Are you paying too much for Mailchimp?
How to ensure you’re not paying over the odds…
“…I’ll not be happy if you’re using all that money to pay for your Mailchimp account”
No one likes to pay more than they need to
It doesn’t matter whether we’re in the deepest of recessions or are cresting the wave of opportunity and things are great. No one wants to pay more than they have to.
…and despite this, with the many marketing tools that we use in our daily lives with “monthly subscriptions”, there are tools that we’re still paying for that we don’t need… and tools that we’re paying more than we need to for.
Now I’m not saying that you should stop paying for the tools that are essential in your business, rather that you should on a regular basis, audit the tools you are using and make sure you’re not paying over the odds.
One month may not cause a problem, but over a year, or even a lifetime, paying too much is never a good idea.
Are you paying too much for your email marketing?
Now before you go and start looking for a new email marketing tool, that’s not what this article is about. I’m as big of a fan of Mailchimp as there is out there, and I’m not for one second suggesting that you go and look for another email tool that’s cheaper.
For many, Mailchimp doesn’t cost them a bean, offering many of the tools for free… and in fact if you’re doing things right on a small level, you may not need to ever pay for it.
…and when you are paying for it, for most of us, I believe it to be on par with many of the other email marketing tools out there.
But (and it’s a big but!), that doesn’t mean you don’t have a responsibility to ensure you’re being sensible and not paying for more than you need.
…and with recent changes in Mailchimp’s fee structure, that could potentially be the case.
So what things should you be aware of to ensure your Mailchimp bill is at the right level?
Before we begin, a quick message for the UK Mailchimp users out there
If you’re a UK Mailchimp user you need to understand that from early 2020, Mailchimp is starting to charge VAT on your bill.
…and if you’re not registered for VAT, then I’m afraid this means that your Mailchimp bill is upped by 20% (don’t blame Mailchimp, it’s not them, it’s the UK Govt).
If you are VAT registered, then you need to make sure that your VAT reference number is in the Account settings area so that Mailchimp can pay the VAT direct for you. Otherwise you’ll end up paying for it and then having to claim it back once you put your VAT number in (which is a hassle!).
Mailchimp didn’t really announce this, but it’s certainly important to ensure that you aren’t paying over the odds (Read all about it here).
Also, this is not an article about whether you should have a free or paid Mailchimp account
This article is also not going to focus on whether you should be paying for Mailchimp or not – I’ve already written one specifically on that subject.
There are a myriad of reasons why upgrading to a paid account for Mailchimp is a good idea… but for the purpose of this article, I’m going to assume that you know you need to pay for Mailchimp (e.g. you’ve got more than 2,000 contacts in your total audiences).
…so with that in mind, where can you cut corners, without actually cutting the tools you need to use in Mailchimp?
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How to not spend too much on Mailchimp…
There are a number of different areas that you need to assess to ensure that you’re not paying too much for Mailchimp:
- The combined size of your email databases – the main basis for what you’re charged.
- The way Mailchimp charges
- The “level” of paid service you’re at
…and each of them is fully within your control to change.
Size Matters… when it comes to your email costs
It doesn’t matter what type of account you’ve got, how much you pay is impacted by the combined size of all of your audiences.
However, there is an important distinction between those Mailchimp users who had a paid account prior to the middle of June 2019 and those who have set up a paid account afterwards as those who have an old ‘legacy’ account are charged on a different basis.
If you had a Mailchimp account prior to June 2019, Mailchimp will calculate your costs on a sliding scale of how many active subscribers you have across all of your audiences. The more subscribers, the bigger the cost.
The big difference is that for those of you who’ve got new paid accounts which you opened after June 2019, your cost is calculated based on the total number of “Contacts” as opposed to Subscribers (this is why Mailchimp lists both on the audience front page).
So what’s a contact?… Mailchimp class a contact as “subscriber, unsubscribed or non-subscribed”
- Subscribed – we know these people, they have opted in to receive email marketing (and potentially other forms of marketing).
