Quick to Click
Cost and speed are making e-mail a CRM tool of choice
Because of the swift time-to-market and strong return on investment of e-mail, New York-based e-commerce research firm Jupiter Communications estimates that commercial e-mail spending will grow from $164 million in 1999 to $7.3 billion in 2005. Jupiter’s mid-year 2000 research showed that 65% of companies are spending between 1% and 5% of their marketing budgets on e-mail marketing, with an additional 22% spending in excess of 5%.
Things to Consider
First off, costs have little to do with a company’s size. They are more related to variables such as the size of the mailing list, frequency of mailings, and other services needed in conjunction with e-mail like database manipulation, segmentation, copywriting (will you do it yourself or hire an agency?), HTML creative and list rentals, among others.
Generally, transmission and tracking costs for less than 50,000 names runs from $50-$125 per thousand names, while a list of 250,000 to 1 million is $5-$25 per thousand names, says Jay Schwedelson, corporate vice president of Worldata/WebConnect, a direct/interactive marketing firm in Boca Raton, FL.
There are three basic routes you can go. While you could buy the software and do it yourself, unless you stick with a bare bones product, you’ll also need people on staff to manage and run the operation, increasing your expenses. Sophisticated enterprise packages can start at $100,000. Many companies turn to an application service provider to handle their marketing efforts. Upfront, one-time fees range from $5,000-$15,000, in addition to the transmission and tracking fees.
For that upfront fee you can expect services like importation of the database, error checks, list clean-up and hygiene. Then there are the full service e-mail marketing firms like Lexington, MA-based e-Dialog, which not only tackles the technical aspects, but creative design, copywriting and response management. There’s a fixed per-campaign charge of $1,000-4,000 in addition to transmission and tracking costs. With any of these choices, you’re likely going to need an e-mail manager to oversee the program. Expect to pay a hefty salary for that expertise
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