Everything You Need to Know About Email Service Providers

Let’s start off with a big ol’ number: 4.76 billion.

Let’s take it one step further with an even bigger number: 361 billion.

The number of email users, and the number of emails sent per day, respectively.

Email is easily one of the most simple, affordable, and impactful ways for marketers to reach a massive audience. It’s timely, easy to measure, engaging, personalized, and as mentioned, is widely used.

However, at it’s raw core, email isn’t actually that powerful of an asset for marketers. To unleash the full potential of email marketing, you’re going to need an ESP.

Before you ask, no, I’m not talking about Extra-Sensory Perception. Although it won’t enable you to read minds, Email Service Providers (ESP) wield immense power for marketers who wish to harness the might of email.

I’m going to take some time here to tell you everything you need to know about ESPs. After reading, you’ll be able to:

• Understand what an ESP is.
• Identify key features and purposes
• Choose from and compare different ESPs
• Troubleshoot common challenges
• Recognize future trends and changes
• Use and interpret ESP terminology / jargon

Understanding ESPs

What is an ESP?

An Email Service Provider (ESP) is a software platform that helps you send out email marketing campaigns to a list of users. Whether you’re sending a newsletter, promotional offer, product update, or any kind of email, really, an ESP can handle the mass distribution for you.

Using an ESP, you can design emails, manage your contact lists, track how your campaigns perform, and much more. ESPs are packed with features to create and distribute engaging emails, making it immensely easier to handle large-scale campaigns.

Although it may seem feasible for early-stage businesses with few clients, sending individual emails from your regular email system is time consuming and unnecessary, not to mention it’s nearly impossible to do once your contact list starts to grow.

Email Service Provider vs Email Client

To fully understand what an ESP is, it’s important to understand what an ESP is not. Gmail, Outlook, Yahoo, Apple Mail, Spark, OnMail, etc., are not ESPs. These are email clients, and they are commonly confused with ESPs.

Email clients are software applications that allow individual users to read and send emails.

ESPs are services used by businesses to manage, review, and automate email marketing campaigns.

Key Benefits and Features of ESPs

If you’re part of an organization that does email marketing, you’ll need an email service provider. The core features of ESPs are intentionally designed to enhance the effectiveness and efficiency of your email marketing campaigns, saving you time and money.

Here are the key features that are generally available in most ESPs:

Email Automation

Arguably the most obvious yet beneficial feature of ESPs is automation. Through your ESP, you can automate one email to send to hundreds, thousands, or even millions of accounts on your contact list. In addition, automatic email sequences can be triggered by certain actions or timings. Some examples include a welcome email when someone subscribes, follow-up email after purchase, or reminder for items left in a shopping cart.

Template Builders

ESPs typically offer a few pre-designed email templates that you can use for your campaigns. Although the email editors and builders are limited only to those who have an in-depth knowledge of HTML coding, ESPs give users the opportunity to edit and create their own templates.

Segmentation

Using segmentation to target specific audiences is essential in all forms of marketing. ESPs give you an easy opportunity to segment your contact lists based on criteria like demographics, behaviors, past purchases, and engagement levels. By doing this, you can easily tailor your messaging to meet specific needs and interests of your audience segments.

Personalization

Personalization in ESPs can extend to tailoring content based on user behavior, preferences, and data. This can include dynamically and automatically inserting customer names, location-based information, or personalized product information, all of which further enhance the customer experience.

A/B Testing

A/B testing lets marketers compare two versions of an email to see which one performs better. By testing different elements like subject lines, CTA buttons, or email content, marketers can update their strategies based on data-driven insights. Using these data and insights allows marketers to make the most out of their ESP.

Analytics and Reporting

ESPs offer comprehensive analytics that track metrics based on your campaigns. This includes but is not limited to open rates, click-through rates, conversion rates, bounce rates, and more. These insights are vital for understanding campaign performance and making informed marketing decisions.

Deliverability Tools

Your deliverability rate is one of the most important metrics with regards to email marketing. ESPs manage and monitor deliverability issues, ensuring that your campaigns stay out of spam folders.

Integration Capabilities

As is with any other marketing tool, a seamless integration to your tech stack is essential. Most ESPs offer vast integrative abilities with other marketing tools and platforms like CRMs, e-commerce platforms, and analytics tools.

