ESPs: Is Bigger Really Better?

  |  December 29, 2005   |  Comments

Are there downsides to using larger e-mail service providers?

I have great respect for Al DiGuido and I agree with much in his last column. But I’d like to present a counterpoint to his argument. Al heads one of the largest email service providers (ESPs) in the world. One would be very surprised if he didn’t see the benefits this provides to his clients. However, I think there’s more to the story than just the size of the service provider.

I completely agree that delivery speed is important and some ESPs allow their servers to become so overloaded they provide poor delivery rates to their clients. Given the ever-decreasing cost of hardware and bandwidth, I doubt the problem is financial; I suspect it’s managerial and organizational. I also agree that working with large ESPs has advantages. They have substantial resources, which enable them to scale with you regardless of how large you grow your business. They also tend to be financially stable. This is important, as switching providers is lots of work and becoming more so with the growing adoption of authentication and accreditation systems. Large ESPs’ staffs have a detailed understanding of email marketing and can offer strategic and tactical insights. Finally, they probably didn’t get to be so big without providing great service.

Overall, the two largest service providers do a great job.

But there can be downsides. Larger organizations tend to be less nimble. A huge infrastructure requires much more effort to manage, maintain, and upgrade. This can be seen in support for emerging authentication systems like DomainKeys, which has been adopted much more quickly by smaller ESPs.

That lack of flexibility can translate into other areas, too. I recently spoke with an ex-employee of one of the largest ESPs. He shared the frustration he felt as a salesperson at regularly having client feature requests denied. The issue wasn’t willingness or desire but that the system architecture wasn’t flexible enough to implement the features. A large infrastructure can be a burden as well as an asset. It can make changes more complex and lengthen product upgrade cycles (as Microsoft can attest to).

Though delivery speed may be excellent with some large ESPs, I’ve seen no evidence it’s related to company size. Sure, larger companies have more infrastructure. They also have more pressure on that infrastructure. Many factors can affect delivery rate. What matters in the end is whether your rate is acceptable and meets your needs.

When it comes to email delivery, it’s not just how fast you send. When you start sending also determines when messages are delivered. I regularly hear of large ESPs that severely restrict when a client can send. Customers must book a send window far in advance. Miss that window and it may be hours, even days, before the message can be rescheduled. When it comes to scheduling and delivery windows, priority is inevitably given to a company’s key (read: large) clients.

Interestingly, Al considers a million-name list to be relatively small. Though such a list shouldn’t stretch the capabilities of an ESP’s servers, it’s not small. We’ve found most companies send in batches of 50,000 to 500,000 names. Not necessarily because that’s their list size, but because they’re segmenting and targeting messages. Our experience working with some of the world’s largest companies bears this out, and I don’t believe it will change in the near future. When a million-name list is considered small, the overwhelming majority of clients will be small.

Ultimately, it’s not a company size issue, but a customer service one. If your provider is unable to deliver your messages when and how you want, you need a new provider. Size isn’t the sole indicator of capability in regard to delivery performance, capability, or service levels.

Determine what your needs are now and what they’re likely to be in the next few years. Be careful about overestimating your needs. You get what you pay for, and there’s no value in paying for services you’ll never use. Then, select a provider with the technology, infrastructure, expertise, and client services to meet your needs. Find one that will treat you as a valued client.

Until next time.

Want more email marketing information? ClickZ E-Mail Reference is an archive of all our email columns, organized by topic.

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Derek Harding

Derek Harding is the CEO and founder of Innovyx Inc., a member of the Omnicom Group and the first e-mail service provider to be wholly owned by a full-service marketing agency. A British expatriate living in Seattle, WA, Derek is a technologist by background who has been working in online marketing on both sides of the Atlantic for the last 10 years.

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