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Q: Promoting a Free & Premium service webmail site ( Answered 5 out of 5 stars,   0 Comments )
Question  
Subject: Promoting a Free & Premium service webmail site
Category: Business and Money > Advertising and Marketing
Asked by: lizardnation-ga
List Price: $25.00
Posted: 02 Oct 2002 19:16 PDT
Expires: 01 Nov 2002 18:16 PST
Question ID: 71875
Hello,

Lets say you had a pretty good domain name that's suitable for a large
user base as an e-mail domain and you've decided to make the domain
publicly available as a free service with limited features and through
a premium service which allows for more space and features.

There will be banners showing where the free users are concerned and
would always be lured into premium service as banner revenues can't
keep things floating from what I understand. :-)

How to I promote the site and what features and service have the most
weight?

What are reasonable charges for those fee based services?

Answers can contain opinions from experience and knowledge as well as
references to surveys and studies.
Answer  
Subject: Re: Promoting a Free & Premium service webmail site
Answered By: lot-ga on 03 Oct 2002 02:52 PDT
Rated:5 out of 5 stars
 
Hello lizardnation-ga

Email is a service users access daily, the challenge is to persuade
users to use your email service over their own ISP's. Users will tend
to use a webmail service if they don't have their own ISP account or
if they want to use an alternative address for online registrations to
keep their main ISP email free of spam.

To make your service attractive you need to have some unique features,
as there are plenty of free email providers in the market:
Google Directory  > Computers > Internet > E-mail > Free > Directories
and Guides
http://directory.google.com/Top/Computers/Internet/E-mail/Free/Directories_and_Guides/?il=1
Internet ISP's now offer webmail as a extended feature of their POP
email.
Personal domain name acquisition has also grown due to lower prices
and easier accessibility where before it was the preserve of internet
companies or business concerns, people register their own names and
use that as email.
I entered the market 2 years ago with a free webmail service and even
then I thought "am I too late?", with hundreds of providers offering a
similar service.

So even at a free level, there is stiff competition. Enforcing a user
to pay is difficult if they can find the same level of service
elsewhere for free.
Giving the option to upgrade as you intend, is much better than
charging all the user base, as that may introduce some ill feeling
forcing some of your user base to other free users.

I feel you need to promote your unique features which will
differentiate the email product. It might be having effective spam
filters, enhanced security like easy encrypted emails, large inbox
capacity (contrast that to 2mb at Hotmail), POP service, SMTP outgoing
mailserver or a short memorable name. Two providers who have provided
added value over Hotmail are Another.com ( http://another.com ) with a
huge choice of owning multiple email addresses which make a statement.
They have 15,000 domain names to choose from. V3 ( http://v3.com )
also have a choice of memorable short names, like @go.to and @i.am (
http://v3.com/domain_options.html ) for $12.95 a year

As an example of a rich feature set, Zapo ( http://zapo.net ) promote
their features as ( http://www.zapo.net/skins/zapo.net/img/whyzapo.html
)
- Easy to use (remember) e-mail address (e.g. swen@zapo.net);
- Extremely fast;
- Correct foreign language visualization;
- Instant e-mail delivery to any place in the world;
- POP3 access;
- Intuitional interface; 	
- Mobility - You have access to your e-mail at any time and from any
place;
- WAP access (reading messages via GSM);
- Rich text (HTML) format;
- Drafts/Postponed mail;
- Address book with nicknames;
- 12MB quota;
- 2 ways of deleting messages;
- Read RAR and ZIP archives without downloading the attachments;
- Reading Word and Excel content without downloading the attachments;
- SSL encrypted passwords;
- Online password change; 	
- Address book import from OutLook, Messenger, Yahoo!, GMX, etc.;
- User defined message order; Reply and Forward functions;
- AntiSPAM filters; AntiSPAM real-time Blocking List (RBL);
- Unlimited number of attached files;
- Automatic signature; 
and as you can see they have some attractive features in there, though
their subscription service only seems to add more space and an SMTP
server.

To promote the site you need to highlight unique features, and place
the email sign up link on your homepage in a prominent position for
maximum exposure. The actual sign up page you can search engine
optimise too for keywords revolving around email services so it gets
picked up in searches. On users outgoing emails append a discreet sign
up for free email URL to enable viral marketing.
As the advertising revenue is so low anyway, maybe consider having an
banner ad free email service? That would certainly be an attraction.
Though I'm guessing you are using a turnkey or ASP email service so
the functionality is dictated by what your supplier offers, however
you can always play around with words and market the strong points.

