When it comes to connecting with your customers and driving revenue, email is perhaps your most important digital marketing channel. Add in real-time personalization and your email becomes highly relevant to the recipient and even more impactful. Naturally, the technology you use to facilitate your email marketing strategy — your ESP — is a vital component of your tech stack.
But today’s ESPs aren’t the same as they were 15 years, 10 years, or even one year ago. “Next-gen” ESPs are gaining traction, and the vendor landscape has shifted. What’s causing this shift? What does the future hold for ESPs?
In our recent webinar The Evolution of the ESP: What’s Next For 2022, hosted with Retail Dive, Email Connect founder and president Chris Marriott discussed the trends driving the evolution of ESPs, where ESPs are heading in the coming years, as well as a deep dive into the ways ESPs have evolved… and continue to do so.
Here are three trends that we learned from the webinar that are shaping the ESP evolution.
#1. The Definition of ESP Is Changing
Martech as a whole has become plump with three-letter acronyms — CRM, CDP, DMP, DAM, PIM, MDM… the list goes on. Some of these are table-stakes pieces of technology that most marketers regularly use. Others are less common tools, known only to the most tech-savvy marketers (or those unafraid to ask “what do those letters stand for?”). Yet others imply something leading or cutting edge, but end up obfuscating the true purpose or functionality of the product they describe.
And then you have your ESP — the good ol’ email service provider.
Email is something every marketer relies on to engage customers and drive revenue, so having a great ESP is critical for your email marketing strategy. However, it can be overshadowed by the glitz and glamor of the latest-and-greatest tools in the modern marketer’s stack. Many of the leading legacy vendors have even avoided labeling their product as an ESP, because they’re afraid it limits their appeal to brands who are looking for a platform that can do more than basic promotional email.
The truth is, the modern ESP isn’t basic. When we think about, “What does an ESP do?” the most innovative offerings have redefined that very definition. They include a broader set of capabilities, such as marketing automation, omnichannel journey building, and much more. When vendors dress up what is a next-gen ESP in acronym-ladden clothing, they risk confusing marketers rather than enticing them.
- Key Takeaway: Today’s next-gen ESPs do much more than basic email marketing, as such the definition of ESP is continually evolving to keep up
“Now, brands expect ESPs to include marketing automation, journey building, triggered emails, automated emails. They also expect these ESPs today to be fully multi-channel [and] provide multi-channel orchestration … They expect SMS, MMS, push to app, mobile push, social connections, either native in the platform or [through] deep integrations [with] third-parties that can enable this from the ESP platform itself. Rather than seeing these as separate entities, they’re thinking ‘No, I think an ESP should do all of this.’ And they’re right.”
#2. Next-Gen ESPs Are Gaining a Foothold
The comfort and appeal of working with a well-established legacy vendor is starting to wane among some brand marketers shopping for an ESP.
Part of this is because the differentiation between these vendors’ offering and message is becoming increasingly indistinguishable. It’s also because some vendors — in an effort to appeal to a C-suite decision maker rather than the marketer — are shy about using the term “ESP” to describe their product, which ultimately scares off the actual practitioners who are looking for an ESP that lets them create and deliver the sophisticated email marketing necessary to drive results.
When it comes to ESPs, there’s been a changing of the guard. The newer, up-and-coming next-gen ESPs are becoming bigger players, going toe-to-toe with legacy ESPs. Why? More often, these next-gen ESPs are viewed by brands as more innovative, with more cutting-edge features and functionality, while still having a heavy email focus. No, legacy ESPs aren’t going away, but brands are now inviting a more balanced mix of next-gen ESPs and legacy ESPs into their RFP process.
- Key Takeaway: Next-gen ESP are gaining traction over legacy ESPs because of their innovations, features, and well-defined focus on sophisticated email capabilities.
“What we’re seeing today, again, is that relatively newer next-gen ESPs are more and more being seen — by brands — as leading in innovation and new features and functionality. Not surprising, because we just said they focus on that and the email practitioner. While there’s a growing perception that innovation has stopped at the marketing cloud and MSP [based] ESPs, or it’s going in the wrong direction. They’re focusing on things that don’t get the email practitioner excited. And as a result, they’re all starting to sound and look the same to brands [that are] considering an RFP, or looking around and seeing what else is available to them.”
#3: Generating Customer Loyalty With ESPs
In terms of successful combinations, you could argue that customer loyalty and email are on par with peanut butter and jelly. Both tasty on their own, but put them together and you have something so much more satisfying. It’s a long-established, proven pairing.
However, far too often,customer loyalty and email are thought of less like peanut butter and jelly (yes, I’m undercutting my own metaphor) and more like wine and chalice. The latter helps service the former, but not the other way around.
Loyalty programs have historically relied on email as a channel that was simply a carrier for their marketing efforts. Loyalty and email never truly meshed, and the respective teams were often siloed. Loyalty programs keep their rich data to themselves, while email marketers sit on the other side of the wall, faces pressed against the glass as they peer into that den of zero-party data, wishing they could help themselves to it.
Loyalty benefits your brand for numerous reasons, but when it comes to email, digital marketers see loyalty programs as incredibly valuable because of data. Often, loyalty program databases hold insights-rich zero- and first-party customer data that email marketers can use to create more relevant, meaningful 1:1 engagements for customers. Many leading ESPs see the value of loyalty, and are now working to either acquire or build loyalty capabilities into their platform.
- Key Takeaway: When email marketers are evaluating ESPs, knowing their email could work hand-and-glove with their brand’s current loyalty efforts is a huge selling point. Expect loyalty to be a major piece of the puzzle for the next generation of ESPs.
“More and more, what we’re going to see is, not just a one-way relationship where the loyalty team uses email as a conduit for their messaging, but where the email team goes to the loyalty team and says, ‘Hey, we think you can help us.’ That’s what some of the ESPs have gotten ahead of, and [why they] are tying loyalty into their platforms.”
Enter the Next Generation of Email Marketing
When it comes to reaching more customers, more often, and driving revenue for your brand, email is still king. Advances in the next generation of ESPs are making that process even easier for marketers like you. And if you want to learn more about the next generation of ESPs (including a fourth trend not covered in this post) be sure to watch the full webinar.
Going forward, ask yourself: Is your email marketing platform allowing you to engage customers in a way that delights and surprises them, strengthening their relationship with your brand? Does it allow you to link all your data and channels so that email is part of a complete omnichannel strategy? If not, now is the time to consider which piece of tech can help accelerate the outcomes you desire.
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