What is an Email Service Provider (ESP) and Why Do You Need One?

An email service provider (ESP) is a company that provides email marketing services. More specifically, it is a software company that offers an email marketing platform or tool that enables you to create and send bulk emails to a list of subscribers.

My series, The Financial Advisor’s Guide to Email Marketing, helps financial advisors understand how email marketing works so they can properly use financial email marketing strategies to connect with prospects and gain more clients. In the previous article in this series, I covered email-list building.

Now it is time to dig deep into the tool that allows you to build a list and send email marketing messages effectively.

The purpose of using an ESP, rather than sending from your own email client such as Gmail, Yahoo, or Outlook, is that it helps you create professional designs, manage subscriber lists, evaluate the success of your email marketing campaigns, and stay within legal compliance.

There are hundreds of ESP companies to choose from. For your financial advisory firm, the best option is to select an ESP with a strong reputation for serving small business customers, such as MailChimp or Constant Contact.

Benefits of Using an ESP

Getting started with an ESP can be very inexpensive or even free, so there really aren’t any disadvantages to using one, and there are many benefits, including:

Email Deliverability 

One of the biggest advantages of using an ESP is that it protects your deliverability and more specifically, prevents your domain from being blacklisted. 

If you try to send bulk email from your own email client, the activity is likely to be flagged as suspicious and you will be marked as a spammer. Once you are identified as a spammer, all emails coming from your company’s web domain can be blacklisted and blocked by major internet service providers (ISPs). This means your company’s emails – even the individual messages you send to communicate with clients – can be blocked.

ESPs have servers that send large volumes of email in a way that doesn’t set off spam filters at your subscriber’s ISP. Therefore, you can safely send email marketing campaigns and significantly reduce the likelihood that your emails will get blacklisted. 

Email Regulation Compliance 

Email marketing is regulated through legislation, and it is important that all of your email marketing efforts are in compliance with the CAN-SPAM Act. Your ESP is required to be in compliance with CAN-SPAM and will help you comply as well.

For example, you will need to have proper permission from your subscribers that they have consented to receive email campaigns from you. You’ll need to have proper identifying information such as your company name and street address on every email you send. And you will need to include a way for subscribers to easily opt-out of emails. An ESP makes it easy for you to follow all these rules almost effortlessly.

List Management

Your email marketing list should only consist of people who have consented to receive email marketing messages from you. Ensuring that your list is up-to-date and maintaining list hygiene can be a bigger task than you expect, but most of the heavy lifting is done automatically by an ESP.

An ESP automatically adds subscribers to your list when they sign up through a subscribe form, which itself can be easily added to your website and even your social media profile. Then, if a subscriber wants to be removed from your list, your ESP handles that when they click the “unsubscribe” link in your email. The ESP will also handle “bounced” emails - emails that can’t be delivered because the email address has gone dormant or been closed down. 

Most ESPs offer the ability to segment your list based on subscription source, characteristics or behaviors of subscribers, or campaign activity, such as opens, clicks, or purchases.

Customizable Templates

Effective emails have clean, modern, visually-appealing design. But, as a small business owner with a limited budget, you don’t want to have to hire a graphic designer for each email you send. 

ESPs such as MailChimp and Constant Contact provide built-in professional templates that are easily customizable, allowing you to add your company’s colors, logo, and images with drag-and-drop functionality in a few clicks. Their templates are already mobile responsive, meaning they are just as readable on a subscriber’s phone as they are on a computer monitor. Mobile responsiveness is critical because at least 40% of all emails are opened and read on a mobile device.

Personalization

Even if you are sending a broadcast email to your entire list of subscribers, one of the best ways to connect with your readers is to include elements of personalization. Your ESP will enable you to personalize your emails with the subscriber’s name, which can be included in the greeting, throughout the body of the email, and even in the subject line. 

Some ESPs allow you to include additional personalization beyond the subscriber’s name. For example, if you’ve gathered the information, you can segment your list and personalize the email by mentioning the subscriber’s city, their marital status, age group, or specific financial interests, such as saving for college or saving for a house. 

Automated Email Campaigns & Marketing Funnels

In addition to sending on a broadcast email, your ESP automatically schedule emails to go out at a specific date and time. In many cases, you can even set the ESP to determine when to send an email based on the data it has on the best send times for the highest open rates.

The automation features in your ESP will enable you to set up email sequences to welcome and nurture new subscribers, automatically promote a service or event, and follow up or check in with subscribers automatically. 

An automated email campaign is a coordinated sequence of individual emails that you can send across a set time period with a specific purpose in mind, such as prompting subscribers to sign up for a webinar or schedule a consultation with you. You may also hear this referred to as an email marketing funnel, which refers to using email messages to move web visitors along a journey to become subscribers, prospects, and hopefully clients. 

Tracking & Reporting

Finally, your ESP will provide data about your subscribers and clients that can help you make strategic decisions about your marketing efforts. 

With email tracking and reporting features, you know how many subscribers, and specifically which ones, are opening and clicking on your emails. As I mentioned above, you can even segment the subscribers who click on specific links into various lists that you can then send targeted content related to those specific topics.

The tracking and reporting features in your ESP will let you review your campaign results to determine what’s working and what can be improved. Plus, you’ll be able to determine which subscribers are most likely to be responsive if you reach out to them directly and which subscribers can be removed from your database.

Conclusion

Using an email service provider is essential to any email marketing efforts. The quality of your ESP will affect the email deliverability and its features and functionality will determine which email marketing strategies you are able to use. Some are more feature-rich than others, but the most robust tools can require a steep learning curve while a simpler tool might be best to get the job done. 

Now that you know about ESPs and how they help you be more effective, in my next article I will share some guidelines on building out the basic framework for your emails.

Download a free copy of the Email Marketing Checklist & Template here. 

Sometimes email marketing can seem like an overwhelming task to undertake on your own. This is exactly what we do for our clients! We help craft opt-ins to build their email lists and create captivating email marketing campaigns to engage with their audience in the most effective way possible.  Reach out to us to see how we can help!

About the Author

Crystal Lee Butler, MBA is a creative marketer and results-oriented business consultant with over a decade of experience collaborating with independent advisers. At Crystal Marketing Solutions, she delivers exceptional insights for financial professionals enabling them to create a consistent marketing presence so they can focus on the things that matter most to them.

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