FROM COST TO REVENUE
Over the past fifteen years, we’ve been surprised to see how few companies look to generate revenue from email.
At one extreme, some service providers simply treat the email platform as a cost of providing internet services to their customers. They believe their customers expect to receive an email address and webmail as part of their internet package even if they are not planning on using it. Therefore, these service providers do not attempt to derive any financial or strategic value from the email service.
Conversely, domain registrars have pioneered the use of upsell opportunities during the consumer’s online purchase process. Add-ons for services like hosting, certification and privacy protection are all presented as part of the purchase process. Email is another one of the upsell options – and a major source of new revenue.
Some registrars are now taking this one step further by utilising the pricing, bundling and self-service models that have proven to be successful for the world’s leading SaaS companies.
THE POWER OF REAL CHOICE AND SELF-SERVICE
An effective upsell plan requires a simple upgrade path for customers and provides features that actually offer value to customers. Many service providers simply offer two alternative email products at different price points, but since they are completely different products it is very difficult for customers to migrate. Furthermore, the second option is often expensive and includes many ‘collaboration’ or ‘productivity’ suite features that the customer does not require.
One successful approach provides customers with a free entry-level offer and the ability to instantly upgrade at any time, with no disruption to their service
To help our customers get the best value out of their email offering, we have introduced new features and partnership models that will help service providers turn email into a revenue-generating product.
As a result, some of our customers are achieving impressive returns on their investment in the email product offer. Conversion rates from free to paid plans are in the range of 5-10% and up to 25% of their customers are moving away from low-margin products like Google Apps, to more tailored email offers that are much more profitable.
The free service also includes advertising to promote the upsell option and other services, or provides brand recognition and market positioning.