Lead Capture Forms

Any data gathered through lead capture forms can be integrated into your ESP, allowing marketers to automatically segment new leads, personalize communication, and engage them with targeted email campaigns right from the outset. By using lead capture forms, businesses can effectively convert anonymous site visitors into subscribers and potential customers.

Choosing the Right ESP

There are a lot of ESPs on the market. MailChimp, HubSpot, Marketo, Salesforce Marketing Cloud, and Eloqua are just a few of the major ESPs available. With such a diverse pool of options, it’s important to know how to choose the right platform for you and your business.

Factors to Consider

Here are some important factors that you should consider before choosing an ESP:

Ease of Use

The ESP should have a user-friendly interface that makes it simple for your team to create campaigns, manage subscriber lists, and analyze reports without requiring extensive technical skills.

Features and Functionality

Simply ask yourself: does it have what we need? Evaluate whether the ESP offers the core features you need, such as automation, personalization, segmentation, A/B testing, and responsive templates. Advanced features like AI-driven insights and predictive analytics might also be beneficial depending on your goals.

Deliverability

Good deliverability ensures your emails actually reach your subscribers’ inboxes. Look for an ESP with strong deliverability rates, good relationships with Internet Service Providers (ISPs), and tools to help you manage your sender reputation.

Integration Capabilities

Check if the ESP can integrate smoothly with your existing tools and systems, such as CRM software, analytics platforms, and e-commerce solutions. This integration is vital for a seamless flow of data across your marketing ecosystem.

Reporting and Analytics

The ESP should provide detailed analytics and reporting capabilities that allow you to track the performance of your campaigns and gain insights into metrics such as open rates, click-through rates, conversion rates, bounce rates, unsubscribe rate, and more. It’s also an added bonus to have access to locational data and preferred device analytics.

Pricing

Compare pricing plans across different ESPs to find one that fits your budget. Consider factors like the number of subscribers, the volume of emails, and access to premium features. Be wary of hidden costs such as charges for additional features or overages.

Comparative Analysis

Now that we’ve uncovered the major factors to consider when selecting your ESP, we’ll dive into a comparative analysis of the major platforms. Today, we’ll be looking at five major alternatives; MailChimp, HubSpot, Marketo, Salesforce Marketing Cloud, and Eloqua.

MailChimp

• Ease of Use: MailChimp is well-regarded for its user-friendly interface, making it a favorite among small businesses and independent creators.
• Features and Functionality: While offering a solid range of features for email marketing, it's somewhat limited in customization and advanced segmentation compared to its larger competitors​.
• Deliverability: Reliable deliverability, with ongoing updates to maintain compliance and performance.
• Integration Capabilities: Offers robust integration options with popular tools and platforms, especially for e-commerce​.
• Reporting and Analytics: Provides straightforward and accessible analytics, ideal for users who need essential tracking without complex data analysis​​.
• Pricing: Known for its affordability, MailChimp offers various pricing tiers, making it attractive for budget-conscious businesses​.

HubSpot

• Ease of Use: HubSpot scores high on ease of use, offering a clean and integrated experience across various marketing functions​​.
• Features and Functionality: Strong in providing a wide range of marketing tools, particularly effective for B2C companies with its integrated approach​.
• Deliverability: Offers comprehensive tools to help ensure high deliverability rates​​.
• Integration Capabilities: Excellent CRM integration capabilities, with extensive native connections to other platforms​.
• Reporting and Analytics: Advanced reporting tools, providing detailed insights that help drive marketing decisions​​.
• Pricing: While starting plans are competitive, costs can grow significantly with advanced features and higher usage tiers.

Marketo

• Ease of Use: Marketo is known for its robust features but can be complex, often requiring more technical expertise​.
• Features and Functionality: Highly customizable, ideal for B2B marketing with its deep analytics and campaign management tools​.
• Deliverability: Strong deliverability tools tailored for large-scale and complex marketing operations.
• Integration Capabilities: Offers extensive integration options, though sometimes requiring custom setups for advanced features​.
• Reporting and Analytics: Provides comprehensive analytics and customization options for reporting​.
• Pricing: Marketo is on the higher end of the pricing spectrum, suitable for larger businesses or those needing extensive marketing automation capabilities​​.

