After 17 years of steady growth, MailChimp has successfully bootstrapped to $400M in revenue - but, in the heavily commoditized email marketing industry, is their current pricing strategy enough to keep driving that growth?Read More
How Mailchimp fights spam
Ben Hillman Sep 21 2022
Spam. We all hate getting it and no one wants to end up sending it.
When was the last time you checked your spam folder? You’ve got anti-virus solutions, political ads, the classic “enhancement” emails… and as a user you probably don’t look at it much. And you’d never intentionally SEND spam, right?
Email is the backbone of any successful SaaS marketing campaign. More than half of the global population uses it. From creating powerful newsletters to offering customer support, the use cases of email in SaaS is ubiquitous. But the threat of spam lurks beyond the click of every send button. It’s a punishment so dastardly that it can torpedo the hopes and dreams of the sender.
Spam messages account for roughly half of all email traffic. And roughly one out of every 10. So while you may not intentionally send spam, if you’re not careful, a series of bad campaigns can snowball into you being blacklisted from customers.
So, how do you fight Spam? There are dubious methods, but this won’t build trust with your audience. Instead, we need to look to experts in the space like Mailchimp. While today Mailchimp boasts over 13 million users, the bootstrapped company was not an overnight success story. They had no outside funding to rely on, so success was predicated on keeping deliverability rates high while striving to be a notable SaaS brand that folks could learn from. All of this culminated in a $12-billion purchase by Intuit, thrusting Mailchimp into the bootstrapped hall of fame…
Mailchimp CEO Ben Chestnut has the answer to beating Spam after decades and a metric ton of emails sent. I’ll tell you what that is, but first we’ve got to get into some background on Mailchimp and the email marketing space.
Today, email marketing is essential to any marketing strategy. It’s an effective way to grow your brand as well as connect with, engage with, and nurture your customers. But, you have to get it right. And unfortunately most companies don’t.
Mailchimp, however, has not only managed to get it right, it’s also managed to stay out of spam folders. And its strategy is pretty simple — always provide really good content.
- Be useful
Avoid the fluff completely. Be authentic and focus on value. In a time when we’re inundated with content, providing valuable and relevant content is do or die. Take the time to provide the quality and value your customers deserve and want. After all, your content is representative of your business. The more value you provide, the more customers you acquire, and more importantly, the more you keep.
- Think outside the traditional marketing box
Mailchimp has embraced being different and, ultimately, it’s what has made them stand out. They’re not afraid to go against the grain and be bold when it comes to its marketing campaigns.
Don’t follow what everyone else is doing, instead embrace what makes your business unique and use it. Try new things. Take chances.
- Be accessible to more
Mailchimp's willingness to take chances also crosses over into switching things up when something’s not providing optimal results. In its efforts to stay true to its original goal of helping small businesses establish themselves through inexpensive email marketing, it decided to go freemium — even after years of charging for its service.
Mailchimp's commitment to providing value was and is the perfect complement to freemium. And by making its service free it was able to reach a wider audience, a move that has proven to be extremely fruitful.
In 1978, a marketing manager named Gary Thuerk (Turk) composed an email that he sent out via ARPANET (the predecessor of the Internet). Within this email, Thuerk advertised open houses in Los Angeles and San Mateo where his employer, Digital Equipment Corp, would unveil their latest computers. ARPAnet had several thousand users, but Thuerk targeted the 600 users on the West Coast. Instead of sending individual emails to each user, Thuerk asked his assistant to send one mass email to all the users. He didn’t know it at the time, but Gary Thuerk had just sent what historians claim was the first Spam email. And it worked. As ingenious and uncharacteristic as this marketing tactic may sound, it fetched Thuerk and his company 20 sales over the next three years of open houses at $1 million each. However, the tactic wasn't without its fair share of controversies. In the days that followed, ARPAnet representatives approached Thuerk, warned him, and made him swear never to do it again.
As you'd expect, and in light of Thuerk's marketing success, no one listened to this advice. More and more marketers tried their luck with email tactics in the years that followed. And with webmail providers like Hotmail and Yahoo, it became easier and easier to send email. While some used email for nefarious reasons, there were genuine marketers trying to sell legit products. Unfortunately, even senders with the best intentions ended up going to spam.
It wasn’t until the turn of the millennium that spamming was declared a real menace. Spam filters hadn’t been invented and slow broadband speeds meant loading messages took up precious time. The first real combat against spam in the US was mounted in 2003, and it came in the form of the CAN-SPAM Act. An acronym for "Controlling the Assault of Non-Solicited Pornography And Marketing." The actual meaning of this regulation is weaved right into the words. At its core, the CAN-SPAM Act sets tight regulations for commercial email messages, as well as gives recipients the right to unsubscribe from a mailing list, if and when they want to. An email marketer that violates this law can be subject to some incredibly steep penalties, ranging from fines of $16,000 per spam email to criminal penalties of up to five years in prison. Therefore, it’s absolutely crucial that SaaS marketers have the right tools to avoid these punishments. So how does one get past the spam filter? Well, it’s not time to hear from Ben Chestnut just yet… but the answer begins with the development of email marketing tools.
Tools for email marketers were primitive in the early 2000s. There was still a gaping hole that needed to be filled — that of designing emails, segmenting recipient lists, marketing automation, and the like. Consequently, several companies rose to fill that gap, with the sole aim of providing impeccable email marketing solutions that would put marketers right into their customers' and prospects' inboxes, and especially, avoid the spam folder. The early lineup itself was star-studded, consisting of companies like Constant Contact, Litmus, and Campaign Monitor. But as they say, the pacesetters aren't always the game-changers. It's those who work the smartest — not the hardest — that take that crown. Enter Mailchimp.
