Some clients of mine left mailchimp for this very reason (and because the web style editor wasn't great, but mostly pricing).
You start on a free plan, and get 2000 users, you hit that limit, and are considering moving up, then realise that their lowest plan is actually below the number of users on the free plan - you have to go up to the 5th plan to actually get over 2000 users again. The limits are pretty low and the costs mount steeply, but the worst thing was not having a clear first step up from the free plan.
This is crazy. The first impression is "oh shit I have so many option" but in the end, seriously, how do we keep track of the pricing? Is the average worthy? Is this really that cheap? I like their service but this is crazily complicated. Whoever did the pricing must have some innovation in marketing - this is like calculating EC2 cost (it's getting better but still hard).
Yeah, Mailchimp can get crazy expensive as you scale up. One nice thing I found is that you also get a substantial amount of credits in Mandrill as you keep upgrading plans in Mailchimp.
Sendgrid, they have a far more sensible pricing structure based on no. of emails sent, which doesn't get expensive till you're truly at a larger scale. Sending 2000 mails a month should not cost $30 in my opinion. There are plenty of options though.
But they are a bit different. MailChimp is about marketing emails, that's why 2000 - it's the number of subscribers, not emails. On paying accounts they have no limit to the number of emails sent. SendGrid gravitate more to transactional emails, and they limit number of emails sent per month. So choosing between them isn't that trivial.
Unless you have a tiny number of subscribers, I think someone charging by emails sent is better value, but even without that, the step between 2000 on a list free, and 500 on a list paid for, seems somewhat bizarre, they should eliminate that.
Not tiny number of subscribers but large emails/subscribers ratio. If you have 1000 subscribers and some daily news, you'll end up with much less price at MailChimp than SendGrid.
And main thing about step from free account is unlimited number of emails vs 12000 limit.
In the end, it's just a matter of thinking and finding the best tool for your specific situation.
This could barely be closer to our exact use-case, so I'm glad you used it as an example - nice to have the decision seconded! We ran for almost a month on the free plan, but were just about to exceed the 'total number of emails sent' limit, so upgraded. MailChimp's pricing automatically adjusts to the appropriate band depending on your current number of subscribers, so although the pricing is convoluted, I don't really need to worry about it. Even for a small business, £30/month (~ 5,000 subscribers) is very little, and for the peace of mind that comes with a solid offering such as MailChimp, it's well worth it.
I'm sounding like a shill, but I'm really not - just a very happy customer at the moment.
Sounds like the trade-off depends on the frequency of sending. We have ~ 700-1,500 subscribers (still in flux due to recent migration) but send to them ~ 20 times a month. Mailchimp's 'unlimited sends' plans are a big plus for us, although I DO admit their pricing is a little 'idiosyncratic' to say the least (what's up with the really narrow bands every one in a while?)
1. Mailchimp is targeted (and priced for) the small business. Most small businesses aren't going to have lists more than a few thousand, which means most of Mailchimp's customers are going to be paying less than 50ish bucks a month.
2. If you've got thousands and thousands of emails to send, and are paying multiple thousands of dollars to mailchimp each month, you're probably just going to use mandrill and hire a dev to help you out there.
3. For those customers that are spending larger amounrd (500-1000 bucks a month?), they're going to marketing managers at midsize businesses who would never get IT love and can easily justify the purchase against conversions to sales.
4. Lastly, most people who use mailchimp send more than 1 email a month, therefore, most of the commentary surrounding the pricing divided by one send a month isn't really accurate.
We left mailchimp after trying them out, and didn't miss any of these points, they're all quite obvious if you have priced out email.
1. Small startups definitely will
2. If you've got thousands of emails to send, you can send them for $10 with competitors
3. For customers spending a larger amount, again they could be spending a lot less with competitors, email is not expensive, particularly in bulk.
4. If you're sending a few emails a month, that's not going to affect many of the calculations. Sure daily emails would affect these calculations, but that is very unusual for small businesses in my experience - around 1 or 2 a month is the norm for many, or customers get annoyed.
I'm sure Mailchimp will suit some customers with no tech team, small subscriber list, or daily emails to send, but they should sort out their pricing scheme - they are far too fine-grained, far too high at the top end, and with too big from free to the lowest level IMO.
For your second point, again, I think the point of MailChimp pricing is you may have thousands of emails to send, but you won't be sending to thousands of email addresses. This makes most of their customers start on the free plan, then graduate to something that's not a huge cost.
