According to recent research from Mailtrap:
- U.S. businesses lose a daily average of over 164 million dollars to undelivered emails.
- The industries of Finance & Insurance and Telecoms rank in first and second place respectively, with a calculated loss of over $213 and $204 million on average.
- Among the main reasons why companies suffer this financial loss are damaged sender reputation, improper configuration of email security protocols, poor email list management and spammy email content.
How much money do businesses lose due to undelivered emails?
For businesses in the US, the cost of undelivered emails is:
- $164+ million daily
- $1.1+ billion weekly
- $4.9+ billion monthly
- $59.5+ billion yearly
The numbers above are the result of analyzing multiple statistics, including the average deliverability in the US, revenue per email, and daily number of emails sent.
“The best return on investment”, “$40 for every dollar you invest” are just some of the things you’ll hear online about email marketing. And while all these statements are true, what’s also true is that deliverability, or lack thereof, to be more specific, costs email marketers worldwide millions every day.
So, exactly how big is this financial damage? Let’s do some math!
Okay, so, in the US, the average deliverability is 84.6%.
The revenue per sent email, while different depending on the industry, is $0.11 on average.
Now, to calculate how big the daily loss might be, we also need the daily number of emails being sent. According to Statista, in the US, that number is 9.7 billion.
If we now take the daily number of emails sent and multiply it by the average revenue per email, we get a $1.067 billion of potential daily revenue. 15.4% of the emails used in that calculation don’t ever reach the inbox (average deliverability is 84.6%, remember), meaning that email senders have a combined daily loss of $164+ million.
Quite a concerning number, right? What’s even more concerning is that emails get undelivered every day, so if we multiply the daily loss by the number of days in a year, the potential yearly loss sits at a staggering $59.5+ billion. Yikes!
Do all industries suffer the same financially?
Okay, it’s evident that the financial losses due to undelivered emails can be catastrophic. However, not all industries suffer the same, and there are two reasons why:
1. Revenue per email varies from industry to industry due to factors such as audience engagement, personalization, relevancy of offerings, promotions, brand loyalty, etc. Here’s Klaviyo’s breakdown of revenue per email across different industries:
2. Just like revenue per email, email deliverability also varies from industry to industry. Validity.com studied email deliverability across industries and broke down the numbers as follows:
Across the studied industries, you can see one trend the more emails end up in spam folders, the bigger the loss:
- Finance & Insurance: $213,400,000
- Telecoms: $204,864,000
- Business Services: $177,122,000
- Nonprofit Organizations: $176,055,000
- Manufacturing: $163,251,000
- Retail: $131,241,000
- Software: $116,303,000
- Education: $112,035,000
- Consumer Services: $109,901,000
- Healthcare: $108,834,000
- Construction: $97,097,000
- Holding Companies: $89,628,000
- Travel & Hospitality: $58,685,000
- Media & Internet: $54,417,000
- Real Estate: $30,943,000
But there are some interesting exceptions, like in healthcare and software. So, are there other reasons causing emails to go undelivered to customers? Yes! And we’ll cover them now!
Reasons emails are not being delivered
Poor or damaged sender reputation
Sender reputation is made up of your IP reputation, which is the measure of trustworthiness an IP has based on its sending history, and your domain reputation, which is the measure of trustworthiness of an email-sending domain based on things such as engagement, spam complaints, and bounce rates.
If your email sender reputation is stellar, reaching the inbox won’t be a challenge. But if your reputation is poor, ISPs are very likely to mark your emails as spam or block them altogether.
Case example: A company buys an email list with invalid email addresses and recipients who haven’t opted in. As a result, a large number of the company’s emails bounce back or get marked as spam, plummeting the sender reputation. With a damaged sender reputation, ISPs begin to block the company’s emails or simply send them to the spam folder.
Email security
Authentication protocols such as SPF, DKIM, and DMARC serve to verify the legitimacy of a sender and, with that help prevent spoofing and phishing attacks. So, if your DNS records are properly configured, your emails should also be authenticated and under less risk of being marked as spam or blocked. In the scenario when your DNS records aren’t configured, receiving servers will most certainly reject your emails.
Case example: A software company sends a critical update notification email but fails to configure DMARC prior. Without DMARC, internet service providers suspect that the company’s emails are being spoofed and the urgent notification never reaches senders.
Poor email list management
An email list that undergoes effective management is regularly cleaned and updated so it doesn’t contain inactive, invalid, or harmful addresses. If this management is not done regularly or at all, high bounce rates are almost inevitable.
Case example: Marketers who purchase email lists or build their own without verifying the subscriber quality and then use these lists to send emails generally suffer from high bounce rates and low engagement. To internet service providers, this is a signal to mark their emails as spam, thus reducing their deliverability.
Email service provider spam filters
Spam filters are the wall between users and unwanted emails. By analyzing email content, sender reputation, and engagement patterns, these filters are able to determine if an email should be let through to a recipient’s inbox or sent to the spam folder.
Case example: If a sender’s emails are often ignored or even deleted, email service provider spam filters will notice these behavioral patterns. As a result, and due to this poor user engagement history, legitimate emails sent by this sender will likely be treated just like spam.
Spammy content
Excessive use of exclamation marks, all caps, and links as well as using misleading subject lines are dead giveaways of spammy content. Along with that, attachments with large file sizes or uncommon file types cause an email to appear untrustworthy and deserving of the spam folder.
Case example: Any promotional emails with subject likes such as “FREE MONEY!! CLICK HERE!” will trigger spam filters and fail to reach most inboxes.
Inconsistent sending volumes and schedules
Fluctuating sending volume patterns and dramatic increases in sending volume are behaviors often associated with spammers. In the same way, changing sending schedules may make you look suspicious, as spammers will send emails at irregular intervals to avoid detection.
Case example: Depending on the business type and size, sending either 1000 or 50000 emails at once may look completely normal if done consistently. On the other hand, jumping from 1000 to 50000 recipients in a very short period of time will be seen as an unusual spike by internet service providers, and you might be labeled a potential spammer.
Poorly managed email service
Frequent downtimes, inadequate infrastructure with outdated servers or insufficient bandwidth, and limited API calls are just some of the characteristics of an unreliable email service. Such services disrupt email delivery and harm sender reputation.
Case example: You hire an email service provider that has frequent downtimes. With each downtime instance, the delivery of your emails is delayed, or they don’t get sent at all.
