The value of using an Email Service Provider (ESP) for end customer communications

In the world of pervasive consumer chat and messaging applications, email has retained its place as a ubiquitous channel for end customer communications. The Radicati Group reports that email usage will continue to grow from an estimate of 3.9 billion users in 2019 to 4.4 billion in 2023.¹ Email is a welcome (and preferred) conduit for many consumers to stay connected to their favorite brands.² Marketers and developers have found that email has the highest ROI of any end customer communications channel because of its low barrier to entry, affordability and ability to target specific recipients.

However, the very strength of email may also be its biggest weakness. The ubiquity of email as a communication channel means that many consumer mailboxes are inundated with potentially malicious or unwanted messages. Brands must then take action to ensure that their marketing and transactional messages are received by the end customer in a timely manner. While personalized content is one of the fastest growing parts of facilitating deeper customer engagement, organizations should first understand the value of partnering with a mature and trusted email service provider (ESP.)

Many organizations have built internal competencies around business email. Some businesses use an on-premises email server instance or subscribe to a managed email cloud offering (like Amazon WorkMail), while others use email servers on cloud-hosted infrastructure like Amazon EC2. While the fundamentals of email transport is shared between business and marketing email platforms, marketing and transactional email has unique parameters that require additional consideration. ESPs have built specialized expertise in delivering email at scale.

Security and Scale

ESPs have the ability to send email on behalf of an organization’s domain or subdomains. ESPs facilitate mail delivery securely through both domain-key identified mail (DKIM) records and sender policy framework (SPF) records. SPF validates for the mail received that the IP address is part of an accepted senders list. The second authentication protocol used is DKIM which provides a signature to verify each mail using an encrypted key pairing to validate the domain purported is the actual domain sending the message. The combination of both security methods is the first step in authenticating a message from an ESP to the mailbox provider or recipient domain. An additional optional authentication reporting mechanism is Domain Message Reporting and Conformance (DMARC), which can report back any attempts of non-authenticated parties to spoof sending domains.

In addition to security, the best ESPs can also deliver mail at a very large scale. Scale is not just the compute power to deliver hundreds of millions of email a day. It also includes the ability to sustain significant sending volumes of email over time while receiving end-point delivery messages. However, in addition to ESP infrastructure, there are other insights that ESPs can provide around deliverability of a message.

Deliverability

ESPs typically give mail senders the ability to manage their reputation assigned by major internet service providers (ISPs) that include Google Mail, Outlook.com, etc. Reputation is assigned to sending IP addresses and domains with a combination of influencing factors. Evaluation criteria includes, but is not limited to, the following:

• Type of message and content – Marketing vs. Transactional
• Valid email addresses and hard bounce rates
• Feedback from end users (ie. Spam complaints and unsubscribes)
• Open rates and engagement from end users
• Time of delivery and cadence of delivery
• Major blacklist listings, like Spamhaus

Reputation impacts deliverability, which impacts whether a message ends up in an end customer’s mailbox. Transactional messages and marketing messages are typically treated differently by ISPs. Transactional messages (like order confirmations, password resets, etc.) need to be sent and received within a short period of time after a transaction and has less strict rules when it comes to content and scheduling. Marketing messages must adhere to specific regulatory rules per country.

A poor deliverability designation may throttle or even block your message’s ability to reach its destination, instead ending up in the junk folder or blocked altogether. Top ESPs monitor and provide feedback, ensuring mail senders have the ability to take action. However, ESPs also have a responsibility to keep bad actors off their platforms and will block bad senders utilizing them as an ESP resource.

Most ESPs give mail senders the flexibility to manage their sender reputation through both deployment options and delivery statistics. Common deployment options include shared and dedicated IP addresses and pools. Shared IP pools comprise of many individual senders all using the same IP space. The IP reputation is shared across the pool and can both positively and negatively influence senders in the pool based on the majority of traffic. Dedicated IPs are managed directly by a single customer, and can even be dedicated to specific functions. For example a set of IPs can be dedicated to transaction emails vs. pure marketing communications. Many customers prefer dedicated environments because of the ability directly influence deliverability and prevent external influence on their sending reputation.

Statistics that may prove to be leading indicators of deliverability problems include:

• Mailbox placement (Inbox vs. Junk folder)
• Detailed email deliverability statistics (bounce rates, etc.)
• Blacklist monitoring

However, the most important factor impacting mailbox placement is having explicit permission from the end user, with agreed upon content and frequency. End users should know when they are opting into email communications with senders. It is not recommended to use purchased or rented lists, and doing so is typically in violation of the use policy of most ESPs. To stay compliant, it is important to keep your contact preferences up to date and quickly react to unsubscribes and complaints.

Email Analytics

In addition to measuring your sender reputation, metrics are also an important part of measuring the success of your email campaign. Part of calculating the ROI of your outbound email effort is understanding how many emails were opened and whether the end user completed any calls to action (CTAs) in the mail, like clicking a link.

Email analytics from your ESP should include the end-to-end lifecycle of the mail, including:

• Deliverability rates
• Delivery rates per ISP
• Unique Open rates
• Unique Click through rates
• Unsubscribes
• Complaints

Ultimately, in combination with web commerce integration, these metrics can help you determine conversion rates of your campaign to a paying customer.

Conclusion

Connecting to end customers and driving engagement is the goal of every brand. But to make each connection count, brands must ensure that their messages are being delivered through purpose-built infrastructure. Email Service Providers (ESPs) should be part of every organization’s successful email marketing strategy.

Amazon SES has been the trustworthy, flexible and affordable email service provider for developers and marketers since 2011. Learn more here: https://aws.amazon.com/ses/

¹https://www.statista.com/statistics/255080/number-of-e-mail-users-worldwide/

²https://www.statista.com/statistics/984615/consumer-brand-communications-channels/

About the Author
Heidi Gloudemans is a Senior PMM on Amazon SES and Amazon Pinpoint