Capterra Sales & Marketing Tech Blog

Got leads? Find CRM, marketing automation, and more sales & marketing tech

How to Build an Email Marketing Budget that Scales (Not Scares!)

Share This Article

There’s no shortage of options when it comes to choosing an email marketing provider (ESP). In fact, that’s probably what makes selecting one so difficult!

If you’re newer to email marketing, you might feel like you’re in over your head. During the research stage your mind will likely be flooded with questions like: How much will it cost? What’s included? What will your limitations be? Which features do you really need? Will you be able to scale up your efforts when you’re ready?

Well, you’ve come to the right place! If you’re evaluating email marketing solutions, this is the one resource you’ll need to get your bearings. We’ve broken everything down for you to make it easier to understand and included a helpful checklist at the end!

Understanding the Most Common Pricing Structures

Email marketing pricing can be one of the hardest things to understand when evaluating ESPs (and one of the most important)! Here’s a crash course in what to expect:

Formula

Email marketing pricing is typically based on a simple formula: Price = Features + Volume + Extras. The price you pay will be determined by a combination of these three elements:

  • Features are typically divided into various tiers like basic, moderate, and advanced (we’ll talk more about these features in a bit).
  • Volume can take the form of either contacts or emails sent. Many ESPs base their pricing on the volume of contacts that you have in your list. The benefit to this approach is that it’s very easy to determine exactly how much you’ll be paying. The drawback, however, is that you’ll end up paying more as you grow your contact list, which can feel like being penalized for doing a good job. For this reason, smaller and newer businesses typically start out with an ESP that uses this type of pricing model. It’s much less common to find an ESP that bases their pricing on the volume of email messages that you send, but it’s often a more cost-effective choice for companies with larger email contact lists. It’s also a better choice for mature marketers who segment their lists and send more targeted messages (rather than mass emailing). The benefit is that you don’t have to feel constrained by your list size and you only pay for the messages that you want to send. The drawback is that it can be harder to estimate how much you’ll end up paying if you don’t have a well-defined email strategy yet.
  • Add-on extras come in all shapes and sizes to allow you to customize your plan to suit your business’s needs. The most common extras are things like graphic design work, SMS text messaging integration, strategic planning assistance, and higher levels of customer service. It’s important to pay attention to how much these optional extras will add onto base plan prices when comparing providers.

Cycle

Almost all ESPs offer services on a monthly basis, which helps to make marketing costs predictable month-over-month. However, a few providers (SendinBlue, MailChimp, Campayn, and Sarbacane) offer a pay-as-you-go option, which can result in savings for business who send emails less regularly.

Free Offer

Many ESPs offer a free version of their software for you to try so that you can explore the interface and features. But, as you might expect, the free versions of paid software are significantly limited in their functionality. Typically, these limits come in the form of how many contacts you can import, how many emails you can send, and which features you can access. These “forever free” plans (available from SendinBlue, MailChimp, and Vertical Response) remain free throughout the entire duration of their use, but they are constrained in a way that’s meant to entice you to upgrade to the paid version of the same plan.

Some free versions are timed trials of the exact same software that you’ll have to pay to continue to use. Free trials usually only last 30 days, while some are as short as 14 days and as lengthy as 60 days. Make sure you know how long your trial period is so that you can devote plenty of time to testing out the tool before it ends.

What’s Included in an Email Marketing Platform?

Knowing which types of emails you can send, the features that are included, and what kind of support you’ll receive is crucial in understanding which email marketing provider will be the best fit for your company.

Platforms

Before choosing an ESP, think very carefully about which types of emails you’re going to be sending – bulk emails, transactional emails, and/or automated emails. Bulk emails are the basic campaigns that send one message to many recipients. Transactional (or SMTP) emails are those that are sent to individual recipients after an interaction with your business (ex. an order confirmation or shipping notification). Automated emails rely on a workflow that uses triggers, logic, or actions to send timely and relevant emails to users. Providers will vary in their offerings across these email platforms, which means it’s important to know which capabilities are included.