The story of Mailchimp isn't your ordinary get-popular-quickly story. It's a story of patience and lots of it. The premier email marketing service was first launched in 2001 by two ardent web designers, Dan Kurzius and Ben Chestnut. At the time of launching Mailchimp, the two had one goal and one goal only: to help small businesses, like theirs, establish themselves through distinguishable, inexpensive email marketing. They were never in it for the money. As such, they treated the service as a side endeavor. It wasn’t until 2007 that Kurzius and Chestnut decided to put all their eggs in the Mailchimp basket. Email marketing, however, wasn't exactly the best investment in 2007. For starters, spamming was at its all-time high (research has it that spam accounted for 95% of all email traffic that year alone). And people detested the very thought of a commercial email landing in their inboxes. But perhaps even more demotivating for the two co-founders was the fact that better-funded companies were already ruling the email marketing space. But Kurzius and Chestnut didn't give up. If anything, they ramped up their efforts.
For the better part of its history, Mailchimp has been a bootstrapped company. The company pretty much survived as a self-funded, self-sufficient entity. Mailchimp managed to grow beyond anyone's wildest imaginations. Using the platform, customers are now able to create and manage an audience, configure their email marketing campaigns, and monitor their performance — all on one platform. Mailchimp's growth has been gradual and sometimes brutal, but it has certainly been worth it. In 2021, Mailchimp had a revenue run rate of a whopping $800 million, and was purchased by Intuit for $12 billion.
Reasons for success
What makes Mailchimp one of the best — if not the best — email marketing companies today is the fact that their value is directly tied to the success of their customers. As CEO, Ben Chestnut said, “We grow when your customers grow. It’s free to use MailChimp until their databases get to 2,000 members and then we start charging.” But MailChimp didn’t start out with a freemium offering. For eight years, they charged for the product without a freemium tier. The decision to offer freemium was predicated on the idea that some customers would switch to freemium from paid. However, this was a risk Ben Chestnut and co were willing to take as they would now be able to offer their tools and expertise to a wider audience. The fact that Mailchimp is still around today is proof that a freemium offering (even late in the game) is by no means a death sentence — quite the contrary.
In a world where most email marketing solutions stick with the same branding for years, Mailchimp also stands out for being bold, quirky, and fun with its branding. Over the years, they have had several successful marketing campaigns. But, about five years ago they had a stroke of marketing genius. At the time, many people were curious about Mailchimp and what it actually brought to the table. In response, the company created a one-of-a-kind brand awareness campaign to fill that all-too-obvious curiosity gap. It was dubbed "Did You Mean MailChimp?" To get the campaign up and running, Mailchimp crafted many different sites along with rich, well thought-out promotional social media videos. All these campaigns had one thing in common: their names closely resembled Mailchimp. From KaleLimp to FailChips and JailBlimp, whenever someone looked up these quirky terms, they would bump right into Mailchimp. Occupying many different advertising and social channels meant that Mailchimp was everywhere creative-minded businesses might be, without having to use its real name. That's a marketing masterstroke and it's a hallmark of a truly distinguishable SaaS business.
But how do you run a creative company? What’s the secret ingredient to success? As Ben Chestnut says, “it’s about the people.” Since its origins, Mailchimp has succeeded by empowering employees to be themselves, even with quirky promotional campaigns like "cat hats", or "hats for cats." They’ve established a particular brand by being different. By going against the grain of the usual humdrum SaaS playbook, Mailchimp has invented their own style guide.
Additionally, and the reason you’re all here, Mailchimp knows the answer to defeat spam. Going back to that CNBC interview in 2017, Ben Chestnut’s answer is simple: “Be useful and people will like your content and not block you.” Easier said than done of course, but Mailchimp understands this and they understand that if their users don’t then growth will be stagnant. Through their blog and helpdocs, you can understand strategies and tactics on how to be useful. But perhaps the best tool Mailchimp offers is leading by example with their brand.
For producing, sending, and managing outstanding newsletters and email marketing campaigns, you need a tool that's customer-facing at its core and one whose features are always improving. Mailchimp is one tool that truly helps SaaS marketers get the job done — faster, better, and with only a pinch of their resources.
But there's a caveat to all this. Even with an effective tool like Mailchimp, your campaigns will still hit a snag if you fail to create relevant, quirky, interesting newsletters. The modern email recipients are savvy and well-exposed, and the only way to lure them in is to be truly authentic and value-focused. Anything less will inevitably see the inside of a spam folder.
At present, the email marketing spectrum is looking promising and Mailchimp is one of many selections. Over the years, Mailchimp has expanded beyond just email marketing services. The company now provides website hosting services, data analysis tools, social media management technology, and a dozen other products; it's essentially a full-fledged marketing platform. Beyond that, innovative works of integrating email marketing with cloud-based and AI technologies suggest that the industry will only get better, more profitable, and certainly more accommodating from here on out.
However, only the SaaS marketers that are willing to break out of their comfort zones and adopt game-changing technologies, like Mailchimp, will ultimately reap the biggest rewards. Mailchimp’s exact success circumstances probably can’t be replicated, but whether you choose them for their services, or as an example to follow, you’re in good hands. Do you use Mailchimp or a different email marketing provider? Let me know.
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This is a Paddle production—the first media network dedicated entirely to the SaaS and subscription space.
By Ben Hillman
Senior Show Producer at Paddle. Ben is a YouTube fanatic, contributing videos to the platform for 15 years, and amassing 2,000 subscribers to his personal channel. Prior to Paddle, Ben headed up the video team at Boston-based sports firm, CoachUp.
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