How does email marketing agency pricing work for ecommerce brands?

No one take trial without checking the pricing. This article covers email marketing agencies work scope and pricing especially for ecommerce brands.

Table of Contents

As an email marketing agency owner for 2 and an ecommerce founder for 7 years, I have worked with a few agencies. Also, we do white-label solutions for some of the biggest email agencies in the world.

Overview

How much does it cost for hiring an email marketing agency?

Short answer, it depends 🙂 

Email marketing agency pricing depends on years in business, track record, geographic location, and team size.

To compare pricing, we need to see two things – 

  • What email marketing agencies do?
  • How they structure their pricing models?

What email marketing agencies do?

Email marketing agencies help brands with their email marketing. 

Email agencies offer either, Strategy or Strategy with Execution.

Strategy

Strategy or Consulting involves – 

  • Audit / Reporting along industry benchmarks, metrics, best practices etc.
  • Recommend action plan for email platform, migration, setup, automation/flows, campaigns, pop ups, A/B tests etc.
  • Execution overview, for the helping internal team with getting the execution done.
  • Weekly Check-in Call

Very few agencies provide strategy / consulting as a separate service. Consulting starts from $500 to $5000 depending on the scope and expertise.

With online courses, inexpensive guides, and tool support most brands don’t go for consulting.

Strategy & Execution

Email marketing is not a new field. Most brands have more or less clarity of what it involves, what needs to be done.

They just lack the resources, expertise to get it executed at scale.

In execution, there are two parts in ecommerce, 

Single Promotional Campaign

The single promotional campaign includes the campaign theme, copywriting, designs, template, setup.

Single promotional campaigns start from $100 to $350 per campaign.

Some sell it separately or some part of a monthly package of 5 (1 per week), 10 (2 per week), 18 (4 per week).

As part of the monthly package, it also includes a Campaign Calendar, Audience Segmentation, etc to help you succeed with campaigns.

For most agencies, turnaround time is 2-5 working days for a single campaign.

Also, agencies offer revenue sharing at 5-15% of revenue generated from the promotional campaigns.

Marketing Automations

Marketing automation is not that straight forward as promotional campaigns.

Setting up marketing automation includes events/triggers, sequence planning, storyboard, copywriting, design, setup of emails and triggers.

As a part of service, it also includes segmentation, pop-up forms, list management, tool selection, setup or migration, etc.

The complexity of automation will be different for smaller brands compared to large brands.

On pricing, it will cost around $1000 to $5000 on monthly basis for building, managing or optimizing automation.

Some agencies, charge for setup fees as one time and then ongoing monthly engagement costs.

Marketing Automation Price Difference

Given the high range, the pricing of automation can vary for many reasons. 

Pricing Difference Reasons – 

  • Count of emails in a automation. (Some agencies give 1-2 email per automation, we prefer 3-4 emails in a healthy automation)
  • Design of emails in automation (Some setup flows without much design / banner and just around the dynamic components)
  • Count of automations (For single ecommerce brand, 5-6 automations is must for covering important touch points)
  • Level of personalisation (Personalised cross selling, up selling or other recommendations)
  • Inclusion of other features like pop ups, list cleaning and personalisation.
  • Reporting or minor tweaks are included or billed separately. We offer a free 30 days post implementation report with minor tweaks.

How agencies structure their pricing models?

For the same set of tasks, agencies can bill differently. Broadly there are the following methods – 

  • One time project pricing
  • Monthly recurring retainer
  • Revenue Sharing

One time project pricing

One-time project pricing is for setting up automation flows. Agencies offer a bundle of 3 or 5 flows as a one-time setup.

Costing starts from $1000 to $5000 but large or reputed agencies don’t do it as a part of a one-time setup.

This works best for starting up. Might be a small project to see the quality, process, and execution. 

Monthly retainer

Most agencies prefer the monthly retainer model. The most common structure is a mix of automation setup/optimization along with a count of campaigns.

So they might structure like 2 flows + 10 campaigns per month. A complete end-to-end solution, so brands don’t need to worry about email again.

Works best for the brands and agencies, as it’s consistent, predictable, and manageable.

Also from performance, we have the leverage to run audience tests, take complete ownership and deliver results.

Revenue Sharing

Some agencies offer 5-15% revenue sharing on campaigns. For automation, most charge percentage on performance improvement over current metrics.

The best part about it is leverage for both agencies and brands for performance. Common issues arise around predictability, reconciliation, attribution.

For the right alliance, this can do wonders for both but I have seen little success on this model.

Conclusion

To summarise, pricing in services is not standardized. A lot depends on the scope of work, performance, and track record.

My advice would be to choose the right partner and then giving a runway of 3-6 months to see results. As in any project, it takes time to get results and maximize profits.

Increasing revenue might be easy for brands starting with email marketing. Tough if it’s already optimized. But in both cases, maximizing revenue might take 3-6 months.

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