Simplicity and familiarity are the bread and butter for most of these customers. They're not marketing to tech people. They're marketing to the flower shop on the corner who has a list of 1,500 people and ads 2 email addresses a week.
So, I think maybe we're in violent agreement here :)?
Lastly - the key thing about MailChimp pricing is that you move up and down on their pricing plans automatically. It's unbelievably low friction. Most of the time when you move up or down, it's because you've just imported new people and have a new email to send. So you don't care. You just get on with it and then forget about it later.
I don't even know why I'm carrying so much water for MailChimp, other than I think people are missing the point of what and who they target.
So, I think maybe we're in violent agreement here :)?
I think so yes :)
I suppose it comes down to which businesses you have worked with. I haven't encountered many businesses which have very few customers/prospects and send loads of mail, but there definitely will be some, which would be a better fit for mailchimp (like a florist as you say). For those who have lots of users, it's not such a good choice.
Sorry for the shameless plug: I have been developing my own email marketing platform, primarily because I felt that the editor to create emails of some large providers was not easy enough for many people to use.
I haven't posted it to HN before, and so far have only shown it to friends and clients. Please sign up (free trial) and see what you think?
Their main pricing page, http://mailchimp.com/pricing/, is much better from a marketing and sales standpoint. I'm surprised they even provide a link to the "all" page since it probably doesn't apply to 99% of their potential customers.
If an infinite number of monkeys type on an infinite number of keyboards, eventually one of them will write an infinitely scrolling, infinitely minute & obtuse pricing list.
Pardon the snark; This week I have to move a client off of MC because their WYSIWYG style editor is practically useless. Anyone with a recommended service?
That's the number of subscribers, number of emails you can send is unlimited. But regardless, this is a pretty stupid way to list out your pricing scheme.
I think I would much rather roll out my own solution using Mailgun/Amazon's API with a basic RoR/Golang prototype than use these shady monkeys.
It's their business and they have every right to price it the way they see it fit, but when there's something deceptive going on, as an end user I think I have every reason to point it out.
For example, when you start with a free plan and you decide to upgrade to a paid plan, you actually need to go about 5 levels to actually get over 2000 users! And it's not pretty cheap either. I mean $100k to send just emails? (Keep scrolling down)
I once used them when Feedburner bailed out on us, only to never look back at these monkeys (that's their trademarked mascot) and I rolled out my own basic solution on my VPS in just good old PHP (with Wordpress) and it worked well. And I definitely didn't spend $5 for 50 emails, just $20 for my basic Linode.
If you're capable of banging out basic RoR/Golang prototypes which can be used by non-technical email marketers, this skill alone can get you $20k+ engagements to build them with a bit of company-specific secret sauce in them. The sauce doesn't have to be that complicated at all -- for example, "I wish there was a way to send people an email on day N of their trial if their account had less than X objects in it... and I want N, X, and the object type to be editable without having to talk to Engineering" justifies $X0k at a lot of places.
(That's sort of software-firm specific because that's who I typically sold that to. Let's see, what's a more prosaic option. Oh, OK: consider a small insurance company in Kansas which collects a meagre $20 million in premium income per year. There exists a non-technical marketing manager within that company who wishes that there was a way to email business customers a solicitation in December to pre-pay their premiums for the following year to book a current-year expense for tax purposes. She calculates that getting an extra 6 months of float on 20% of their $12 million in business policies is worth approximately $100,000. Can you imagine what you could sell her for $40,000?)
In related news: businesses pay serious money for things which make them money. Consider adapting one's behavior to optimize for this. You can use the resulting money to buy lots of fun things, including stupefyingly large amounts of MailChimp credits if that floats your boat.
I've been following your advice and newsletters, and I get great value from them.
However, one thing that I still haven't figured out is this: how would I find say, that small insurance company in Kansas who has $100k to spend on a solution I could offer to their problem? Where would I begin to look? Cold-contacting seems unscalable.
I know networking goes a long way toward such contacts, but it can't be just that. Is there a way to search for clients that's between cold-calling and a personal network contact?
Go to the local Chamber of Commerce, or other watering holes for businesses, and say you're going to teach a free lecture on business use of email at the VFW hall, with reception to follow. The hall rents out for ~$20. Buy donuts and Starbucks coffee for the reception.
Talk for an hour on how to solve business problems with email. After the hour is over, you're going to be mobbed with people who want to pick your brains about email. At that point you just continue teaching them things until you win the engagement.
