How to calculate the monetary value of email deliverability?

Summary

Calculating the monetary value of email deliverability involves various approaches that combine financial metrics, email performance indicators, and cost considerations. Some experts argue that deliverability's value equates to the entire email marketing budget because undelivered emails render the budget useless. Other methods focus on calculating lost revenue due to undelivered emails by measuring the impact on key performance indicators (KPIs) like open rates, click-through rates, and conversion rates. Tools and metrics from platforms like Google Postmaster Tools, Microsoft Sender Support, SparkPost, Spamhaus, and SMTP status codes can help identify deliverability issues and their impact on revenue. Additional factors include extrapolating customer value from previously inboxed domains, considering ESP support and consulting costs, and determining the value of a dedicated deliverability role. A common formula for estimating lost revenue is (volume * average order value) / recipients. Ultimately, calculating the value of deliverability involves identifying the source of deliverability problems, tracking KPIs, and understanding the long-term value of maintaining a strong domain reputation.

Key findings

  • Budget Equivalence: Deliverability's value is sometimes considered equivalent to the entire email marketing budget.
  • Lost Revenue: Lost revenue due to undelivered emails is a primary factor in determining deliverability value.
  • KPI Impact: Key performance indicators (KPIs) like open rates, CTR, and conversion rates are crucial for quantifying the effect of deliverability issues.
  • Platform Data: Google Postmaster Tools, Microsoft Sender Support, and other platforms provide valuable data for assessing deliverability.
  • Reputation Worth: Maintaining domain and IP reputation is critical, as a damaged reputation incurs additional costs to repair.
  • Cost Savings: Identifying and addressing the source of deliverability issues can lead to cost savings by preventing future problems.

Key considerations

  • Data Accuracy: Ensure the accuracy of email volume, average order value, and recipient data when calculating revenue loss.
  • KPI Monitoring: Continuously monitor and analyze KPIs to detect and respond to deliverability issues promptly.
  • Tool Utilization: Effectively use available tools and platforms to track and manage deliverability.
  • Holistic Approach: Consider all factors influencing deliverability, including ESP support, consulting costs, and internal expertise.
  • Strategic Investment: View deliverability efforts as a strategic investment that protects the overall email marketing ROI.
  • Proactive Measures: Implement proactive measures to maintain domain and IP reputation, preventing costly repairs in the future.

What email marketers say
12Marketer opinions

Calculating the monetary value of email deliverability involves quantifying the impact of deliverability on email marketing ROI. This can be achieved by assessing lost revenue due to undelivered emails, examining the effect of deliverability on key metrics like open rates, click-through rates, and conversion rates, and comparing the cost of deliverability solutions with the revenue generated. Several approaches exist, including extrapolating customer value from previously inboxed domains, calculating revenue per email in the inbox, and deriving deliverability KPIs from standard metrics. Identifying the source of deliverability issues and understanding factors like sending reputation, authentication, and engagement are also crucial for determining value.

Key opinions

  • Lost Revenue: Calculate lost revenue by multiplying the number of undelivered emails by the revenue per message.
  • KPI Impact: Monitor open rates, click-through rates, and conversion rates to quantify the impact of deliverability improvements.
  • Deliverability Metrics: Track placement rate, spam complaint rate, and bounce rate as indicators of deliverability performance.
  • ROI Calculation: Determine revenue generated from email campaigns and subtract associated costs, including deliverability tools and services.
  • Hidden Costs: Consider the hidden costs of employing a dedicated deliverability person versus using a consultant.
  • Source Identification: Identify the root cause of deliverability problems to apply cost savings by addressing the source.

