Recently I was mildly surprised to learn that Email Service Providers (ESPs) such as Vertical Response, Constant Contact, and MailChimp are 10 years old or close to it. There are many others like iContact that are recent additions to the market. And when you examine their respective feature sets you’ll find check-offs for over 50 different features. Clearly, these are sophisticated systems that have been developed and improved over a number of years.
In the SaaS (Software as a Service) business, churn can be defined as the number of customers in any given month who do not continue with a particular service. In their 2007 IPO Prospectus, Constant Contact stated their churn rate as 2.6 percent. This compares favorably with the likes of ISPs and very favorably when compared with Cable companies and Wireless providers. It also reinforces the notion that as a marketing automation vendor you might consider interoperating with ESPs instead of displacing them with your own version of the same, which may or may not be as refined.
To be fair there are some advantages to the monolithic approach. Just ask Apple Mac customers. But even there, Mac’s success has been enhanced by moving toward working with PCs. However, to fit this type, you’d be like the woman in the TV commercial who says, “I always like to pay full price and sometimes, a little more.”
But if you are in the majority (Apple has had a low single-digit market share for decades) you likely agree with the notion that interoperability allows best-of-breed to emerge while maximizing ROI for the user. As importantly, ‘why fix what isn’t broke’ and have to re-train users or face unforeseen technical risks. SMBs are notorious for being value driven and wanting results fast, so a strategy of interoperability both makes sense and allows today’s ESP users to easily evolve into a fully integrated marketing automation solution.
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About Dayna Cosgrove
Danya is a creative professional specializing in web design and development, with experience in marketing, advertising, and graphic design.