Email Marketing Options: Hosted vs. On-Premise
Do you look forward to receiving and reading any e-newsletters or other “mass” emails? I have a few e-newsletters that I enjoy, particularly those that provide me with tips on how to get more out of the products and services that I’ve already purchased. As a result, I’ve become more loyal to these companies, and usually end up buying more products and services from them.
When it’s done right, email marketing can be a boon to both sender and recipient. For recipients, email marketing enables them to receive information that is:
- Timely, since they don’t have to wait for hard-copy materials to be developed and distributed to them.
- Customized for them. Email content can easily and inexpensively be customized to recipients, as compared to “hard copy” communication vehicles where it’s much more cost-effective to produce large quantities of the same thing.
- Linkable to other online resources and information.
For companies, email marketing is an effective yet inexpensive way to increase loyalty amongst existing customers, and to develop awareness with prospects. Email marketing also provides immediate customer feedback that cannot be obtained by any other means short of a survey. Within seconds, email marketers know the number of sent emails that were opened, the number of times that readers clicked on specific links within the emails, and with certain applications and services even who clicked on what link. This feedback enables marketers to fine-tune the information that they communicate to their audience so that they can better serve that audience in the future.
Companies have two options to consider when looking at email marketing solutions: hosted and on-premise. The former hosts the email marketing software application and your data on somebody else’s server that you access over the internet. The latter requires you to purchase, install and maintain the email marketing software on a server that is generally located at your business.
A hosted solution has several advantages over the on-premise solution. First, the startup efforts and costs are minimal. Hosted solutions such as Constant Contact offer solutions for as low as $15 per month, and the software is already “installed” by the hosting company. Second, the hosting company maintains and updates both the software and the hardware, including the email server. These services also offer templates for many kinds of email communications (newsletters, announcements, etc.).
On-premise email marketing solutions, such as Campaign Enterprise by Arial Software, offer their own set of benefits relative to hosted solutions. The primary benefits are control over your own data (because the data resides on your server), customization capabilities, and ease of integration with your internal database(s). On-premise solutions can even directly access and utilize your internal databases so that you don’t have to worry about synchronizing different databases. And, because the software integrates with the database that you use internally (SQL, Oracle, etc.), you also have access to all of the querying and reporting tools that are available within your particular database.
On-premise solutions also enable you to perform all kinds of functions based on triggers within your internal database, including data generated by other applications like customer relationship management (CRM) applications. For example, you might want to generate follow-up emails based on a combination of contact criteria (e.g., the contact is a “decision maker”) and how they’ve responded to a previous email that you’ve sent (e.g., they’ve clicked on the link to read a specific article related to one of the products that you sell).
On-premise solutions potentially offer you a better chance of getting through spam filters than low-cost hosted solutions provided you are a responsible, permission-based email marketer (meaning: you have permission to send email to your audience). This is because in a hosted environment, you are sharing an email marketing server with numerous other companies, including potential spammers. Certain spam filtering services identify spammers at the email marketing server level (as detailed in an earlier post), so if you are using an email marketing server that is being used by a spammer, email sent by you via that server will also be identified as spam.
Finally, once you’ve paid for the on-premise software and any services required to implement it, you’re not stuck with any ongoing subscription costs nor any costs related to the number of emails that you generate.
The big disadvantage of the on-premise solution is that you need to provide and maintain the hardware server(s) where the email server software and email marketing application reside, although this control can provide the benefits mentioned above. If you do choose the on-premise option, you must make sure to prevent your email server from being identified as a spam generator by following permission-based email marketing practices at all times.
There are some hosted solutions – such as EmailLabs, ExactTarget and Real Magnet – that offer the some of the advantages of hosted solutions (including the setup and maintenance of the software/hardware) while also providing some of the benefits of the on-premise solutions such as customization and integration with company databases. They also provide other complementary tools such as survey and integrated fax applications, as well as professional services to help you plan, implement and maintain your solutions. All of this comes at a cost, however, as these solutions usually cost several thousand dollars to implement and several hundred dollars per month in service fees. On the other hand, the higher cost of these solutions filters out the spammers who tend to flock to the lower cost hosted solutions and cause problems for legitimate email marketers who share the same hosted email servers.