Here at SendGrid, we have built a business based on delivering transactional email for our customers. We deliver over 8 billion emails per month and have sent approximately 120 billion emails over our 4 year history. To date, our focus has been on providing developers with scalable, reliable, and cost effective email solutions that are easy to use. I guess we did a pretty good job living up to these value propositions as many of our developers have come back to us to ask, “Hey, can you guys also help my marketing team create and send marketing email?”
So, for all our developer customers who asked that question (and even those who didn’t), the answer is YES! But, we must admit, bringing this product to market didn’t happen overnight. We took our time—we met with our developer customers (and their marketing counterparts) to discuss their needs. We also carefully evaluated the email marketing space to determine if it even made sense for us to enter.
Throughout this effort, one of the key pain points that we uncovered was that marketers have grown tired of the subscriber-based pricing models employed by the leading email service providers (ESPs). This subscriber-based model charges customers a monthly fee based on the size of their subscriber list. For example, if you have a list of 30,000 subscribers to whom you send email on a regular basis, you are charged based on the size of this list regardless of the number of emails you send per month. While this model works well for daily deal sites that email their subscribers on a daily basis, it doesn’t work for the average marketer who sends to their list less than 4 times a month. As a result, the average marketer has been forced to pay for email volume capacity that they are not using.
To help better articulate this example, see the following analysis below:
- Customer List Size: 30,000
- Monthly Emails Sent to List: 4 (1x per week)
- Email Volume Sent: 120,000 emails
- Typical ESP Subscriber List Pricing: $240 /Month
- SendGrid Volume Pricing: $131.95
In this case, a marketer can save approximately $108 per month! And note that the price delta between the SendGrid volume-based approach and the ESP subscriber list approach gets larger as the volume grows—providing you with even more savings!
At SendGrid, we are confident our marketing customers will see this is a more open and transparent way to price an email service. So, if you are thinking about evaluating an email marketing service we encourage you to check us out…and to think about all the other marketing activities you can invest in with the money that you’ll save!