- Unsubscribed – Someone who has opted out of email marketing… but can still be targeted with other forms of marketing via Mailchimp (Ads, Postcards & Transactional Emails).
- Non-subscribed – Someone who is in your audience because they’ve been captured through an online store, but as of yet, haven’t signed up to receive your marketing emails (They can receive Ads, Postcards & Transactional Emails).
Now this is not the article where we discuss whether Mailchimp should or shouldn’t be charging for individuals that you can’t actually email market to, but understanding the way that Mailchimp bases it’s charges means you can now ensure you’re not paying over the odds.
Action (Old/Legacy) – You don’t get charged for Unsubscribes/Non-subscribes so no specific action on them.
Action (New/Non-Legacy) – Are you using Ads, Postcards or Transactional Emails?… If not then you need to regularly Archive Non-Subscribers/Unsubscribers so you don’t pay for them.
Obviously, it depends on how big your list grows during a specific time period and how is set up to charge (see below), as to how often you Archive these people.
A Clean Chimp is a Happy Chimp
So that covers Unsubscribes and Non-Subscribes, but you primarily get charged for people who are subscribers in your audiences no matter when your account was set up, and so keeping them clean is an important part of not paying over the odds for Mailchimp.
List cleansing is something that everyone should do on a regular basis as it has an impact on your ability to get emails into the inbox – but it also has an impact on how much you pay.
Simply put, do you want to be sending emails to people who aren’t engaged and opening them? In my book, probably not! In which case you want to be ensuring your audience is cleaned regularly.
What do we mean by cleaned?
Well, it’s about identifying those individuals that are either not engaging with your content or did so a long time ago and haven’t done so recently… and then politely asking them if they still want to receive your stuff. If they say yes… great!… if they say no, then you can archive them (never delete them).
There are several ways of identifying people who haven’t engaged with your content.
- Use Mailchimp’s “star” rating for contacts
Simply put, Mailchimp assesses how much people interact with your emails over time and assigns them a rating out of 5. You can read their explanation of the rating here, but simply put anything less than 3 stars is someone who Mailchimp thinks isn’t very engaged with your content.
- Segment your audience based on specific email interaction
Mailchimp allows you to create a segment of people who’ve not interacted with your emails over a period of time – and then you can essentially send them an email/series of emails which ask them if they still want to get your emails.
In terms of how you do this, it all depends on how frequently you send emails! Mailchimp lets you identify those who’ve not opened/clicked campaigns (either standard or automations) up to either 50 campaigns or 3 months into the past and put them into a segment – and then you can email them asking them if they’re in our out.
There are one or two things you need to be aware of though…
Cleaning an audience is not as simple as you think…
Cleaning an audience should be simple, no matter how you “choose” the people who are not interacting with you (I call them Zombies). Here’s a few things you need to be aware of:
- If you use lots of automations, you need to make sure you create segments which cover both standard campaigns and automations.
- Sometimes Mailchimp gets it wrong (!) – I regularly hear of people who have segmented based on non-opens of campaigns, sent emails to these people saying you never open stuff… and then get replies saying yes they do!
This is because an open is sometimes hard to classify due to the tracking measures any email system employs – things like corporate filters, previews windows and “don’t load images”. So you need to be very careful in how you handle these people because you don’t want to ‘cut off your nose to spite your face”. Also, anecdotally, I occasionally hear that Mailchimp ‘misses’ people who’ve actually been opening emails.
- I’ve not found a way of automating this (hasn’t stopped me trying!) – I’m sure there’s a way of doing this on an automated basis, but it’s likely to be a long and complicated process – and unless you’ve got a massive list, unlikely to get you any big benefit.
