Yesterday I highlighted almost a dozen email marketing companies with at least 100 employees or $15 million in revenue. Yes, that’s right, a dozen highly successful email marketing companies in the United States alone. That’s a ton of companies. The big question is: why hasn’t the email marketing industry gone the way most technology markets with a winner take most outcome in a few industry segments?
Here are a few ideas why there’s a proliferation of successful email marketing companies:
- Email marketing, unlike most markets, can show a return on investment within an hour of using the tool
- Most companies and organizations need email marketing leading to an abundance of specialization by vendors and a large overall market
- Recurring revenue businesses with high gross margins, like email marketing, make it easier to grow and build a sustainable business once you’ve crossed the desert (say $2 million in revenue, which is incredibly difficult to achieve)
- A lack of network effects and the multitude of spam challenges and email clients make for fewer reasons to switch providers as an end user, assuming things are working well
Email marketing is an unusual market for these reasons and more. The proliferation of successful email marketing vendors shows no sign of slowing down.
What else? What are some other reasons there are so many successful email marketing vendors?