This built Brennan Dunn's business (to a ~7 figures consultancy with 10ish FTEs if I recall correctly), in a very not-generally-associated-with-great -Rails-sales-environment part of the country. It was also, broadly speaking, a major portion of my lead generation when I was consulting. (I sold consulting services primarily to B2B software companies, so speaking at events likely to be attended by them was generally a win.)
n.b. "I follow your newsletters and get great value from them" a) Thanks, that really makes me happy and b) this points the way towards another option for you, since if the small insurance company in Kansas was saying that about your newsletter then you're pretty much made for pipeline.
Also, with regards to cold-calling: I've never done it, partly because it would give me stress hives and partly because I've never needed to do it, but I disagree that it is necessarily unscalable. After all, if you're selling $40k engagements, then adding ~10 qualified leads to the pipeline every month would easily sustain a small consultancy. That's not all that much calling. As your consultancy grows you tend to collect recurring engagements / referrals organically, but if you absolutely positively have to make e.g. $2 million this year to cover all employee salaries, that's still only one engagement a week, and if you're counting in the millions you have throw-money-at-this-problem options to being tired of all the talking on the phone.
* As Patrick mentioned, tap into your CoC's network of local businesses and offer to host a presentation. This will help you seed an audience - you'll later want to host your own events.
* Go to your local office supply store and get those folders with business card inserts. Print out your slides, and insert them and your business card into this folder.
* Hand folder out to each attendee, and include a strong call to action: "Want to learn more about how your business can best utilize email? Go to bit.ly/xyz and sign up for my FREE email course."
* Try to get everyone in attendance to opt-in to your course. Reinforce your email course during and after your presentation. (BTW, this is MUCH easier when you're running your own events and have some sort of registration system - you can then just auto opt-in everyone who attended.)
* Over the next month, teach them more about email via autoresponders.
* After your course completes, personally email each attendee and ask them point blank how they're planning on implementing the advice you taught them both at the live event and in the email course in their business. Tell them you want to buy them coffee and listen to their plan + give them some advice (note: this is a FOOLPROOF way of securing that first meeting.)
* The general takeaway from this meeting should be, "Wow! I now a LOT more about email marketing thanks to this guy. But hey, I'm busy running my business, and it's obvious this guy knows what he's doing, I trust him, and he's already delivered me an overwhelming amount of value."
As usual, a very useful and thought-out reply. Thanks for taking the time.
As soon as I get over the typical impostor syndrome and realize I have a lot to share in a newsletter, I'll follow your advice :) 'Tis true, "do stuff, tell people" is still the best advice.
One thing I'm still struggling with is how to explain and justify the (otherwise normal but perceived as) high cost of web development to a crowd that's anything but tech savvy. How do you justify your consulting fee? "Everybody charges that" doesn't sit well with me...
Although, I do see a point in making them do the math to figure out how much more they'd make by paying me, but I'm bearish on how many small business owners would actually do so.
I'm no patio11, but I did follow (I think) a similar trajectory. I used my consulting gig to build a nest-egg that I invested in my own startup, which will hit $1.2MM in revenue this year. I wanted to augment his comments with a couple of things that I know worked for me.
> I know networking goes a long way toward such contacts, but it can't be just that.
For me, it was literally "just that". However, understand that "networking" is a vague term. For me, networking was more than just showing up at social events and being nice to everyone, although that certainly counts. For example, I had a reputation for showing up at my clients' offices any time there was cake (birthdays, etc). It became a kind of running joke with everyone, and always got lots of laughs. But I digress.
Networking is the subtle combination of being present and expressing your value to those who are interested. This does not mean shouting your pitch at everyone you meet. Rather, it means listening to what people say, thinking about the challenges they're facing, then offering your advice on how technology could help them.
> One thing I'm still struggling with is how to explain and justify the (otherwise normal but perceived as) high cost of web development to a crowd that's anything but tech savvy. How do you justify your consulting fee? "Everybody charges that" doesn't sit well with me...
Maybe I'm just being narcissistic here, but my very favorite piece of advice for people in the technology field is "stop selling technology". The person you're selling to isn't interested in buying technology. The world is full of companies selling technology, and the buyer you're targeting doesn't understand any of it. The most successful sales pitches I've been a part of (and continue to be part of) are couched entirely in the language that the buyer uses, not the language I use.
Take a second and internalize that.
The small business owner doesn't have the time to become an expert in technology. They might even think that they do. For example, I would occasionally have a customer ask me what technology we used to build our websites. Some customers would ask about specific technologies: "Do you use 'pee-aych-pee'?" I would always deflect those questions tactfully by explaining that the technology that drives a website are nuts-and-bolts, which we can figure out once we really understand the problem the customer needs to solve. I would say something like:
"As a geek, I'd love to talk to you about PHP, Ruby, and ASP.NET, but I think that might be getting ahead of ourselves. I like to approach technology problems from the other direction. All of those technologies are great, but they're a means to an end, not an end in themselves. Let's talk about what problems you need to solve, then figure out what technology fits best."
