The Cost of Undelivered Emails for Businesses in the US: A Detailed Breakdown

On July 04, 2024
8min read
Dzenana Kajtaz Technical Content Writer @Mailtrap
This is a featured image for an article on the cost of undelivered emails

The average marketer sends 2-3 emails a day. The average marketer also expects that the emails they send will eventually get to the intended recipients.

Combine this frequent sending with the false assumption that all emails reach their destination, and you’ve got yourself a sticky and costly situation.

In this article, we explore just how costly the problem of undelivered emails can be and give you advice on how you can avoid a potential financial disaster.

Interesting facts:

  • By 2027, the global email marketing market is projected to be valued at 17.9 billion.

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.

This is an image showing a chart of the potential loss vs potential gain due to undelivered emails

“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:

This is an image showing Klaviyo’s breakdown of revenue per email across different industries

2. Just like revenue per email, email deliverability also varies from industry to industry. studied email deliverability across industries and broke down the numbers as follows:

This is an image showing  email deliverability across industries breakdown

Across the studied industries, you can see one trend the more emails end up in spam folders, the bigger the loss:

  1. Finance & Insurance: $213,400,000
  2. Telecoms: $204,864,000
  3. Business Services: $177,122,000
  4. Nonprofit Organizations: $176,055,000
  5. Manufacturing: $163,251,000
  6. Retail: $131,241,000
  7. Software: $116,303,000
  8. Education: $112,035,000
  9. Consumer Services: $109,901,000
  10. Healthcare: $108,834,000
  11. Construction: $97,097,000
  12. Holding Companies: $89,628,000
  13. Travel & Hospitality: $58,685,000
  14. Media & Internet: $54,417,000
  15. 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.

This is an image showing a table with the breakdown of the potential loss due to undelivered emails

What can your business do to stop losing money due to poor deliverability? 

Let’s be honest, an occasional email bounce or getting the spam label is going to happen to everyone. Even if you’re just sending out birthday invites to your closest relatives (My uncle Tom never seems to give out the correct email address…). But since every failed email delivery has its cost, it’s important we discuss how to minimize this cost by improving your deliverability.

As our friends at Niceboard have essentially mastered the art of good email deliverability, we’ll first share a quote from them on what they did to achieve this.

“At Niceboard, we hit an amazing 98.9% deliverability rate by taking a few clever steps with our email strategy—it was like setting up for a grand email party! First, we teamed up with to give our domain a warm-up routine, slowly increasing our email sends to build a solid, trustworthy sender reputation. Then, we beefed up our email security with all the good stuff: DNS, SPF, MX, and DKIM records. It was a game-changer! And for the cherry on top, we made sure every email address was real and in use by keeping our list super fresh and even throwing in some 2FA. This combo helped our emails land right where they should, making sure our customers always feel in the loop and part of the fun!” – Hanna from Niceboard

This is an image showing Niceboard's deliverability metrics

Now, onto some practical advice!

Poor or damaged sender reputation 

Improving a poor or damaged sender reputation requires a multi-faceted approach. So, begin by cleaning your email list to remove inactive or invalid addresses. Then, implement a double opt-in for new subscribers to ensure genuine interest, and regularly analyze your email metrics like open and click-through rates to fine-tune your approach. Lastly, make sure you gradually increase email volumes on new IPs to build ISP trust, ensure compliance with anti-spam laws, and always provide a clear unsubscribe option.

Email security 

To ensure your emails are secure and trusted by receiving servers, it’s important to implement key authentication standards effectively. This entails setting up a solid SPF record, incorporating DKIM to cryptographically sign your emails and ensure that the content remains unchanged from the point of sending, as well as establishing a DMARC policy to guide receiving servers on how to handle emails that don’t pass SPF or DKIM checks. 

Poor email list management 

Maintaining a high-quality email list involves regularly reviewing and cleaning it by removing outdated or inactive addresses. For that reason, keep an eye on engagement metrics like open and click rates to distinguish active subscribers from those who no longer interact with your emails. Additionally, by using an email verification tool during the sign-up process, you can check the validity of new entries.

Email service provider spam filters 

If email spam filters seem to have it out for your emails, reconsider how relevant and valuable the content of those emails is. Or maybe even add a dash of personalization to enhance user engagement. Along with that, cleanse your email list of inactive or unengaged subscribers, monitor feedback loops, promptly address spam complaints, and have strong email security.

Spammy content

Followed the advice above but the spammer label still haunts you? Maybe it’s your content! So, try sticking to clear, professional content and ensure your emails appear trustworthy. Limit the size and type of attachments and use common, trusted file formats. And lastly, always test your emails for spammy characteristics before sending them out.

Inconsistent sending volumes and schedules 

To avoid looking suspicious, keep your email sending volumes consistent. When necessary, gradually increase your email volume over time instead of sending large batches suddenly. When it comes to your sending schedule, maintain a regular one and avoid erratic patterns. 

Poorly managed email service 

Poor email service management isn’t your fault, so don’t let it harm your deliverability. Instead, choose a reliable email service provider with robust infrastructure, minimal downtime, and sufficient API call capacity.

Do keep in mind that when it comes to your choice of email infrastructure, you can go one of two routes –  managed or unmanaged infrastructure.

With unmanaged infrastructures, you have complete control and flexibility over your systems, allowing for custom configurations tailored to your specific needs. However, this option requires more hands-on management, including handling maintenance, updates, and troubleshooting. 

Managed infrastructures, on the other hand, are superior because they enhance scalability and analytics. With managed services, scaling your operations is seamless and efficient, allowing your business to grow without the typical headaches associated with infrastructure expansion. Additionally, these infrastructures provide advanced analytics tools, offering deeper insights into performance and enabling more informed decision-making. 

This combination of easy scalability and robust analytics is offered by the Mailtrap Email Delivery Platform and its Email API/SMTP tool. 

When using Email API/SMTP, devs get a stable email infrastructure for email sending with high deliverability rates by design as well as email performance monitoring. 

This is an image showing the Mailtrap Stats Overview page

Simply choose what you need for your project – RESTful API or SMTP Service – and complete a secure domain setup and verification process to start reaching recipients’ inboxes within seconds using Mailtrap!

Did you receive our message?

In this article, we did our best to inform you how financially devastating poor email deliverability can be and gave you some tips on how to stop losing money. 

Now, the ball is in your court! 

For your course of action, we suggest starting with an email deliverability audit to uncover the key issues that might be affecting your email performance. Then, develop an email deliverability improvement plan (alone or with an expert) so you can implement all the necessary changes in time!

For more useful content on email deliverability, make sure to check out the Mailtrap blog and YouTube channel!

Article by Dzenana Kajtaz Technical Content Writer @Mailtrap

I’m a Technical Content Writer with an educational background in software engineering and 4 years of experience as a writer, editor, and content marketer. Currently, I mainly focus on writing about email infrastructure, sending, testing, and so on, but I do love creating fun and engaging content on email marketing topics as well.