Key considerations

  • Extrapolation: Extrapolate the average value of a customer from previously inboxed domains to those where inboxing has ceased.
  • ESP Support: Factor in ESP support, consulting costs, and business practices impacting deliverability.
  • Dedicated Role: Consider the value of a dedicated deliverability person and their impact on preventing issues.
  • Standard KPIs: Derive deliverability KPIs from standard metrics (open rate, click rate, bounce rate, complaint rate) broken down by domain.
  • Reputation: Understand the impact of sending reputation, authentication, and engagement metrics on ROI.
  • Lifetime Value: Measure the value of email marketing by tracking conversion rates and customer lifetime value.
Marketer view

Email marketer from Mailjet Blog explains that to calculate ROI of deliverability efforts, one must calculate lost revenue due to undelivered emails (emails not reaching inbox) and compare that to the cost of deliverability solutions.

July 2023 - Mailjet Blog
Marketer view

Marketer from Email Geeks suggests calculating revenue per email in the inbox and considering factors like ESP support, consulting costs, and the impact of business practices on deliverability. They also highlight the hidden costs of employing someone versus using a consultant.

December 2022 - Email Geeks
Marketer view

Marketer from Email Geeks shares a method used to calculate the value of deliverability by extrapolating the average value of a customer from a domain where they were previously inboxing to the value of customers from domains where they are no longer inboxing.

November 2021 - Email Geeks
Marketer view

Email marketer from Validity shares that measuring the impact of deliverability issues on key metrics, such as open rates, click-through rates, and conversion rates helps in getting an idea of the impact of deliverability as part of the marketing process.

November 2023 - Validity
Marketer view

Marketer from Email Geeks compares a dedicated deliverability person to a car service plan, reducing the risk of issues. They suggest deriving deliverability KPIs from standard KPIs (open rate, click rate, bounce rate, complaint rate) broken down per domain/Mailbox Provider. They also suggest starting by assigning someone to review domain performance and learn the basics of reputation, authentication, and postmaster pages.

April 2024 - Email Geeks
Marketer view

Email marketer from GMass Blog responds that while a hard number for the value of deliverability can be hard to determine, there are metrics like placement rate, spam complaint rate, and bounce rate that provide data points on the value and allow you to see improvements by using deliverability tools.

April 2023 - GMass Blog
Marketer view

Email marketer from TowerData explains that to calculate value in deliverability, an email marketer needs to be able to determine the source of their deliverability issues. This allows them to apply a cost savings based on not having deliverability problems by fixing the source.

August 2022 - TowerData
Marketer view

Email marketer from Litmus responds that understanding factors that impact deliverability, such as sending reputation, authentication, and engagement metrics can affect ROI which can be used to measure value of deliverability.

January 2024 - Litmus
Marketer view

Email marketer from Medium shares that calculating email deliverability ROI is about understanding how deliverability issues affect your email marketing KPIs. They emphasize the importance of tracking metrics like open rates, click-through rates, and conversion rates to quantify the impact of deliverability improvements.

June 2024 - Medium
Marketer view

Email marketer from Neil Patel explains that by measuring the value of email marketing, by tracking conversion rates and customer lifetime value, you can see how much value is added through email which would be lost if deliverability were to fail.

November 2022 - Neil Patel
Marketer view

Email marketer from EmailToolTester notes that better email deliverability allows for better ROI on email marketing and to measure the value of deliverability improvements, you must be able to see the improvements to your email marketing KPI's.

June 2021 - EmailToolTester
Marketer view

Email marketer from SendGrid explains that to calculate the ROI of email marketing (including deliverability), you need to determine the revenue generated from email campaigns and subtract the costs associated with those campaigns (including deliverability tools and services).

September 2022 - SendGrid

What the experts say
3Expert opinions

Calculating the monetary value of email deliverability can be approached in different ways. One perspective equates the value of deliverability to the entire email marketing budget, as the budget is wasted if emails aren't delivered. Another method uses a formula involving email volume, average order value, and recipients to determine the revenue lost due to deliverability problems. A third approach emphasizes the worth of a domain's reputation, stating that a damaged reputation requires additional time and money to repair.

