The True Cost of Delivering Email

“The cost of postage to go up yet again”

We’ve all seen the headlines, although this bad news story doesn’t even make the papers anymore.

All businesses want to migrate from physical mail to email as quickly as they can for essential communications such as bills, statements and other advices. But how do you select the right email platform to use? Unfortunately, decisions are often made primarily on price and perceived available resource to implement.?There are very real consequences as a result.

There are now a host of email platform options available, with big international players like Mailchimp, Mailjet, Messagepoint, SendGrid and SparkPost, offering email pricing at fractions of the cost to post a letter.

Some businesses are even using their campaign platforms to send out transactional emails. Platforms like HubSpot, Marketo, Salesforce or Vision6. Others use their enterprise Exchange server, their Microsoft 365 instance, or other internal systems to send out their essential customer communications.?These businesses are encountering the following issues:

You can’t contact the big email senders when things go wrong

This is a key frustration and it is why many of our customers initially approach us for help. Have you ever tried to talk to a real person at any of the businesses referred to above? Their cost models are based on self-service, where scale is everything. Your end of month billing run is of no consequence to them. They don’t understand the local ESP (Email Service Provider) landscape and in the end, they don’t really seem to care, even though it’s your cashflow that’s being affected.

Use your internal email service for transactional bulk email based sending at your peril!

We see this quite often. Someone within the organisation with a little bit of knowledge will simply say, “Why not use our existing Exchange environment to send out our weekly or monthly customer batch runs?” ?The issue here is that it’s critical that internal email traffic and bulk runs are segregated. ?What would happen if your primary email domain was blacklisted for some reason? ?This is not unusual for bulk emails and there are ways to deal with this, if you use the right platform and have the right procedures in place.

But what about email delivery rates? They simply can’t be ignored?

We took it for granted that the Post Office would deliver our enveloped mail. The reality was that 99% of the time this was true. Posties were reliable and they knew their routes and, more or less, who was living at what address. But the same can’t be said for email.

There are a variety of reasons why our clients have chosen C9 Transact as their preferred email service, but it really comes down to one very simple point - the delivery rate. There are plenty of organisations that can send emails, which is the easy part. What really counts (the hard part) is successful delivery of emails - otherwise businesses are just wasting effort, time, and money.

Deliverability for essential email as reported by recognised industry commentators such as Litmus and Validity sits somewhere between 85% and 95% and the industry average for essential emails, hovers around 90%. If it’s an invoice, an important reminder or renewal the vital thing to focus on is: what about the 10% of emails that don’t get delivered?

NB: Hard bounces (typically email address does not exist) are excluded from industry stats

C9 Transact guarantees a 99.5% delivery rate. Our last 90-day rolling average was 99.90% delivered, across our many customers. Based on an average sized enterprise biller-based business sending out 50,000 emails per month or 600,000 per year, this guarantee represents 57,000 more emails delivered, when compared to the industry average. That’s 4,750 customers a month who don’t get the email when other services are utilised for final delivery!

NZ based Cumulo9 charge more than the big international email senders. Yes, that’s true but the reality is that the email sending cost is trivial compared with the average invoice value, and the impact on revenue collection when the emails don’t get through. Or the consequence of a reminder notice, or an important renewal not being received. Or the resource cost to correct non-delivery of essential electronic messages.

Set-up an automated default process to deal with bounced (hard and soft) emails

It’s important to work with your email service provider to gain reporting information regarding your hard and soft bounces. The reason for the bounce is critical if you are going to use another channel to reach your customer. For example, you need to insert a “please update your contact details” note with the bill or notice, if you are going to use enveloped mail, as you will want to quickly re-establish the email-based method of communication. Here is a typical workflow.

The cost of non-delivered emails

It is relatively easy to identify the direct (above the line) costs associated with managing non- delivered emails. There is the cost of sending an SMS, that is, if you know the customer’s mobile phone number. There is also a cost to print the item and then send it out through the mail. ?

While these costs mount up and are not insignificant, typically these “above the line” costs only represent around 15%-25% of the total cost as the more substantial costs are hidden below the line.

They include the resources required to manage the default process, the revenue implications, handling customer queries, and updating customers’ information. In addition, there is the impact on customer experience (CX) as well.

Based on the above, for an essential email communication, a very conservative estimate of the total cost for non-delivery of an email sits somewhere between $0.75 and $1.25 per email (cash-flow implications are excluded.)

Taking a mid-point of $1.00, the table below shows the estimated cost and associated financial impact to the business referred to above sending out 600,000 invoices per year (50k / month).

The difference between the Upper Quartile and C9 Transact is $27,000.?That equates to $0.045 per email.?So if you’re paying $0.01 per email, in reality you’re paying $0.055 and having to wear the time, effort and cost of additional communication with 30,000 customers!

If you are in the Lower Quartile (15% non-delivered) that’s like paying 15.5 cents for every email sent!

Why is the email delivery rate so low for most email service providers?

Cumulo9 have been able to prove that with the right processes in place email delivery rates can be substantially increased. Some of the key focus areas for C9 Transact include:

-????????The creation and ongoing support of adaptive re-try algorithms;

-????????Always sending the email from a an email domain that is trusted locally;

-????????Incorporating the latest email security features e.g. SPF, DKIM and DMARC;

-????????Throttling email sends to certain ESP’s;

-????????“Warming-up” secondary IP addresses and sending domains that might be needed from time to time;

-????????Making sure that HTML used in messages is valid, responsive and email ready;

-????????Checking the email for rendering;

-????????Using email optimised images and graphics; and

-????????Quickly dealing with ESPs whenever there is an issue – it is essential to know who to talk to.

Another significant challenge senders face is the frequency with which customers are now changing their email addresses.

A recent Australian survey found that due to changing ISPs, switching jobs, or just trying to out-run the spammers, one in three people (33%) change their email address every year. It’s critical that if an email fails due to a “hard-bounce” that there is a fully automated process in place. It’s for this reason that Cumulo9 provides easy-to-deploy “default” to SMS or enveloped mail processes.

Summary

Sending batches of emails should be as simple as a bulk mail delivery to NZ Post. But you need a trusted service provider and a business that will be available to respond should things go wrong.

The big problem is that people just assume that all email services are the same. In summary dealing with international email service providers is not recommended for business-critical communications like bills, statements, and renewals.

If you would like to know more about the Cumulo9 C9 Transact service that’s already delivering a large share of New Zealand’s “essential” email communications, simply contact the author at the address below.

David Allen [email protected] Ph 021484167