Hotmail has had it's popularity boosted by it's instant messaging
function,
people need to sign up to Hotmail to gain access to MSN's IM vehicle.
Most other free email services do not offer IM so despite Hotmail only
having a 2mb inbox allowance many people still use it. Hotmail have
also marketed their free email with 'Passports', sign up once to gain
access to other features on the MSN network this 'locks' people into
their service to some extent. They popularized webmail virus
protection and the ability to download emails via POP - this doesn't
necessitate a visit to Hotmail's (slow) site to read email.

I couldn't source a most popular function list for webmail but if you
take the world's most popular webmail service Hotmail and look at the
features, that would give a pretty good indication of what is popular.
Maybe also analyze Yahoo's webmail offering which is also one of the
world's most popular services.
Hotmail features:
http://lc1.law13.hotmail.passport.com/cgi-bin/dasp/ua_info.asp?_lang=EN&pg=whysign&us=ws&id=2&fs=1&cb=_lang%3dEN&ct=1033638057
Yahoo features:
http://edit.yahoo.com/config/form?.form=ym_signup_more_info&.intl=us&new=1&.done=&.last=&.src=ym&.v=4&.u=0&.partner=
By benchmarking against these two providers should give you a good
indication, both are IM capable.

A feature which I feel is under exploited is encrypted messages, where
a webmail service provides easy encryption. This also acts as a
marketing function as people needing to read the senders messages need
to sign up, a subtle kind of viral marketing. With current encrypted
messages on POP users need to install PGP and then their users have to
install PGP, which has been overly complex for normal users.
Newer features in the UK which are starting to appear are SMS
notification of new messages, the ability to pick up email messages on
a mobile phone either via a string of SMS messages or email to speech
technology, and to reply as an attachment. WAP access to the email is
also growing. However this is probably growing faster in the UK than
the States due to the higher penetration of mobile phones and SMS
usage.
Such services as provided by Tiscali ( http://phone.tiscali.co.uk )
and T Mobile ( http://www.t-mobile.co.uk/Dispatcher?menuid=phones_tfe_me
)

Don't use popups, or too much advertising in the email area, keep the
speed fast and service realiable, people won't use the service if the
email is delivered next day, or emails get 'lost'.

Reasonable charges are in the region of $10-12 a year based on what
others are charging. Though often you may find you need to make
somebody dependent on the email first. (hence the free offering).
Higher conversion ratios will result from those that do not want the
hassle of changing and have their email address ingrained into their
friends address books or IM clients. I would build out the free
service first (maybe) so you have a sizable user base with which to
offer the upgrade service.

"The decision by free Web mail providers like Hotmail and Yahoo to
start charging for a premium service has opened the door for Internet
service providers worldwide to profit from offering premium e-mail
services...
As a high-end e-mail and messaging server software vendor, Rockliffe
believes that the recent moves made by Yahoo and Hotmail instituting
fees for formerly free services opens the door new revenue streams for
e-mail service providers, like ISPs.
Alun Davies, Rockliffe European director, said that the revenue
potential for e-mail services is significant, even if the cost is as
low as $1 per mailbox, because bandwidth demands are on the rise...
According to studies done at the end of 2000, Hotmail was one of the
largest free Web mail service providers with more than 85 million
registered users. But when it comes to Web-based services, popularity
does not necessarily translate into profit.
The explosion of digital camera use and MP3 music file swapping cost
Hotmail a fortune in bandwidth. Consequently, Hotmail instituted a
transport limit of 2 Mb for users. For just $12.95 a year, Hotmail
will increase user's transport limits five-fold to 10 Mb. If every
Hotmail user opted to pay for upping their file size limitations,
Hotmail would make more than $1.1 billion a year...
Rockliffe's checklist for establishing successful premium e-mail
services includes:
- High Availability: Subscribers who cannot easily access their
paid-for e-mail will simply stop paying and move their account. ISPs
will need to review their e-mail infrastructure and add resilience
where required.
- Secure Service: Subscribers will not want to pay for extra storage
space that quickly fills up with unsolicited e-mail or automatically
propagated viruses. ISPs will need to offer anti-spam filtering,
anti-virus filtering and content scanning.
- Technical Support Services: Paying subscribers will demand the
ability to communicate problems at any time and will expect to be
provided with 24/7 support services.
- Billing Integration: To benefit from paid-for subscriptions, ISPs
will need to be able to integrate their e-mail infrastructure with
billing and customer relationship management (CRM) software.
- Feature Rich: Paying subscribers have the right to expect a feature
rich e-mail service that includes POP3, IMAP, Web mail, mobile device
access, forwarding, auto-responders, signatures, and aliases."
"Charging Fees For What Once Was Free" by ISP-Planet Staff 
Jan10, 2002
http://www.isp-planet.com/equipment/2002/rockliffe_review.html