If the client doesn't light up when you say that, then you're probably talking to the wrong client. It's very difficult to work with pseudo-experts. They end up meddling too much in the technology side of the work.
Back to the bigger picture, I don't think you're "thinking too small", although you might be thinking of this from the wrong direction. The best way to convince people to do business with you is to sound like them. Use their language. Put a lot of effort in to understanding them (their role, their challenges, etc). Resist the urge to jump right in to technology. A deep understanding of clients' problems will save you, even when/if you make a bad technology decision. If you do these things, you'll never have to justify your price. That doesn't mean that everyone will want to do business with you, but it acts as a natural selector for the types of clients you want to do business with.
The second point here is well-articulated. You don't have to "justify the high cost of web development." This is because you shouldn't be selling "web development."
You are selling a way for them to invoice their clients without Susie printing out 4 different Excel workbooks and walking them over to Accounting. You are selling a way for them to find customers that's more reliable than placing an ad in the yellow pages. You are selling a way for them to find which customers to upsell without Jeff the intern going into the basement and sorting through 5000 file folders.
And so on. Solve business problems, preferably ones that are pain points, and that have dollar signs attached. These are the key.
This kind of post reminds me why I'm still in this community. Thank you for sharing your experience.
True, feelings sell best, business goals second to that. I guess it all comes down to having the leeway to 'fire' the wrong clients.
Sidenote: I noticed your blog mentions Vero Beach, FL. I'll be in the Palm Beach area in February, it'd be great to meet someone else in the SoFL startup scene!
Adyus, yes there is such a method that is scalable. I've implemented it for my business and for clients of mine. It's called Automated Email, and I lay out the step-by-step process for a basic campaign @ http://42insights.com/automated-email/.
Essentially, you identify the types of clients you work best with, create a process for finding them online, finding the right contact people at the company, finding their contact information, then reach out to them via email. It's scalable because you can hire someone on oDesk to follow the process you create. All you have to do then is set up a call with the incoming leads. Happy to answer any questions you have.
I use Campaign Monitor much more than Mailchimp - and whenever I can, I always try to be on-hand when a client sends out at least one of their early/important mailouts, and I direct them to Campaign Monitors real-time map view of opens. You can see their eyes light up (and sometimes their heads explode) as they get a continuously updated view of people's names popping up in a map showing they've just opened the email - and even better when they're clicking on the links. If I possibly can, I try to be on-site so I csn open up one browser window with that Campaign Monitor view, and another with Google Analytics realtime report.
For me - that's usually one of the biggest "Oh, now I get it!" moments I can hand-feed to clients…
Until Amazon stop being US region-only for SES, it's a non-starter for mass emailing; we moved off it when ~ 4,000 sends was taking 2-3 hours nightly, and the flaky Joomla extension sending the mail would bail out halfway through, leaving me to pick up the pieces and resend. Still use SES for transactional stuff, though.
I don't understand why people refuse to pay marginal (<$100/mo) amounts for SaaS services. Look at the miserable, billable time going towards solving a problem that's already been solved by many.
Thanks for the info. We haven't hit near that number yet, we mainly use it for the autoresponder stuff and some simple mailings to a few hundered addresses.
Amazon SES is cheaper, but still pretty expensive at the volume where you'd be paying Mailchimp six figures. Sure, $100k to send emails is a lot, but that's the tier with 300 million emails per month! If you moved that to Amazon, it'd still cost you $30k (Amazon is $0.10 per thousand emails).
Either that or just expose the formula for calculating cost.
The plans are too exact to really be "plans". Is anyone thinking "I have exactly 52000 users right now"? I feel like bigger brackets or a sliding scale would be more appropriate.
MailChimp are just spam enablers. The vast majority of e-mail I get from them is to e-mail addresses that definitely never ever signed up for anything. They claim they use double opt in, but that's just a damn dirty lie.
Furthermore, they are past masters at helping their spammers craft their spam to defeat SpamAssassin and baysian filters, so the spam that actually makes it to my inbox is disproportionately from them. It's got so bad that I've got special mail server rules that focus on just them.
