10 Things Your Startup Should Know about Email Marketing Companies

App Sumo is a startup that focuses on deals for web apps. They send hundreds of thousands of emails each month, and Noah Kagan (The founder) Skyped in to share what he’s learned from the world of email marketing. In this 15 minute video Noah explains 10 things that you should know about Email Marketing Companies before you give them your business.

Summary:
1- You have weak control over placement of unsubscribe link. Your email should have an unsubscribe button, but you should be in control of it.
3- If a reader hits “Unsubscribe” you have no control over the unsubscribe page.
2- Setting up new campaigns takes 2 hours.
4- They require double-opt in. This is okay in some circumstances, but this decision should be left up to the company.
5- You don’t realize how many people need email confirmation. Email Marketing companies typically don’t handle this gracefully.
6- Hard to connect to your database for stats.
7- You can be banned from emailing if your unsubscribe rates are too high.
8- A/B testing consists of time, subject line and from, not body text.
9- Security is a big issue. Example: Aweber got hacked.
10- You should use two IPs – one for marketing and another for transactional emails.

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  • As long as you don’t bad mouth MailChimp, I’m happy 🙂

    • Anonymous

      Although Mail Chimp is sweet (we use it for our newsletter), there are some short comings to it.

  • A lot of these 10 points simply aren’t true for many email marketing companies. Yes they include many of the things to look out for, but don’t tar every email marketing company with these same 10 faults.

    • noah kagan

      Alice, 100% agree with you.

      My points are not about 1 email marketing or the other but more that people have NO clue about all the limitations / restrictions.

      ps. I will say I do publicly hate Aweber for not telling me hackers got access to our customers emails.

  • 1. wrong, a good ESP gives you full control and add such nifty thing like list-unsubscribe header…
    2. wrong, every good ESP gives you full control of this if you want it
    3. not really wrong but most time consuming is testing and design a good campaign
    4. Double Opt In your way to go, if you send mail without optin your are f***ing spammers
    5. wrong, a good ESP handles the whole list with optins, unsubs, feedbackloops
    6. sometimes but the big ESP often have a lot of interconnect suites for stat tools like omniture or webtrekk
    7. spam = spam = spam = banned, but not because of high unsubscribe rates
    8. your part, ESP should give you the tools and help with reading numbers but not to setup endless test suits
    9. go to certified company with ISO-900x or higher datasecurity and service policys
    10. the amount of IPs should match your volume per campaign, and you should not only differ by IP, you should use other local-parts in the from header and use other DKIM keys

    • you have not even named one esp in your reply

      FAIL

      • I don’t like to resurrect such old posts, but I’m working for an ESP and listing my employer or other ESPs is not a way to promote my opinion on this topic.

  • Zac cohn

    So you recommend bringing things “in house” – what exactly do you mean by that? Develop your own email marketing/analytics software from square one, or do you use and piece together other software to help you along the way?

    • noah kagan

      The big take away is MOST people should use an email marketing company.

      If email is critical for your startup / business then I would bring it in house.

      • Ax

        Any chance you could respond to that? Do you recommend developing your own email marketing/analytics software? If not, what do you recommend as a base?

        • noah kagan

          If email is key for your business I say ultimately you need to bring it in house to make it a competitive advantage.

          We have our own system which includes grouping, filtering by dates, a/b testing, email templates, connection to user history, etc…

          You can build a system like that using critsend, sendgrid & postmarkapp. Also, you may be able to do this by using APIs for Mailchimp.

          Base email companies to use are Mailchimp, campaign monitor, vertical response, etc…

        • Lyle Pratt

          Amazon’s new SES service is also a great resource for sending large amounts of email. If you run on Django, there is even a backend for it already available located here: https://github.com/hmarr/django-ses

  • Interesting post and video.

    There’s a lot in it that’s subjective because
    it’s from his personal/professional experience.

    When it comes to bringing your email marketing
    in house one must keep in mind what do you do if
    your domain becomes black listed by an email
    provider (AOL, Gmail, Verizon…).

    These 3rd party ESP have one thing your start up
    company don’t have and can’t afford… a department
    that’s able to keep track of email providers and blocked
    emails.