"There will always be low-end services with no support offered for
nothing," predicted David Ferris of Ferris Research, "and then there
will be all sorts of services consumers sign up for, from $5, $10 or
even $15 a month"...
But Ferris said that longtime free-mail users aren't likely to be
happy about all the e-mail changes, and "some will feel outraged, and
some will feel like they're being taken advantage of." But since the
services are moving in lockstep with each other, many people will feel
that they have no choice but to pay for better features."
"Rising Costs of Free Web E-Mail" by Farhad Manjoo Wired 
http://www.wired.com/news/business/0,1367,51701,00.html

"Consumer perception of “free” versus “paid”
Users of free Internet services may not use them as frequently as
users who must pay. For example, Microsoft has reported that more than
2.5 million Canadians are registered users of Hotmail, but many of
those members use the service sporadically (Akin.) Consumers perceive
that free services lack the quality of paid services. A perception of
low quality produces a low demand for free Internet services."
"Would you continue to make use of the Internet if you had to pay for
some essential services currently free?
          Frequency       Percentage 
Yes          18                 36% 
No            9                  18% 
Maybe      23                 46% 
               50                100% 

"The Death of Free Internet Services" MGM 371: Business Information
Systems utm.utoronto.ca
http://home.utm.utoronto.ca/~e0gdij25/mis_report.htm

"The web-based email provider Another.com is to start charging for its
service in a move that could spell the end of free email on the
internet...
According to the online measurement company Hitwise, Another.com is
the UK's biggest email service ranked by number of page views...
Another.com plans to introduce a number of payment options, including
monthly subscriptions for around 1.50 per month or annual
subscriptions for around 15 for new users.
"We'll be looking into various payment models such as reverse billing
via mobile phone, premium rate phone lines and credit and debit
cards," said Steve Bowbrick, the Another.com chief executive, who
added that the range of ways to pay was important as most of the
site's users were under 25...
Mr Bowbrick said he believed the site's unique qualities would make it
something that people would be willing to pay for.
"Email is the fastest growing communication medium ever, yet no one is
making any money out of it."
"Another.com move may signal end to free email" by Owen Gibson
Oct10, 2001 
http://media.guardian.co.uk/newmedia/story/0,7496,566823,00.html

"Convincing Web surfers to pay for anything but porn is a hard sell,
but big media companies are making some progress...
A recent Jupiter Media Metrix survey found that more than 70% of Web
users still can't fathom why anyone would pay for Web content. It's up
to the sites themselves to persuade users otherwise."
"Partial Pay Dirt" by Peter Kafka, Apr 29, 2002  Forbes Magazine
http://www.forbes.com/home/free_forbes/2002/0429

However the bottom line is the free webmail service doesn't always
need to make a profit, in many cases it is used to channel traffic.
Email is one of the top activities on the net, and if users go to your
site to login, they will (or should) be visiting your homepage
everyday. It could be viewed the free webmail service is a business
cost to drive traffic. Free email is actually one of the ways to
promote your site.

Search Strategy:
hotmail charging subscriptions
://www.google.com/search?hl=en&ie=ISO-8859-1&q=hotmail+charging+subscriptions
webmail "most popular" functions OR features
://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&newwindow=1&q=webmail+%22most+popular%22+functions+OR+features&btnG=Google+Search

I hope that helps, if you need clarification just ask.
kind regards
lot-ga
lizardnation-ga rated this answer:5 out of 5 stars
Thanks Lot! ;-)

/Lizardnation

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