If you saw it from the other end, in the eyes of a legitimate customer, you'd realise how laughable that is. MailChimp discourages spam to the extent that it's actually difficult to send email to your own customers! I can assure you that they use double opt-in, unless a customer has imported a list which they are trusted to only do legitimately. FWIW, I cannot remember having ever received any spam from MailChimp.
I second this. It's almost like they discourage me from sending any email at all. Even when I need to send an important security announcement to my customers I still get chills.
I honestly think they use legitimate customers as cover for their spam operation. I'm seeing dozens of e-mails a week from them to addresses that were plainly stolen from LinkedIn during their recent break-in.
Double opt-in exists...but their API, rightfully, allows for some rule bending. Mailchimp trusts at least one of its integrations to confirm the subscription.
One thing that is hugely bothersome is that it's not possible for us to collect email lists at conventions and send to then through mailchimp. Bad handwriting and/or fake email addresses resulted in a warning from mailchimp about a 22% bounce rate from a list we collected by hand.
I'm not impressed with the mailchimp WYSIWYG either. It's buggy with their templates and the plaintext is always absurd.
My thoughts at first until I clicked and scrolled down... and down... and down... until I realized how insane it is to spend $100k on sending out emails.
- Does the price sound reasonable?
- Have you tried our service before, if so what do you think of it?
- Does it bother you our infrastructure is hosted in Europe?
If I may add a few things:
1. I think most of the comments here concentrate on price alone. You need to remember that email marketing is a tool. If you have even 2000 subscribers and not making $30 from that list:
a) It's your hobby. No problem. Hobbies sometimes can get expensive.
b) There is something really not right with your list/efforts.
2. All the people outraged at Mailchimp's prices should compare them to the competition and see that most of the companies offer similar pricing.
3. Try explaining successfully to your local restaurant manager how to set up his/her own mail server.
4. After you have successfully explained #3, try explaining all the regulations and SPAM compliance.
5. Finally - Mailchimp is for small and mid-size businesses. Once you go over $1000 in email marketing costs you are in a different ball game.
I started out using mailchimp when I had less than 2000 subscribers. It worked great! But now that my mail list is growing, I find it increasingly expensive. Any recommendations on alternative providers?
Thanks! I actually make use of the RSS to mail feature of Mailchimp (found that service very easy to use). I do have many subscribers with 3~4 mails a week going out to them. Will check out SendGrid.
I run www.markdownmail.io it's very simple with very limited features, emails are composed in markdown and templated with mustache. Everything is sent using your ses account which allows us to keep prices very low.
Any questions drop me a line
antony@markdownmail.io
p.s. you get a 30 day free trial.
Mailjet is "merging" transactional and marketing email services. Transactional via API and on top of our APIs we build web interfaces for marketers to manage contact list, html and stats pages.
We charge per email send, whatever its "origin".
One need to know that managing marketing emails and transactional emails is not the same in daily operations. Marketing emails are send to "lists" and there is an important effort a reliable provider needs to put in place to avoid spammers come on your platform.
Lists need to be double opt-in etc. and a lot of marketeers don't follow these strict rules. The provider (here Mailjet.com or Mailchimp) has to develop and invest in a lot of work to detect 'spammers' before and even during the sending process, interact with its support teams to educate customers, etc.
Their job is to guarantee to ISPs only high quality, opt-in messages are send out. That's the only long term battle a provider needs to fight for.
Mailchimp is ideal for sending a high volume of emails to a small amount of users. I couldn't imagine using them with a large volume of users, it's literally $0.005 per user, imagine if you only need to send a monthly or even weekly email to 1mil+ users, total rape on the per email basis
We have 5000 subscribers, but only send 1 email every month or two. This costs $55. Compare this to someone that has 500 subscribers, and sends each of them 10 emails per month - that only costs $10 per month. It just doesn't add up.
I really really dislike the pricing at an "all-you-can-eat" buffet. I only eat one french fry, yet I get charged £7.99 for it. If someone orders just french fries at McDonalds, they get dozens of fries for £0.99. It just doesn't add up.
I use Mailchimp, but I'm getting to hate it. It's too expensive, their payment options are limited and customer support is slow. That with a lot of minor idiosyncrasies that are starting to fray my nerves.
Migration will no doubt be a hassle, but I'm looking to move to another service (soonish).
You start on a free plan, and get 2000 users, you hit that limit, and are considering moving up, then realise that their lowest plan is actually below the number of users on the free plan - you have to go up to the 5th plan to actually get over 2000 users again. The limits are pretty low and the costs mount steeply, but the worst thing was not having a clear first step up from the free plan.
They also have an insane number of plans.