What Mailchimp’s Marketing Automation Feature Means for Startups

August 27, 2014 Will Lam

Recently, Mailchimp made the announcement for their Marketing Automation feature, which brings them into direct competition with marketing automation companies and their lower end offerings. I don’t know about you, but I squealed with delight when I found out about it over on Product Hunt, mostly because features very similar to Mailchimp’s automation feature were in my company’s icebox for a while.

For those who don’t know about marketing automation and why I think Mailchimp essentially dropped a bomb in the email marketing ecosystem is that they made something that is normally much more expensive and made the full feature set available to even the entry level paid tiers (sorry freemium users).  This makes any painful setup for not so technical email marketers gain access to a suite of automation tools without the help of developers.

What are the use cases that they provide out of the box?

Mailchimp Marketing Automation Features Some powerful use cases can be put into action such as educational drip campaigns (think email courses), re-engagement emails for re-activating dormant users or not so frequent customers based on certain triggers and criteria that you can set up in advance, and integration with tools such as eCommerce360.

If you’ve been using Mailchimp for quite some time, you’ll understand while they’ve already had some of these abilities for a while, they just haven’t wrapped up the entire experience in a way that’s tightly knit and integrated to serve these use cases under the umbrella of “marketing automation”. If you have buy in with the product management or development team, leveraging Mailchimp’s Mandrill product can make it even more powerful as you look into building out customized workflows.

Making it work

Mailchimp Automation Workflow examples Setting up marketing automation isn’t a trivial task.  It isn’t just something you can execute in a day. Maybe a week if you have assets ready, but you really need to think through the specific use cases that will not only help your customers or members of your product through these automated workflows.

Not only that, it isn’t just set it and forget it.  You need to actively monitor the results to see whether or not the automated workflow is effective or not in terms of return on investment. That being said, you need to run short experiments with small segments. Perhaps the goal is to get micro-conversions to your email list in hopes that subscribers will convert to a paid customer.

How can you do that? Maybe an email course might do the trick, but if that’s going to be done, do you have the time to create the content, research and actually make it look good, so leads feel it’s valuable enough to sign up and actually pay for your product. There will be some upfront costs whether in time or money to have something like this set up, so Mailchimp clearly needs to address this in terms of managing their customers expectations.

But the upfront investment should be worth the effort. If you have a list of tens of thousands of users, you want to make sure your campaigns are being set up properly. To not completely spam your list or make an embarrassing mistake of sending out test campaigns, you should create a dummy list of emails only you control including those who can tolerate your test emails as you fine tune a workflow. I’ve been playing around with the workflows, so I might write something more in depth later on about what I’ve learned. Maybe.

The Bottom Line

Why all this matters is this – it allows small business owners and online marketers to do more with less.  If it’s an established business that is profitable and they haven’t used marketing automation before, there’s a clear upside to this in terms of increasing revenues with a focused and well executed marketing automation strategy.  This is all starts at a stupidly low price of $10 if you have an email list under 500 and it scales up from there, but it’s all very affordable.

If you’re already a paying customer, you can get the added benefit of creating drip  email courses to help convert their email list to paying customers.  A better onboarding flow, which can double as a drip campaign to get users active and using the product. Other things are triggering a series of emails upon purchasing a type of product.

It’s some powerful stuff, if you do it right, but you need to start small before you try executing a marketing campaign across your entire list. Essentially, if you do it right it can help you make more money, keep customers / subscribers engaged, keep customers / subscribers retained.  Getting an “x” percentage lift in conversions, user activity or revenues is nothing to scoff at.  What’s not to love?

What’s in it for Mailchimp?

For Mailchimp, they also stand make more money by enabling tools that help with retention, engagement as I stated previously. They only win when their customers win, and effectively making the switching costs away from Mailchimp that much harder compared to alternatives. From the looks of it, Mailchimp is tackling customer retention, loyalty and converting free users to paid users all in one fell swoop by building an easy to understand user experience to get started.

However, they still do have challenges in educating their users about benefits and the dangers of rushing into such a powerful feature without the proper planning and work beforehand.

My guess is that there will be a compounding effect that Mailchimp caters to the lowest common denominator first and then goes upstream to more profitable offerings upstream with more “enterprise level” marketing automation features.

If they’re to really help with adoption and allowing customers to use these features right away, they should have an educational component whether in video courses, webinars, etc.  There’s a bit of a learning curve and a lot of friction to make something as sophisticated as Marketing Automation work beautifully to send the right emails at the right time to your customers and lists.

Have you played around or executed a marketing automation workflow with Mailchimp yet? What were some of your challenges so far?

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