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Email Marketing Costs: Finding the Most Affordable Solution

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When thinking about email marketing costs, you might be tempted to think only about the cost of hiring an email marketing specialist.

In essence, running an email marketing campaign involves several different costs. Interestingly, many businesses don’t know that working with an email marketing specialist can help them mitigate or avoid some of these costs.

In this article, we scratch beneath the surface and look at the various costs involved in email marketing and the factors that affect them. We also analyze these costs and provide a guideline to help you find the most affordable solution.

How much does email marketing cost?

Every email marketing campaign requires a software solution, which can cost between $9 and $25 monthly for a basic package or as much as $270 monthly when things like contact lists and email volumes are factored in.

Monthly fees for an email marketing software solution increase with increases in the size of your contact list and the number of emails sent per month.

The package can also vary depending on the level of service you are getting and the number of tools you can utilize.

While some email service providers may charge lower fees, what the package includes may be limited compared to others charging slightly higher.

For instance, while Mailchimp’s basic plan is only $13 monthly, it limits you to only 500 contacts. Compare this to Brevo (formerly Sendinblue), which charges $25 for 20,000 monthly emails sent to unlimited contacts.

So it is essential to consider what your package includes before signing up.

Email Marketing Costs: What Are They?

We already mentioned that email marketing costs are many, and understanding them can help you make better analyses and run your campaigns more cost-effectively.

Here are the email marketing costs you need to know about.

  1. ESP (Email Service Provider/Email Marketing Software) related costs

    An ESP, or Email Service Provider, is a platform or software with the tools and features necessary for sending, managing, and tracking email marketing campaigns.

    The platform typically enables you to create email campaigns, manage your contact lists, segment your lists, automate your emails based on user actions or specific criteria, and track your performance. Your ESP may also offer advanced features like personalization, dynamic content, integration with other tools, and various testing capabilities.

    Examples of popular ESPs include Mailchimp, Constant Contact, Campaign Monitor, SendinBlue, and HubSpot. You’ll need one of these to run an email campaign, whether you have only a handful of subscribers or millions of them.

    Most ESPs have an option for a free trial and can cost anywhere from free to hundreds of dollars monthly. These offerings depend on the tools included in your package, the services offered, such as customer support, and the number of contacts you’re emailing.

    Therefore, the option you choose invariably determines the amount you spend on your campaigns.

  2. Hidden costs

    Some costs are typically hidden in the fine print, and consenting to an ESP contract without reading the details can tie you down to charges that are not obvious upfront.

    While your email marketing software provider may be transparent, failing to get the correct interpretation of certain terms easily throws unanticipated charges your way.

    Here is an example: suppose your email service provider operates on a monthly CPM (Cost per Mille) basis, and you pay a fixed amount; going over the limit could mean extra charges. Some ESPs will apply an overage charge for every email above the monthly quota.

    Some ESPs also label themselves with attractive lower price tags. Yet, these can turn out to be the tip of the iceberg in cases where the quoted figures do not include set-up fees, overage fees, onboarding fees, and more.

    HubSpot, for instance, includes up to $6,000 in onboarding fees for its Enterprise package. This fee might be a bummer if you were attracted to the platform only based on its yearly email marketing service charge.

    Elsewhere, suppose you pay a fixed monthly fee to a platform like Mailchimp that charges based on your email list size; it won’t matter if some people unsubscribe from your emails. You will be paying for unsubscribed contacts regardless. This is a hidden cost that you can mitigate by polishing your email lists frequently.

  3. Campaign related costs

    Now, on to some less obvious hidden costs. Suppose you skip the help of an email consultant and handle your email strategy in-house; you should be aware of the costs of maintaining a dedicated marketing team.

    However, you might not factor in the time and resources spent creating an email. A typical process involves a developer, copywriter, designer, and of course, a marketer. Each of these working back and forth can take several days to finish putting together a campaign.

    In a study, up to 53% of respondents said they typically took over two weeks to produce an email. For a time-conscious business organization, this can be a costly investment.

    This picture explains why most businesses outsource this time-consuming work to an email marketing agency to allow them to focus on other vital areas of the business. ‍

    Hiring a specialist to help here means your marketers do not take time away from their core responsibilities. Otherwise, you’d have to factor in the time and resources they spend working on emails every week to determine its true cost.

  4. Lead nurturing costs

    Lead nurturing is the process and activities around building relationships with people in your contact lists to convert them into buying customers.

    Once you have created customers out of leads, you will also want to undertake measures to maintain a good relationship with them. That’s how you create loyal customers and brand ambassadors.

    This process sometimes involves giving out incentives like price cuts and free giveaways. It can also involve prizes to be won based on some action on your promotional emails.

    Whichever shape these incentives take, there is a cost involved. Naturally, when the customer doesn’t pay for a commodity, the business must shoulder the cost.