Salesforce Marketing Cloud

• Ease of Use: It requires a significant level of technical knowledge and support, making it less user-friendly for those without IT resources​​.
• Features and Functionality: Offers extensive features for personalized marketing across multiple channels, including advanced automation and audience segmentation capabilities​​.
• Deliverability: Known for robust deliverability options that support large-scale operations​.
• Integration Capabilities: Strong integration within the Salesforce ecosystem and with external applications​.
• Reporting and Analytics: Advanced analytics capabilities, though may require additional configuration and cost​.
• Pricing: Generally more expensive, with costs increasing with additional features and integrations​.

Eloqua

• Ease of Use: Similar to Salesforce Marketing Cloud, Eloqua can be complex and might require a steeper learning curve and more technical resources.
• Features and Functionality: Strong in advanced marketing automation, personalization, and targeted messaging, making it ideal for large enterprises​.
• Deliverability: High-quality deliverability tools designed to handle complex and large volume campaigns effectively​​.
• Integration Capabilities: Comprehensive, though sometimes necessitating custom integrations​.
• Reporting and Analytics: Offers detailed analytics and lead scoring features that cater to nuanced marketing strategies​.
• Pricing: Eloqua is generally considered an enterprise solution with pricing reflecting its extensive capabilities​​.

How much is an Email Service Provider?

Here’s a quick overview on pricing for each of the ESPs listed in the comparative analysis. Keep in mind that for the most accurate and detailed pricing, direct contact with the sales teams of these companies is recommended.

​​Mailchimp

• Free Plan: Available with limits on contacts and emails per month.
• Paid Plans: Starting at $69 per month for 5,000 contacts and 50,000 email sends per month. Prices increase incrementally based on the number of contacts​.

HubSpot

• Free Plan: Offers basic features with unlimited contacts but limited email sends.
• Paid Plans: The Starter plan begins at $96 per month for 5,000 contacts, allowing up to 25,000 email sends per month. Pricing increases with more contacts and features​.

Marketo

• Pricing: Marketo's pricing is generally not disclosed upfront and requires contacting sales. However, it is known for being on the higher end, reflecting its comprehensive feature set and focus on larger businesses or those with complex automation needs​​.

Salesforce Marketing Cloud

• Paid Plans: Starts at $1,000 per month with a setup fee of $1,000. This basic plan allows for up to 2.5k contacts. Higher tiers and additional features can significantly increase the cost​​.

Eloqua

• Pricing: Similar to Marketo, Eloqua typically tailors pricing based on specific business needs and scale, so direct sales contact is necessary for precise figures. It is generally considered a premium solution suited for large enterprises​​.

Common Challenges and Solutions

Although having an ESP will undeniably make your life as a marketer easier, challenges can arise that hinder your ability to make the most of your platform. To help guide you through this process, here’s a list of common challenges and solutions of ESPs:

Email Builder Limitations

Building emails in ESPs is difficult, time-consuming, and requires extensive knowledge of HTML coding. In addition, the provided templates can be limited in both number and quality.

Solution: Select an ESP that allows deeper customization or provides a robust set of editable templates. In addition, you can use third-party tools like Knak to design your emails and import them into the ESP.

Deliverability Issues

Sometimes emails end up in spam folders or don't reach recipients at all due to poor sender reputation or not adhering to ISP policies.

Solution: Regularly clean your email lists, segment your audience to target emails better, and follow best practices for email content and formatting to avoid spam filters.

Integration Difficulties

Integrating ESPs with other tools and systems (like CRM software) can be complex and sometimes leads to data synchronization issues.

Solution: Choose an ESP that offers native integrations with your existing tools or has a robust API. Conduct thorough testing during the integration phase to ensure data flows correctly between systems.

Scalability Limits

Some ESPs may not handle scaling up well, which can be a problem as a business grows and its mailing list expands.

Solution: When choosing an ESP, consider your long-term needs and evaluate whether the platform can handle a large increase in email volume and list size without performance degradation.

Streamlining your Campaign Creation Process

Using an ESP to improve your email marketing process is just the first step in achieving true efficiency.

One of the most time consuming tasks in email marketing is building the emails themselves. As mentioned earlier, most ESPs' email builders are limited and require tremendous amounts of HTML coding experience.

Due to this, many marketers regularly spend countless hours wrangling with HTML code. Even when it's done, it doesn't end there. You need to approve, test, edit, and of course confer with the long line of people who want "just one more small thing" changed.

Our platform eliminates all of these problems in one fell sweep. We've got the best drag and drop builder on the market. We've got AI integrations for content generation and translations. Built in optimize tabs. Unmatched dynamic content capabilities. Collaborative features where you can assign tasks, add notes, and check your work in real time.