Features

  • CRM – Providers will differ by how much data you can store about your contacts and how you can customize that data. Some may limit how many lists you can have or whether a contact can appear in multiple lists.
  • Segmentation – How you can segment your lists will vary as well. You may be able to filter and target your contacts based on the data you upload about them, their past engagement with your emails, and their purchase behaviors.
  • Personalization – Most providers will allow you to personalize your emails with simple things like contacts’ names, but some providers may also more advanced personalization features like the ability to insert a last purchase date.
  • Design – Many platforms offer drag-and-drop design tools so that you can create emails easily in a WYSIWYG editor. Some may also offer professional templates for you to use and responsive designs to allow your emails to render better on mobile devices.
  • Reports – Reporting can vary widely! Some providers only provide basic data like opens, clicks, and unsubscribes, while others dig deeper to report on things like soft vs. hard bounces and segment data by subscriber list.
  • Sign Ups – Know which features are available to you from each ESP after a subscriber signs up. Some will allow you to use a double opt-in approach, while others are only set up for single opt-in. Similarly, some may not be equipped to handle an autoresponder email or email series.
  • Automation – Depending on your email marketing strategy, it might be important to you to find a provider that offers automation workflow templates instead of one that requires that you set up everything from scratch. Find out whether the provided automation integrates into your website’s platform as well.
  • Testing – Many ESPs enable you to do A/B split testing or multivariate testing on your emails, but they all vary on which variables you can test and how many you can test at a time.
  • Plugins – Identify which content management systems (CMS), ecommerce tools, and list building apps an ESP integrates with to make management of your list easier.
  • API – If you want to create any custom connections between your emails and your website, you’ll need access to a provider’s application programming interface (API). Even if you’re not technical and don’t plan on doing any advanced programming, this feature can come in very handy.

Support

No matter which ESP you select, you should have access to help center articles and technical documentation at a minimum. Most will also have email ticket support in case you encounter a problem or have a question that’s not covered in the help resources. It’s very rare to find an ESP that provides phone support (SendinBlue is one of the few that I’ve found), and if they do it typically comes at a premium.

Personalized services are typically offered at a higher price point for enterprise-type clients. These services tend to include top-tier support like a dedicated account manager, onboarding assistance, and full-service execution of campaigns.

With the arsenal of knowledge that you have about all things ESP now, you can accurately analyze your options and decide on one that’s right for your business! Use the checklist below to help you estimate your costs for more accurate budgeting.

Email Marketing Budget Building Checklist

  • Sort your list of contacts based on when they last opted-in to receive emails from you. Only build your budget based on how many have opted-in within the past two years.
  • Create a list of the types of emails you send regularly and how often you send them. Use this number to estimate how many emails you want to send per month. (If you’re not sending emails yet, take your number of opt-in contacts and multiply by 2, 3, or 4 for a quick estimate.)
  • Determine which common features are essential to your goals and what you’re willing to compromise on if they’re not available.
  • If you plan on sending both email campaigns and also transactional emails, ensure your provider supports both (only SendinBlue, MailJet, MailChimp, and SendGrid do this). If it does, find out if it costs extra for this functionality.
  • Consider how aggressively you plan on growing your email list to determine how costs might increase over the coming year.
  • Ensure that the provider you select supports your existing automation (or provides the type of automation you plan to start).
  • Be honest with yourself when it comes to your level of experience and familiarity with email marketing tools and technology in general. Find a provider that fits with your needs and comfort-level.

Looking for Email Marketing software? Check out Capterra's list of the best Email Marketing software solutions.

Share This Article

About the Author

Erin McKeeby

Follow on

Erin is a seasoned marketer who is passionate about creating "wow"-worthy customer experiences. As General Manager for SendinBlue in the U.S., she regularly shares her experience relating to email marketing, automation, customer engagement and brand-building.

Comments

No comments yet. Be the first!

Comment on this article:


Your privacy is important to us. Check out our Privacy Policy.