    So when you make the decision to bring it in house
    you must implement email marketing “best practices”
    because you can’t afford to have your domain or IP
    address black listed.

    At the end of the day… you have to shop around. We
    actually manage our clients’ email marketing for them
    and we’ve see some of the worst ESP out there.

    I believe overall, he’s point is make the readers and the
    viewers look closer at what they have. We have colleagues
    who send out massive emails and they are using 3rd party
    ESP.

    When it comes to email marketing you have learn it or
    outsource it. Those within my circle don’t even use Mail
    Chimp. :o) Pretty much everything he stated doesn’t hold
    true with ESP we use. We don’t have to do double opt-in,
    we have a strategy for opt-outs and other stuff.

    Thanks,
    C.F. Jackson
    http://www.EmailConnecting.com

  • Nishank

    Thats why we use a full-service email marketing firm like KobeMail. They hand hold us through all our campaigns with dedicated account managers.

    -Nishank Khanna
    CEO, Emprivo

    • Anonymous

      Thanks for your insight Nishank. I’ll check out KobeMail.

      • Nishank

        I’ll share my own experience with email marketing with others here…

        We started with CampaignMonitor back in 2003 (when they used to have a downloadable software version of their system). After a few years we realized it was a mess to manage onsite and switched over to MailChimp.

        MailChimp is really good for a self service system. If you have a very small budget or starting with a list size of zero, go with MailChimp.

        Once your list size starts to grow, the best investment you can make is going with a full service email marketing service provider. And here were our reasons for switching:

        1) We wanted to focus our time on running our business, not tweaking email templates to make sure they get delivered.

        2) Deliverability is something I don’t even think about now — because my dedicated account manager does all that for me.

        3) The analytics insights get now are actionable. As a founder you have to be a General, not a grunt. Look at the battle field with an aerial view — focus on the metrics that matter.

        We were penny-wise and pound-foolish to use an SAS email service provider. The best way to explain this is to use an outsourcing example. If you’ve ever hired a $5/hr programmer on ODesk.com vs a $30/hr programmer, you know exactly what I’m talking about.

        Less time spent on grunt work — use your valuable time fior things that actually matter — building a great service and growing revenues.

        A full service email marketing firm like KobeMail (our current provider) or CheetahMail will cost more in the short run, but they’re experts who give you 1-on-1 advice on how to *SIGNIFICANTLY* improve your email campaigns and the gains you realize from it.

        For two of our products, we monitor the CPM we earn for each newsletter sent to our user base. Our provider has been able to help us close to double our revenue from the newsletters. They did it with:

        – Better deliverability (I see all the relevant analytics on what my account manager is doing and can call her up to make any on the fly changes to the campaigns).

        – Better analytics with actionable data (this has been the deal maker for us).

        I hope other entrepreneurs here can find this helpful.

        -Nishank Khanna
        CEO, Emprivo

      • Nishank

        I’ll share my own experience with email marketing with others here…

        We started with CampaignMonitor back in 2003 (when they used to have a downloadable software version of their system). After a few years we realized it was a mess to manage onsite and switched over to MailChimp.

        MailChimp is really good for a self service system. If you have a very small budget or starting with a list size of zero, go with MailChimp.

        Once your list size starts to grow, the best investment you can make is going with a full service email marketing service provider. And here were our reasons for switching:

        1) We wanted to focus our time on running our business, not tweaking email templates to make sure they get delivered.

        2) Deliverability is something I don’t even think about now — because my dedicated account manager does all that for me.

        3) The analytics insights get now are actionable. As a founder you have to be a General, not a grunt. Look at the battle field with an aerial view — focus on the metrics that matter.

        We were penny-wise and pound-foolish to use an SAS email service provider. The best way to explain this is to use an outsourcing example. If you’ve ever hired a $5/hr programmer on ODesk.com vs a $30/hr programmer, you know exactly what I’m talking about.

        Less time spent on grunt work — use your valuable time fior things that actually matter — building a great service and growing revenues.

        A full service email marketing firm like KobeMail (our current provider) or CheetahMail will cost more in the short run, but they’re experts who give you 1-on-1 advice on how to *SIGNIFICANTLY* improve your email campaigns and the gains you realize from it.

