If you run a brick-and-mortar business, what does email marketing mean to you? Do you even google “how to increase your conversion rates” or “email marketing automation”? Or “101 steps to effective copywriting”? What about GDPR?
Chances are you would be too busy running your daily operations to be learning how to be an effective marketer who sells to other Internet Marketers (let’s face it – most online courses are targeted at other marketers, not people with real businesses) or becoming an SEO expert (which has about the same meaning as being a stock trader). You have a healthy running business that has been around for years, and you are going to make sure that you stay in business for even more years. Sure, you have brought your business online, and started emailing your customers, but your biggest sales channel is still referrals. So what does email marketing mean to you then?
Many years back when I was working with a client who has a 14-year computer hardware business and wanted to start engaging his customers through email but he didn’t know what to say in his email! The most obvious type of campaign is to send your customers promotions and discounts you offer in your physical store. So we helped him find the right email marketing solution and tried to migrate his list over.
Here comes the problem – his list had over 100,000 email addresses. To just park all that in some of the more well-known solutions out there would cost him 1000s of dollars. And how many promotions and discounts could you give in a year? Black Friday? Chinese 7-7, 8-8, 9-9, 10-10?
Even if we could send out a campaign every month, would that justify his investment? I would be lying to him if I said we could. Does he even want to pursue that kind of aggressive marketing? That also means that he would have to hire at least a part-time marketer to manage these campaigns for him.
The thing was, without email marketing, this guy would probably still do very well with his business because he has built very good relationships with his customers and he gets lots of referrals from that. What email could do for his business is probably incremental. Won’t hurt but doesn’t move the needle too much as well.
So he decided to go ahead and set up an email pipeline, but he could not afford the traditional providers. All he needed was to:
- Migrate his old customer’s email addresses and send out 1-2 campaigns in a year. That means sending about 200-300k emails per year.
- Collect new customers’ email at the point of sales and enter them into the system. This means about 1-2 signups on a slow day but 20-30 on peak days.
Paying $2,000 per month just doesn’t cut it.
So I looked out for those out of the box PHP software which you can deploy on a LAMP server to start his email marketing journey. Here comes another problem – he had to purchase another server as his web hosting is a managed server which doesn’t allow you to deploy MySQL database.
In the end, I offered to host the solution for him. I opened an AWS account and launched the smallest instance (it was the t1 generation back then), installed the LAMP stack, the email sending software, verify the email and domain through SES, migrate his list, and started crafting the 1st email. Another SaaS business was born!
That went well for a while until I realise that I had to absorb the server costs for him. You see, for a small business owner who sends out 1-2 campaigns a year, it would not make sense to be paying $2,000 a month to just have his 100k subscriber list stored on the database, and it certainly won’t make any more sense to be compelled to be sending 2 emails a week just to “get the most value” out of those ridiculous monthly plans. The best cost model for him would be to pay for each email he actually sent.
Initially he paid only when he wants to send out a campaign, and I billed him based on the number of emails he actually sent out in the campaign. After a while, I started to think about how to convert this into a SaaS business, and the answer was to become yet another email marketing tool…but with a pricing model that makes sense for the small business owner.
Hence I started to build a new platform from scratch – the PHP software was suitable for a single-tenant environment and it did not have a good email editor (“copy and paste your HTML”). That was how Segmail came to be and the rest is history.
So our Segmail pricing philosophy has been “pay for what you send, not storage“. The only thing is we also needed a monthly revenue model in order to pay for our servers at the same time, hence a subscription model but with new email credits every month, accumulating up to a certain limit. This brings the cost down for both us and our customer – the brick-and-mortar business owner who needs email marketing and and sensible pricing model.
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