Wednesday, July 12, 2017

Will Microsoft’s new email marketing tool kill MailChimp?

Microsoft recently released an email marketing extension of Office 365 Microsoft Connections. Connections allow users to create professional-looking email marketing campaigns on the web, iOS, and Android. It monitors campaign performance, including clicks and open rates, and manages subscribers. In many ways, Microsoft Connection’s value proposition is similar to MailChimp’s! If this was not enough - Microsoft is offering the email tool for free just like MailChimp! Ever heard of anything ‘free’ from Microsoft before?

MailChimp announced in early May that it would give its 15 million customers free access to its email marketing tools, a service previously which came at extra cost. While MailChimp is cheaper than an Office 365 subscription, experts say that's only true to a point. The MailChimp business model has a "free to play" lower tier which spikes upwards as a list of subscribers grow. For example, with MailChimp, you can email to a list of up to 2,000 subscribers a month for free, but if you have 24,000 subscribers, it will cost you $150 a month. However, MailChimp’s model is not sustainable - especially if it were to compete with tech giants! Microsoft on the other hand, has $126 billion in cash on hand, so offering products for free is no big deal for them.  But with Microsoft's offering there is a catch - Connections is not really 'free', you will need to purchase Office Suite to install the email tool!

While leveraging Microsoft's platform may seem tempting to small businesses, they must wait to see if Connections will be like Microsoft Media Player or Microsoft Money! Will it be a huge success or will it just fail like several other Microsoft products?

It is perhaps too soon to say anything, but it will be interesting to see if Microsoft is able to revolutionize email marketing with Connections and if MailChimp will be able to sail through the fierce competition from a tech-giant!


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