        For two of our products, we monitor the CPM we earn for each newsletter sent to our user base. Our provider has been able to help us close to double our revenue from the newsletters. They did it with:

        – Better deliverability (I see all the relevant analytics on what my account manager is doing and can call her up to make any on the fly changes to the campaigns).

        – Better analytics with actionable data (this has been the deal maker for us).

        I hope other entrepreneurs here can find this helpful.

        -Nishank Khanna
        CEO, Emprivo

        • Anonymous

          Thanks for writing all of this Nishank. I really enjoyed hearing your perspective on this, and I’m sure other entrepreneurs got value out of it as well. I hope to see more of you in our comments 🙂

        • Thanks for the insight, Nishank!

  • Jknightstone

    #1 – #5 — All valid if using Aweber and like that charge $10/month. But completely false if using a good ESP (CheetahMail, Exact Target, KobeMail).

    If email is important to your business, you can spend thousands in cost to bring it in-house (along with tens of thousands wasted in opportunity cost), or get a full service email marketing firm that offers dedicated transaction relay for the instant, real-important emails.

  • Hi, I enjoyed this. Can anyone comment on MadMimi.com?

  • pbreit

    It’s amazing that with as many players as there are in the marketplace, it remains *wide* open to new entrants. MailChimp is the only service with a reasonable free tier and it’s stunning growth is the result. MailChimp is otherwise nearly impossible to use.

  • There’s no doubt that email marketing works. In addition to the traditional email marketing (mass email) one should look at another marketing opportunity and that is the emails we all send from our corporate email addresses every day. I represent a company that has developed a solution for just those emails and thus this post.
    The basic idea behind wrapmail is to utilize the facts that all businesses have websites and employees that send emails every day. These emails can become complete marketing tools and help promote, brand, sell and cross-sell in addition to conducting research. Wrapmail is available for free at http://www.wrapmail.com

  • Hi there. I’m from MailChimp. Noah’s opinions in this video are all understandable (hi Noah), so I’m not going to comment on them.

    But I’d like to provide some technical clarification, in case there are other MailChimp users reading:

    1. You actually have full control over the display and placement of your unsub link. We give you a merge tag, which you can place however you want. Here’s an example of how one sender emphasizes their “update profile” over the unsub link: http://blog.mailchimp.com/unsubscribe-links-vs-profile-settings/

    Note that if your email doesn’t include that merge tag in its code (like if you’re coding your own) we’ll automatically place our footer with the unsub link for you. It automatically disappears if you add your own links.

    2. We allow you to fully customize your unsubscribe landing page. It’s found under the “form designer” area: http://kb.mailchimp.com/article/tips-for-customizing-your-signup-forms/

    There, you can add links to twitter, links to your RSS feed (where you can also setup our rss-to-email feature), or even post something funny and personal:

    http://blog.mailchimp.com/customize-your-unsub-form-with-lolcats/

    We encourage customers to modify their unsub screens and emails to ask why people are opting out. (I use wufoo for my own unsub survey). The built-in exit survey option that you describe provides some feedback for you (and also our abuse team) but you can add more advanced survey links.

    3. You can setup and save an email template inside MailChimp (there’s actually a template markup language to build your own): http://kb.mailchimp.com/article/how-do-i-create-my-own-custom-template We recommend you do this after fully testing the template code with the inbox inspector: http://www.mailchimp.com/features/inbox-inspector/

    4. Double opt-in is the only way to keep spam traps off your list. Spamtraps get submitted by your competitors, they get submitted by spambots, and they get submitted by frustrated users who feel like they’re being forced to submit an email in order to get some freebie (people input “steve@apple.com” just to get that deal)

    5. Re: spamarrest bounces, you do get them when using MailChimp. It depends on what you used for your “”Reply-to:” address.

