Summary
Calculating the monetary value of email deliverability is crucial for demonstrating its impact on revenue and justifying investments in deliverability resources. It moves email deliverability from a technical concern to a strategic business driver. While direct calculation can be complex, various methods and considerations help quantify its financial importance, primarily focusing on lost revenue from undelivered emails and the broader efficiency of your email marketing efforts. Understanding your organizational costs of undelivered email is a foundational step.
Key findings
- Missed revenue: The most direct approach involves quantifying lost revenue from emails that do not reach the inbox. This can be estimated by multiplying the number of undelivered emails by the average revenue generated per delivered email.
- Wasted budget: If emails fail to reach the inbox, the entire cost associated with their creation and deployment, including content development, design, and platform fees, is essentially wasted. This highlights how email deliverability impacts your marketing ROI.
- Engagement metrics correlation: Deliverability directly influences key metrics like open rates, click-through rates, and conversion rates. Improving deliverability can lead to proportional increases in these metrics, which then translate into higher revenue.
- Long-term sender reputation: Consistent good deliverability builds a positive sender reputation, reducing the likelihood of future blocklisting (or blacklisting) and ensuring sustained access to the inbox, which has an ongoing financial benefit.
- Impact on customer lifetime value: Reliable email communication contributes to customer retention and engagement, directly influencing customer lifetime value and repeat purchases.
Key considerations
- Attribution modeling: Accurately attributing revenue to email campaigns requires sophisticated tracking and attribution models. It is essential to ensure that the revenue calculation directly reflects the impact of email deliverability.
- Baseline establishment: To show improvement, you need a clear baseline of your current deliverability and associated revenue metrics. Regularly measuring email deliverability and inbox placement rates is key.
- Marginal gains: Even small increases in inbox placement rates can lead to significant revenue gains when applied across large send volumes. Use an email deliverability calculator to project potential impact.
- Preventative value: The value also lies in preventing future deliverability issues that could severely impact revenue. This proactive approach avoids costly remediation efforts and revenue dips.
What email marketers say
Email marketers often approach the monetary value of deliverability from the perspective of direct revenue impact and the efficiency of their campaigns. Their discussions frequently revolve around how lost inbox placement directly translates into lost sales and missed opportunities. They emphasize the importance of understanding the revenue generated per email or per subscriber to highlight the financial consequences of deliverability issues.
Key opinions
- Revenue extrapolation: Many marketers calculate value by comparing past performance at specific domains (when deliverability was good) to current performance, extrapolating lost revenue from decreased inboxing.
- Email marketing budget validation: If an email doesn't reach the inbox, all investment in that email (content, design, ESP fees) is wasted. Therefore, the value of deliverability can be seen as the protection of the entire email marketing budget.
- Revenue per email in inbox: A common metric is calculating the average revenue generated per email that actually lands in the inbox. This directly links deliverability to financial outcomes.
- Consideration of ESP support: The effectiveness of an Email Service Provider's (ESP) deliverability support and troubleshooting services should be factored into the overall value proposition of maintaining good deliverability.
- Impact on KPIs: Deliverability impacts key performance indicators (KPIs) like open rates, click rates, and ultimately, conversion rates, which are direct drivers of revenue.
Key considerations
- Tracking granular data: Marketers need to track email performance at a granular level (e.g., per domain or mailbox provider) to accurately identify deliverability issues and their associated costs. This helps to monitor email deliverability trends.
- ROI for specific initiatives: When trying to justify investment in a deliverability specialist or tool, it is important to project the potential savings from preventing issues or the revenue uplift from improved inbox rates. Tools like an email revenue calculator can assist.
- Influencing business practices: The true value lies in how deliverability efforts influence overall business practices that impact email performance, rather than just isolated metrics.
- Hidden costs of poor deliverability: Beyond direct revenue loss, marketers recognize the hidden costs like decreased brand reputation, customer churn, and increased support tickets due to missed communications.
Marketer view
A marketer from Email Geeks explains that their team analyzed the average value of a subscriber at a specific domain where their emails were reliably landing in the inbox. They then applied this value to the number of subscribers at other domains where they were experiencing poor inbox placement, revealing significant missed revenue opportunities.
Marketer view
An email marketer from Email Geeks suggests a straightforward argument: every dollar spent on an email program is wasted if the email never reaches the recipient's inbox. Therefore, the value of deliverability is equivalent to the entire email marketing budget, as it ensures that investment is not lost.
What the experts say
Deliverability experts consistently highlight the critical, yet often complex, link between email deliverability and an organization's bottom line. They emphasize that while direct monetary calculation can be challenging, the strategic importance of ensuring emails reach the inbox cannot be overstated. Experts view deliverability as a protective function, safeguarding revenue and brand reputation, similar to how an insurance policy or regular maintenance prevents larger, more costly problems.
Key opinions
- Program importance: The decision to invest in a dedicated deliverability resource largely depends on how substantial a share of a company's revenue is derived from its email program. If email is a primary revenue driver, the investment makes strong business sense.
