Contact-based pricing for CRM marketing automation: how list size drives cost

Marketing automation inside a CRM is usually priced not by seat but by the number of marketing contacts you store, or by the number of emails you send, in steps or tiers. The bill therefore grows with your list, whether or not those contacts ever open an email. For a Canadian small business the cheapest way to control this cost is also the legal one: keep only contacts for whom you have valid consent under CASL, mark everyone else as non-marketing, and remove contacts whose implied consent has expired. A clean list of 2,000 consented contacts can cost less and perform better than an old list of 10,000.

This guide is part of the CRM cost overview. Prices and tiers below are illustrative.

How contact and volume pricing works

Some vendors let you mark contacts as non-marketing: you keep them in the CRM for sales and service, but they do not count toward the marketing tier and cannot receive marketing emails. This is often the single most effective cost control.

Illustrative example: what a growing list costs

The figures below are invented round numbers to show how tiers behave. They are not any vendor's price.

A Halifax home-services company has 2,300 marketing contacts after importing everyone from its old invoicing system. That puts it in the 2,001–5,000 tier at $2,520 a year. A review finds:

• 650 contacts are past customers whose last purchase was more than two years ago and who never gave express consent, so their implied consent under CASL has expired;
• 180 are duplicates;
• 90 are inquiry-only contacts whose six-month implied-consent window has passed.

Removing or flagging those 920 records leaves 1,380 contacts and drops the business to the 1,001–2,000 tier: $1,080 a year, a saving of $1,440 a year, or $4,320 over three years. More importantly, the business stops emailing people it no longer has consent to email.

CASL and contact pricing are the same problem

Under Canada's Anti-Spam Legislation (CASL), you generally need consent to send a commercial electronic message. Implied consent from an existing business relationship has time limits: two years after a purchase or contract, six months after an inquiry. Express consent lasts until the person withdraws it. In practice:

1. Record the consent type and date for each contact: express, implied by purchase, implied by inquiry, or conspicuous publication.
2. Set an expiry date for implied consent and use automation to ask for express consent before it ends.
3. Suppress contacts whose consent has expired, or move them to non-marketing status.
4. Honour unsubscribes without delay and in any event within 10 business days.

Read the full rules in the CASL consent guide.

Questions to ask before you buy

• Is pricing based on all contacts, marketing contacts, active contacts or emails sent?
• Can I mark contacts as non-marketing, and are they excluded from the count immediately?
• If I cross a tier mid-term, is the increase prorated, and can I go back down at renewal?
• Are overage blocks billed monthly or committed for the year?
• Do imports default contacts to marketing status? Can I change that default?
• How are unsubscribes and bounces handled, and do they still count?
• Is the price in Canadian or US dollars?

Budgeting for list growth

Contact tiers make marketing costs step up rather than rise smoothly. When you estimate three-year cost, use the list size you expect in year three, not today's.

Illustrative method. If you add about 60 consented contacts a month and lose about 20 to unsubscribes and expired consent, your net growth is 40 a month, or 480 a year. Starting from 1,380, you reach about 1,860 after one year and about 2,340 after two years, crossing into the next tier during year two. Budget for it, then use the renewal and FX buffer calculator to add the step and any USD exchange-rate buffer.

Ways to keep the cost down

• Import only contacts with a documented consent basis; keep the rest non-marketing.
• Run an expiry campaign asking implied-consent contacts for express consent before the window closes.
• Remove hard bounces and duplicates every quarter.
• Use segments instead of separate lists, so the same person is not counted twice.
• Check whether transactional emails (receipts, appointment reminders) are counted; some vendors handle them separately.
• If you send only occasional newsletters, compare a send-based plan with a contact-based plan.

FAQ

Do unsubscribed contacts count toward my tier?

It depends on the vendor. Some exclude them automatically, others count every stored contact. Keep the unsubscribe record, because you need it to show you honoured the request, but check whether it can be held as a non-marketing record.

Can I delete contacts to save money?

You can, but keep a suppression record of people who unsubscribed so they are not re-imported later. Under privacy law you should also not keep personal information longer than needed for its purpose.

Is buying an email list a way to grow faster?

Purchased lists rarely come with valid consent for your business, and sending to them can breach CASL. They also inflate your contact count. See the CASL guide.

Are text messages priced the same way?

SMS is usually priced per message or by credits, often as an add-on. CASL applies to commercial texts as well as emails.

Sources

• Canadian Radio-television and Telecommunications Commission — CASL guidance on consent and unsubscribe mechanisms
• Justice Laws Website — the text of Canada's Anti-Spam Legislation (S.C. 2010, c. 23)
• Office of the Privacy Commissioner of Canada — retention and disposal of personal information under PIPEDA