    6. Our API also lets you sync stats. But there are also a myriad 3rd party apps that will do this too. Metric.ly is a recent one that comes to mind, http://metricly.com/ and we’ve also got some really deep integration with Google Analytics: http://www.mailchimp.com/features/google-analytics/ and our eCommerce360 plugin will tell you the ROI of your email: http://blog.mailchimp.com/tag/ecommerce-360/

    7. Our thresholds were set after extremely thorough research (genetic optimization via 61 trillion email data point comparisons): http://blog.mailchimp.com/project-omnivore-declassified/ plus we give lots of heads-up and warning before an account is suspended: http://blog.mailchimp.com/account-status-sasquatch-screen/

    8. Automated email A/B testing is a patent-pending feature we came up with in 2007. You’re right, it could use an update to make content testing more seamless. It can, however, be done with our dynamic content merge tags: http://blog.mailchimp.com/ab-test-your-email-design-and-content-in-mailchimp/

    9. Security is indeed a big issue. It’s more frightening than you know, actually. For those who are curious about our security measures, and who want to bring email security in-house, we’ve posted this: http://mailchimp.com/about/security/ and this: http://mailchimp.com/resources/guides/email-security/ I also recommend joining ESPC, because their recent presentation from Cisco (about University email systems getting attacked) made me poop my pants – http://www.espcoalition.org/

    10. That’s advice that I always used to give as well. It’s not bad advice, but I think it’s probably more important to advise, “You should protect the hell out of your IP reputation, or make sure that your ESP does” I talk a little about that here: http://blog.mailchimp.com/can-you-guarantee-my-deliverability/

    11. Re: length of email – Heh. That would depend on the quality and usefulness of the email. Also, whether or not your list is truly engaged (with double opt-in, you’ll know they truly want your email) and how frequently you send is also a factor. I send long-winded newsletters all the time, and get good engagement levels. But if you’re sending promotional offers to people who really just want a good deal, then yeah — keep them short.

    A note to Mr. Hontz — First, this is a very nice blog. I loved, loved, LOVED this article: http://thestartupfoundry.com/2011/03/11/angry-birds-overnight-success-only-took-8-years/

    I’m very interested in hearing about the shortcomings you mentioned. It’s stuff like this that helps us improve.

  • Helpful to hear about someone else’s experience with ESPs. There’s a lot of solid information in this video, however, Noah also makes a few general statements about ESPs that may only be applicable to the vendors with whom he’s worked. A few comments based on my own experience (SendGrid, StormPost, Click Squared, Constant Contact):

    1. Many ESPs do allow you to control the appearance and location of unsubscribe.
    We’re currently using StormPost ESP (Datran media), however, we manage our own unsubscribe process entirely. This means that we control the look, location and format of our unsubscribe process.

    2. Opt-in requirements vary by vendor.
    While some require double opt-in, as Noah mentioned, the vast majority of vendors with whom I’ve spoken only require single opt-in (though they *encourage* double opt-in for list health/sender reputation reasons).

    3. It’s critical to understand whether your ESP provides a dedicated IP.
    My understanding is that Mailchimp carefully monitors your sender reputation due to the fact that they *only* offer senders the ability to use a shared IP. If your sender reputation is at all questionable, you therefore put others at risk. In my opinion, a dedicated IP is the only way to mail.

    4. A/B testing capabilities vary greatly across platforms.
    I recently went through the vendor selection for a new platform, and was impressed to see recent developments in content targeting using conditional content blocks and dynamic merge fields (Bronto, for example, is doing some good stuff in this space). Most lower tier providers’ offerings are pretty basic though.

    5. An in-house solution isn’t ideal for all startups.
    While managing a home grown email solution can be ideal for some companies with the infrastructure to support the effort, for others, establishing a strong relationship with an ESP that meets your needs can be just as (if not more) effective. Your team likely has limited bandwidth, and if the match is right, sometimes it’s more efficient to outsource this to your ESP. The key is to *establish clear platform requirements* before you begin the vendor selection process.

    6. Just because you’re a startup, doesn’t mean you should be limited by a low-end provider.
    We settled for a platform that didn’t meet our needs early on due to cost issues and suffered the consequences when we realized the ESP wasn’t stable and didn’t offer the robust analytics we needed. When it was time to migrate, we figured out exactly what we wanted up front, negotiated hard, and are now thrilled with where we ended up.

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