Key opinions

  • Budget Equivalence: The value of deliverability is equal to the entire email marketing budget.
  • Revenue Loss Formula: Use the formula (volume * average order value) / recipients to find money lost due to deliverability issues.
  • Domain Reputation Worth: Deliverability value can be tied to domain reputation; a lost reputation costs time and money to repair.

Key considerations

  • Holistic Value: Consider that without deliverability, the entire email marketing effort is rendered useless.
  • Data Accuracy: Ensure the accuracy of volume, average order value, and recipient data for calculating revenue loss.
  • Reputation Monitoring: Proactively monitor and maintain domain reputation to avoid costly repairs.
Expert view

Expert from Email Geeks argues that the value of deliverability is equal to the cost of the entire email marketing budget, as the entire email program is wasted if the user doesn't see the email.

July 2022 - Email Geeks
Expert view

Expert from Spamresource explains that you can value deliverability by determining the worth of your domain. "Once a domain loses its good reputation, the sender has to spend additional time and money to repair any damage."

December 2024 - Spamresource
Expert view

Expert from Word to the Wise responds that you can determine the value of deliverability using detailed data. "The basic formula is (volume * average order value) / recipients = money left on the table if you have deliverability problems."

July 2023 - Word to the Wise

What the documentation says
5Technical articles

Various documentation sources emphasize the use of data and tools to calculate the monetary value of email deliverability. Google Postmaster Tools allows senders to monitor domain/IP reputation and estimate revenue loss from spam/blocked emails. Microsoft's sender support provides data to assess the impact of deliverability issues and calculate the revenue impact of deliverability tools. SparkPost highlights the use of detailed deliverability metrics (delivery rate, bounce rate, engagement) to measure campaign performance and the effect of deliverability efforts. RFC Editor provides details of SMTP status codes to understand deliverability problems. Spamhaus offers methods to measure IP/domain reputation to see the effects of deliverability issues.

Key findings

  • Reputation Monitoring: Domain and IP reputation monitoring helps identify deliverability issues.
  • Revenue Impact: Data from sender support helps calculate the revenue impact of deliverability problems and tooling.
  • Detailed Metrics: Delivery rate, bounce rate, and engagement metrics are useful for assessing campaign performance and deliverability.
  • Status Codes: SMTP status codes provide key data for diagnosing deliverability problems.
  • IP/Domain Measurement: Spamhaus provides ways to measure IP and domain reputation to identify potential issues.

Key considerations

  • Tool Utilization: Utilize tools like Google Postmaster Tools and Microsoft sender support to gather data.
  • Metric Tracking: Track detailed deliverability metrics to assess campaign performance.
  • Code Analysis: Analyze SMTP status codes to understand the nature of deliverability problems.
  • Reputation Management: Proactively monitor and manage IP and domain reputation.
  • Proactive Approach: Use available data and tools to proactively identify and address deliverability issues to minimize revenue loss.
Technical article

Documentation from RFC Editor details all SMTP enhanced status codes, which can provide key data points for deliverability specialist when dealing with deliverability issues. These help you to see the types of deliverability problems you have.

September 2024 - RFC-Editor
Technical article

Documentation from Microsoft responds that by using sender support, it will give you data that helps you see the impact of deliverability problems on your ability to reach your audience and lets you calculate the revenue impact from deliverability tooling.

September 2022 - Microsoft
Technical article

Documentation from Google Postmaster Tools explains that using its service, by monitoring domain and IP reputation, allows senders to identify deliverability issues and estimate potential revenue loss due to emails being marked as spam or blocked.

September 2021 - Google Postmaster Tools
Technical article

Documentation from SparkPost shares using detailed deliverability metrics, like delivery rate, bounce rate, and engagement metrics, to assess the performance of email campaigns and quantify the impact of deliverability efforts on revenue generation.

December 2024 - SparkPost
Technical article

Documentation from Spamhaus provides ways to measure IP and domain reputation, so a sender can see potential reputational issues that effect deliverability, by looking up IP reputation you can see if any deliverability services are needed to resolve issues.

November 2021 - Spamhaus