- The way contacts “opt back in/opt out” needs to be carefully managed. Mailchimp is not a fan of any specific email generating lots of unsubscribes – so you can’t just ask those who fall into the ‘at risk’ category to click the unsubscribe button in an email. I’d suggest on a basic level you ask them to email you to say they want to stop – that way you can manually unsubscribe them without the fear of penalty.
- Finally, you don’t want to set the window too tight… so it’s probably worth while putting a barrier in for those who only joined in the last 3 months
Action – Go through your audience and identify the people who are “Zombies” and do something to get them back on board, or to positively opt out.
The peril of too many audiences
Ahh… the old “Mo Audiences, Mo Problems” chestnut. The first rule of Mailchimp is to just have one audience.
Bar only a few situations, having multiple audiences is a bad idea… and should be avoided at all costs.
One of my most important articles explains this in detail (find it here – https://www.chimpanswers.com/resources/mailchimp-audiences/) – and one of the key reasons is not paying twice for people.
If you’ve got multiple audiences, then you may have the same person in more than one – and if that’s the case, you’re paying for them twice – which is more than you should. So look to combine them to bring costs down.
Action – If you’ve got more than one audience, combine them if at all possible.
How Mailchimp Charges
In June 2019, Mailchimp announced a whole raft of changes and one that many missed was how they charge.
If you’re on an old ‘legacy’ account, it’s simple. Mailchimp charges based on the total subscribers, and will adjust your billing each month based on the largest subscriber total for that period – fairly simple.
However if you started a new account after this point, Mailchimp changed the way it charges, and this could be costing you more.
When you set up the paid account, you set the level of subscribers you want… e.g. 2,000 and you pay for that.
However, if you go over that, instead of prorating the charge up, they charge an “overage” fee which is more than the prorated level… and if you don’t agree a new “level”, then you’ll end up paying a lot more than you should.
For example, if you set up at 2.5k subscriber level on the standard plan, you’ll pay $49.99 per month.
If you load in another 2.5k of subscribers during a specific month without upping your level, you’ll pay an additional $9.99 for each 300 = $89.91.
However, if you upgrade your subscription level to 5k to cover this increase, you’ll pay a total of $74.99.
So that means you’re paying $64.91 MORE if you don’t change your subscriber level.
So you really need to keep an eye on your audiences sizes to avoid some expensive charging…
My personal opinion is that this is a bit ‘sneaky’ so you need to be aware and not pay over the odds.
Action – review your subscriber level (if you have a new Mailchimp account) to ensure you’re not paying for overages.
Are you at the right level?
Again, in June 2019, Mailchimp changed the way it operates and offered two levels of service, Essentials and Standard (again legacy accounts are unaffected).
I covered both and the difference in this article on whether you should pay for Mailchimp at all, so if you want to know which you need, check it out.
If you’re at the 5k subscriber level, the difference in cost is $25 (or 50%) between Standard and Essentials, so you can definitely save some money if you don’t need the Standard package.
Action – Review if you need to be at Standard or Essentials level.
Look after the pennies… and the pounds will look after themselves
It may be a UK phrase, but its sentiment is worldwide… pay attention to your costs and it’ll work out well for you.
Back before June 2019 it was a lot simpler, and if you’ve got a legacy account then I’d suggest you just need to do regular cleanses.
However, if you have a new paid account created after June 2019, there is a good chance you could be paying more than you need.
No matter if we’re in recession or boom, you should never be paying for more than you need, so I’d advise you go and check this out ASAP and keep your costs down.
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Robin Adams is a business owner who is passionate about helping businesses build effective marketing systems that work and don't waste money. Having a lifetime of Marketing experience (he's got a degree in Marketing before there were degrees in Marketing!) and having worked for big and small businesses and both client and agency side, he understands not only the theory, but the systems that are required to underpin everything.
51% marketer and 49% Chimp, Robin is the main man behind chimpanswers.com and the Mailchimp Answers Facebook Group - the world's biggest Mailchimp User Group. Connect with him on Linkedin.
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