I’m working remotely today from cafes in Charleston, SC—a needed change from the home office. In search of a free wi-fi connection, I left a Starbucks for another cafe down the road. From a business owner’s perspective, I couldn’t help thinking about the customers that Starbucks looses by offering a pay wi-fi service while others give it away.

Surely it’s not because the mega franchise can’t afford to give it away. Which begs the question, do they charge just because they can? Or are there other considerations involved. Maybe it serves as a way to shew away squatters that plant themselves for hours on end. But the squatters at cafes are generally caffeine addicts that chain drink. I’m on my third cup now, not to mention the breakfast sandwich, bottled water and 1 lb. bag of coffee beans that I purchased.

Don’t get me wrong, I’m not bashing Starbucks. I’m actually a fan of franchises and admire their finely tuned business model. So I’m left to think that the free vs. paid wi-fi decision must have been run through “the formula” and the pay service option came up the winner.

On a side note, didn’t the company just announce the closing of over 600 stores due to changes in in-store traffic? …changes in traffic just like my relocation to another local cafe for free wi-fi? Perhaps not, but you have wonder.

So how does this example apply to your business? What is the relative cost of providing a service or feature that would keep customers at your store or on your website, vs. the added revenues gained by simply keeping that customer around a while longer?

To be sure, there are cost-benefit considerations to any and every service that you offer. A recent example with my business was discontinuing our email marketing service. The time and cost of maintaining the back-end applications outweighed the return we were getting. Now I refer clients to third-party email marketing services. While I can’t help thinking that I’m sending business elsewhere, I know that I made a business focus decision that made sense for my business at the time.

From a consumer’s point of view, the Starbucks paid wi-fi decision seems like a poor one. But is it?

I turn the question to you. What are some cost-benefit decisions that you’ve made recently with your business?

Dear Client:

I’d be happy to explain the different considerations when choosing a platform or service to deliver your email newsletters. As we discussed, it’s possible to use your blog or a third-party email newsletter marketing service.

In many ways the technology behind a blog and an email newsletter management service are the same. They both contain a back-end database to store data like addresses and names and a front-end website component to collect the data. Both offer a way to deploy emails, but a specialty email newsletter service will allow for highly stylized html emails.

The major divide between the two platforms comes in the email delivery and management process. Third-party email newsletter services, like Constant Contact and Email Labs (more listed below), specialize in meeting all the technical hurdles involved in successfully delivering email. Some of these hurdles include spam filters, ip blocking, and so on. Another difference is the ability to deliver a high volume of email and track usage and overall campaign effectiveness.

It’s worth noting that email marketing is a highly monetized segment of the industry and generally carries a hefty price tag (est. $25-100+/month). There are different fee structures used by the third-party services – i.e. pay by the number of subscribers, pay be the number of emails sent, and everything in between. Knowing how large your database is or will be and how often you intend to send e-newsletters will help to select a service.

So should you use the blog or a third-party email newsletter service? If the newsletter is a simple, text email and you’re subscriber database is under 5,000, then I would recommend starting with the blog. For a stylized, html email and a database to exceed 5,000 subscribers, I would recommend a third-party service to use from the start.

Here is an expanded list of email newsletter and e-marketing third-party services:

• http://www.constantcontact.com/
• http://www.benchmarkemail.com/
• http://www.boomerang.com/
• http://www.emaillabs.com/
• http://campaigner.com/
• http://www.myemma.com/
• http://www.graphicmail.com/
• http://www.icontact.com/
• http://www.mailbuild.com/
• http://sendloop.com/

I hope this was helpful in your decision making process. Please feel free to reply with any questions or comments.

Regards,
Dominic

Dominic Taverniti is the owner of Applied Web Vitals, a web design and development company specializing Dreamweaver templates and the Adobe Contribute CMS. Please feel free to contact us any time to explore your next web design or development project.