- Preventative role: Calculating the exact value of a deliverability role is difficult, akin to valuing a car service plan. Its worth lies in preventing issues and mitigating the impact of major problems, rather than guaranteeing absolute success. A key part of this is understanding the impact of a domain blocklist.
- KPI derivation from own data: Deliverability KPIs (Key Performance Indicators) can be effectively derived from standard marketing KPIs such as open rates, click rates, bounce rates, and complaint rates, especially when broken down by domain or Mailbox Provider.
- Value of a go-to person: Having a single person who understands the fundamentals of reputation, authentication (like DMARC, SPF, and DKIM), and postmaster pages is invaluable. This knowledge base helps prevent issues before they escalate into revenue-impacting problems.
- Proactive monitoring: Consistently monitoring deliverability and addressing issues promptly saves significant costs in the long run. The quantitative impact of technical implementations like DMARC on email deliverability is a strong indicator of value.
Key considerations
- Long-term payoff: While immediate ROI is hard to quantify, investments in deliverability typically pay off over time by ensuring program stability and maximizing the reach of campaigns.
- Internal versus external expertise: Companies must weigh the benefits of an internal deliverability professional with deep business understanding against external consultants providing impartial advice. Both models have their own cost structures and value propositions.
- Training and development: An experienced deliverability person isn't always necessary; someone dedicated to learning the basics of reputation, authentication, and postmaster pages can become highly valuable over time, often through community support.
- Mitigating blacklist impact: Experts are key in responding to a domain or IP address being listed on a blocklist (or blacklist), preventing prolonged deliverability issues and associated revenue loss. Prompt action can significantly reduce the impact of an unknown email blacklist.
- Monitoring tools: While internal data is paramount, good tools can provide additional data points to connect all the dots and offer a more comprehensive view of deliverability health.
Expert view
A deliverability expert from Email Geeks notes that whether hiring a dedicated deliverability person makes sense depends entirely on the email program's importance to overall revenue. If email drives a significant portion of income, then the investment is strongly justified.
Expert view
An expert from Email Geeks draws a comparison between hiring a deliverability professional and adhering to a car service plan. They explain that while neither guarantees zero issues, both significantly reduce the risk of major problems, making it difficult to quantify precise value but clear in its preventative benefit.
What the documentation says
Technical documentation and industry research provide the foundational metrics and methodologies for understanding and calculating email deliverability's monetary value. They often detail the formulas for key metrics, benchmark data, and the technical aspects that underpin successful email delivery. This information is crucial for establishing a data-driven approach to demonstrating deliverability's financial impact.
Key findings
- Delivery rate calculation: The email delivery rate is calculated by dividing the number of successfully delivered emails by the total number of emails sent, then multiplying by 100. This is the starting point for understanding how many emails even have a chance to generate revenue.
- ROI formulas: The basic formula for email marketing ROI is (Total revenue from email - Total email costs) / Total email costs. Deliverability directly impacts the 'total revenue from email' component by affecting inbox placement.
- Subscriber value: Documentation often points to the calculation of 'revenue per subscriber' (monthly email revenue divided by number of subscribers) as a key indicator. Poor deliverability reduces the number of 'active' subscribers able to generate revenue.
- Engagement benchmarks: Industry benchmarks for metrics like click-through rates (e.g., 2%-5%) are provided. Achieving these benchmarks depends heavily on messages first reaching the inbox. Understanding how ISPs track engagement is critical.
- Hidden factors: Documentation may reveal that factors beyond simple bounces, such as spam folder placement or throttling, can significantly impact the 'effective' deliverability rate and thus revenue, even if a message isn't hard bounced. This underscores why your deliverability rate might be wrong.
Key considerations
- Data integration: To calculate monetary value, businesses need to integrate deliverability data with sales and revenue data from their CRM or analytics platforms.
- Cost of poor deliverability: Documentation often quantifies the impact of deliverability issues, such as the estimated percentage of emails missing the inbox (e.g., 43% according to some reports), which translates directly to lost potential revenue.
- Revenue per email calculation: A method to determine revenue per email is to divide the total revenue generated by email by the total number of emails sent that reached the inbox. This metric helps in projecting the value of improving deliverability.
- Advanced metrics: Beyond basic delivery rates, more advanced metrics like inbox placement rate, sender reputation scores (like Sender Score), and DMARC compliance rates contribute to the overall deliverability picture and its financial implications.
Technical article
EmailTooltester.com documentation states that to calculate the email delivery rate, you must divide the number of successfully delivered emails by the total number of emails sent and then multiply by 100. This is a fundamental step in understanding overall email program effectiveness.
Technical article
Mailgun’s blog on deliverability explains that the basic equation to calculate ROI is (Total revenue from email - Total email costs) / Total email costs. This highlights how improving deliverability, which directly impacts total revenue from email, can significantly boost ROI.
Related resources
10 resources
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