  5. Email marketing agency costs

    As we already mentioned at the beginning, the cost of hiring an email marketing agency is what frequently comes to mind when talking about email marketing costs.

    Now you know that they are just a subset of the email marketing costs you should know about.

    You can expect to pay as little as $300 monthly in agency fees for a basic email marketing plan. Since most agencies use a tiered system, this figure can go up with an increase in the contact list size, email volume, or level of service.

    Here’s the catch, though: these agencies typically use their own software service to send emails and sometimes factor that expense into their bill. Whatever the case, this arrangement can significantly cut your overall email marketing expenditure.

What factors affect email marketing costs?

Various factors can cause email marketing costs to vary. Here is a look at the main factors that influence the costs of email marketing.

  • Email Marketing Software (ESP) Pricing

    Since email marketing software is a fundamental requirement for any email marketing campaign, you inevitably pay for it. This way, its pricing is inherent to your overall email marketing spend.

  • Email templates and design

    Most email platforms come with various templates built into the service. You can choose to use these templates free of charge or create a custom one if your strategy requires email designs not present among the templates.

    Usually, a custom email template will cost you extra, depending on its complexity and design requirements.

  • Email list size

    The number of contacts in your email list is a crucial pricing factor in every email marketing software. Generally, the cost of the email service will increase with the increase in the number of contacts in your email list.

    Omnisend, for instance, provides access to all the available features across the various pricing plans. However, they vary their prices based primarily on the number of email recipients and monthly email volumes.

    Many vendors have a similar policy, with a minimum number of contacts often ranging from 500 to 1,000 and various maximums from vendor to vendor. Except for vendors like Brevo that support unlimited contacts, most email service providers will have various caps with various plans corresponding to different price points.

  • Number of emails sent per month (Email volume)

    The email list size and volume often go hand in hand. Vendors with generous policies regarding the number of contacts may restrict the email volume and vice versa.

    A good example is the one we already used, Brevo (formerly Sendinblue), which includes all its key features in every plan, and supports unlimited contacts but restricts the number of emails you can send daily to 300.

    Another similar example is Hubspot, which allows you to add up to 1 million subscribers to your list but limits the number of emails you send to 2000 per month.

    Meanwhile, MailChimp allows for only 2000 email subscribers but supports up to 10,000 emails monthly.

    That being said, if you intend to send only a handful of emails a month, a platform like Brevo that restricts the monthly email volume may suit your needs. You can then take advantage of its unlimited contacts to grow your business list by growing your email list.

    But if you intend to send several emails to a small number of repeat customers, Constant Contact, which supports unlimited email volume, may make more sense.

  • The technology or features included

    If you are a smartphone user, you know that all handsets can place and receive phone calls and send text messages. But it becomes a different ball game when you start comparing things like camera quality, low-light photography, and security features.

    It is the same thing with email marketing solutions. While all ESPs perform some basic functions like designing emails and sending them to a list of subscribers, advanced features can vary significantly from one email marketing software to another.

    While some vendors provide advanced features such as email automation and segmentation across different plans, others reserve such technology for their premium plans.

    So, always check the feature set that comes with your plan before signing up for it. And if you have a limited budget, you may go for limited feature access, but ensure the plan has all the basic features you require for your current strategy.

    Specifically, look for segmentation options, templates, A/B testing, automated workflows, and reporting.

  • Automation tools included for email campaigns

    Workflow automation tools vary, and they can be part of your plan or be charged separately, driving up your budget.

    Common automation tools for nurturing leads include functionalities like A/B testing, customer profiles, optimization of send time, conversion tracking, and more.

    If you buy Brevo’s $25 monthly plan, you get access to the vendor’s automation tools from that price range.

    In contrast, Constant Contact starts off at a much lower price of only about $10 per month, but you must upgrade your plan to a $45 monthly plan to access the platform’s automation tools.

    So before waving a solution as affordable, check what you are getting first.

What makes email marketing worth the investment?

All said, should you invest in email marketing? Is it worth the costs involved?

Like any digital or traditional marketing channel, email marketing will cost money. However, none of these other channels will guarantee a return of $36 for every $1 spent—except email marketing.

So, yes, running email marketing campaigns involve some costs. But if done correctly, the returns can be mind-blowing and worth every investment.

Additionally, the direct and personal nature of email marketing makes it an excellent way to connect with customers and drive conversions.

Email Marketing Costs: Final Verdict

In this article, we have discussed the various costs involved in email marketing, pointing out ESP-related costs, campaign-related costs, lead nurturing costs, hidden costs, and email marketing agency fees as the main groups you should know about.

We have also talked about the various factors likely to influence email marketing costs, including ESP pricing, email design, technology or features included, email volume, list size, and automation tools.

In our subsequent posts, keep an eye out for ways to cut costs by letting an email marketing specialist handle much of the weight of your email marketing campaigns.

Ready to start cutting costs now? Get in touch with an expert and discuss your options free of charge.