The company I work for sends  a lot of newsletters. It's an important part of our business model, a revenue driver, and a significant cost. We've switched providers twice since I came on board. Our first provider (I can't even remember the name) was one of the "old school" services--not very polished, not terribly expensive--but, well, we got what we paid for.

We switched over to Campaign monitor because we felt the delivery rates at the initial service just weren't cutting it. Campaign Monitor proved to be an incredible service. It had a fantastic API, allowed us to segment and target our list in multiple ways, and had very high delivery rates. Unfortunately, it was rediculously expensive:

Our mailing list has about 80K subscribers and we send about 3 newsletters a week. That makes for (3 per week * $5) + (3 per week * 80K subscribers * $.01) = $2415 per week or around $10,000 per month. Now, in fairness, they offered prepayment/bulk discounts that would allow you to lower the $.01 per email figure down to $.006-$.007 per email but that required you lay down $10-20K all at once. Very few small companies can do that.

We switched over to Constant Contact because they offered all-you-can-send (within reason) packages priced according to the mailing list size:

For our list of ~80K subscribers we pay about $450 per month. Compared to the best-case, super bulk pricing of Campaign Monitor, it was about 1/3 the price. The switch easily saved us $15,000-$20,000 a year

Unfortunately, well, you get what you pay for. Constant Contact isn't a bad service, it just isn't as polished as Campaign Monitor. They have a good API but some of the Campaign Monitor tools and features just aren't there. We had to make some sacrifices and work arounds.

I'm not changing mailing list providers again. Constant Contact is fine, they have good customer service, and their price is competitive. So competitive in fact, that the entire industry seems to be heading that way. Mailchimp's pricing structure is eerily similar:

So how does Campaign Monitor survive when their prices are so much higher than the others? They don't, they adapt. Here is their new pricing structure:

It's still a bit more expensive at certain price points but hey, you get what you pay for! I'd gladly pay their slightly higher prices for their (atleast slightly) better product but the switching costs are too high so I'm staying put.