What don't we have? Code. Knak is a 100% no code platform. Using Knak, you'll never have to think about coding an email ever again. Learn more about what Knak can do for you and your organization.

ESP Terms and Definitions

Just in case you need it, here's a glossary and definitions bank of practically every term related to email service providers. May it serve you well!

Email Service Provider (ESP): A company that offers services to send bulk emails to customers and manage email marketing campaigns.

SMTP (Simple Mail Transfer Protocol): A protocol for sending email messages between servers. Most email systems that send mail over the Internet use SMTP to send messages from one server to another.

API (Application Programming Interface): A set of functions and procedures allowing the creation of applications that access features or data of an operating system, application, or other service.

Automation: The use of software to create automatic email marketing campaigns based on pre-defined criteria and user behavior.

Segmentation: Dividing an email list into smaller groups based on specific criteria, such as demographics, purchase history, or engagement level.

Personalization: Customizing email content based on the recipient’s information, behavior, and preferences to make the communication more relevant.

A/B Testing (Split Testing): The process of comparing two versions of an email (or other marketing asset) to see which one performs better.

Deliverability: The ability of an email to reach the recipient’s inbox without being blocked or filtered into the spam folder.

Open Rate: The percentage of recipients who open a specific email out of the total number of recipients.

Click-Through Rate (CTR): The percentage of recipients who click on one or more links contained in an email.

Conversion Rate: The percentage of email recipients who complete a desired action (e.g., making a purchase, signing up for a newsletter) after clicking through from an email.

Bounce Rate: The percentage of emails that could not be delivered to the recipient's inbox and were returned to the sender. There are two types of bounces: hard bounces (permanent delivery failures) and soft bounces (temporary delivery issues).

Spam: Unsolicited and often irrelevant or inappropriate email messages sent to a large number of recipients.

Sender Reputation: A score that an Internet Service Provider (ISP) assigns to an organization that sends email, based on the quality and frequency of its email sending practices.

CAN-SPAM Act: A law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to stop receiving emails, and spells out tough penalties for violations.

GDPR (General Data Protection Regulation): A regulation in EU law on data protection and privacy for individuals within the European Union and the European Economic Area.

Template Builder: A tool provided by ESPs that allows users to create email designs without coding, often featuring drag-and-drop functionality.

Responsive Design: An approach to email design that ensures emails look good and function well on various devices and screen sizes.

List Hygiene: The process of maintaining a clean and updated email list by removing invalid, inactive, or unengaged email addresses.

Double Opt-In: A subscription process where a user must confirm their email address and consent to receive emails by clicking a link in a confirmation email.

DKIM (DomainKeys Identified Mail): An email authentication method designed to detect forged sender addresses in emails.

DMARC (Domain-based Message Authentication, Reporting, and Conformance): An email validation system designed to protect your email domain from being used for email spoofing.

IP Warming: The process of gradually increasing the volume of mail sent with a dedicated IP address according to a predetermined schedule to establish a reputation with ISPs.

ESP Dashboard: The interface where users can manage their email campaigns, view analytics, and access various features and tools offered by the ESP.

Triggered Email: An automated email sent based on specific actions taken by a user, such as making a purchase or abandoning a shopping cart.

Transactional Email: A type of automated email sent to an individual to facilitate a transaction or provide information about an ongoing transaction, such as order confirmations or password resets.

Suppression List: A list of email addresses that should not receive email communications, often used to comply with unsubscribe requests and avoid sending to non-engaged users.

Email Header: The section of an email containing metadata such as the sender’s information, recipient’s information, subject line, and routing information.

Footer: The bottom section of an email, typically containing the sender’s contact information, unsubscribe links, and legal disclaimers.

Hard Bounce: An email that has been permanently rejected because the email address is invalid or does not exist.

Soft Bounce: An email that is temporarily undeliverable, often due to a full inbox or a problem with the recipient’s server.

Preheader Text: The snippet of text that follows the subject line when an email is viewed in the inbox, providing a preview of the email content.

Opt-In: The process by which an individual gives explicit permission to receive emails from a sender.

Opt-Out: The process by which an individual unsubscribes or removes themselves from an email list.

Multivariate Testing: Testing multiple variables within an email simultaneously to determine the best combination of elements for optimal performance.