Email marketing is without doubt, one of the most important channels for lead nurturing as evinced by a number of studies and research reports in recent times. It has also been argued that it serves as an important channel for lead acquisition although the jury is still out on that point. When it comes to continued business development, or maximizing customer lifetime value, email marketing appears to be the foremost channel that is tapped. It is essential for every business looking to service their customer base as well.
So what governs the final decision when it comes to a choice of email marketing technology?
In our first post on unlocking the potential of email marketing, we focused on the three email marketing metrics that one should measure, set certain targets for and try to achieve with their email marketing technology. To sum up, these were:
- Customer Lifetime Value
- Contribution to Corporate Revenue
- Deliverability and Average Monthly Revenue
For the second part in this series, we’re going to look at the reasons why email marketers choose in-house email solutions or on-premise email marketing technology over outsourced email marketing technology as highlighted in The Relevancy Group’s survey of 400 email marketing professionals.
Reason #1 & #2: Cost & Effectiveness
Email marketers are generally concerned with cost (45%) and email deliverability (37%). That’s understandable. Everyone wants to get the best value out of their selected solutions for a reasonable price. This is not something that applies specifically to email technology but to almost every purchase decision that is being made (luxury items being excluded from the conversation). These considerations tie in nicely with the top three benefits marketers cite when using on-premise or in-house email solutions.
Upon reaching a certain organizational size, using outsourced solutions can simply become too expensive for many organizations – that’s probably the case in most industries, simply because that is the business model on which most outsourced services are based. For smaller organizations, outsourced solutions are cheaper and easy to adopt – it works for a small database of customers and a fledgling email marketing campaign. However, outsourced solutions may simply become too expensive once an organization scales and starts looking into sending a few million email messages a day. When that happens, these businesses are looking at a whole new tier when it comes to payment – and ultimately, a bigger bill. This is the time when businesses that turn to an in-house email solution begin to see economies of scale on an investment in an on-premise email technology.
Reason #3: Control
Aside from effectiveness and cost, marketers are turning to in-house email solutions due to the increased ability to maintain control over production and integration with other applications and platforms, as well as security.
While a small percentage, it is interesting to note that 7% of businesses are opting for on-premise solutions out of compliance with government regulations. Security has often been cited as a reason why businesses choose to use on-premise solutions. Having data stored in a business’ email servers rather than in the cloud increases control and protection of that data. The European Union’s Data Protection Directive mandates that personal data can only be transferred across borders if the third party country is able to adequately protect such data. With many outsourced providers operating through cloud services, geographical location and ownership of data becomes a grey area for many companies seeking compliance with government regulation. In this scenario, using an on-premise or in-house email solution is thus equivalent with adhering to industry best practices in terms of data protection.
Do you agree with the survey findings? What are some of the other reasons why marketers might turn to in-house email solutions?