the services of email service providers, even if critics have often predicted the end of email marketing due to the development of spam. The numbers in the industry speak for themselves. Email service providers are still useful and cost-effective when sending emails to customers in large quantities. The return on investment in email marketing is about 44 dollars with an investment of one dollar.[8] Emails can impact sales by accurately sending target group-specific purchase incentives and relevant recommendations to a wide range of recipients. The choice of an email service provider may therefore be regarded as a critical factor.

References

  1. 25 Mind Blowing Email Marketing Stats salesforce.com. Accessed on 04/13/2016
  2. Statistics that Prove Email Marketing is (Still) Not Dead blog.capterra.com. Accessed on 04/13/2016
  3. Compare email providers emailserviceprovider.org. Accessed on 04/13/2016
  4. SMTP Relay sendgrid.com. Accessed on 04/13/2016
  5. We're Maine’s Only Commercial Email Services Provider (ESP) dirigodev.com. Accessed on 04/13/2016
  6. What an Email Service Provider is and how to use one totalsend.com. Accessed on 04/13/2016
  7. Email news and strategy streamsend.com. Accessed on 04/13/2016
  8. Infographic: 10 Must Know Email Marketing Stats 2014 emailexpert.org. Accessed on 04/13/2016

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