- SMEs with an email bounce rate of 6% are typically losing £13,050 per year
- Email Marketing is generating more than £30bn of retail sales in the UK alone
- UK SME mailing list quality increased in 2017
Email is one of the most lucrative tools in any business’ marketing kit, generating more than £30bn of retail sales in the UK alone every year. However, new research by next-generation email verification and list hygiene platform, EmailVerifier.com, has shown that that figure could easily be increased if companies worked harder to improve the quality of their mailing lists. Some SMEs are losing a staggering £13,050 per annum, thanks to a 6% email bounce rate. While 6% might seem quite a high figure, post-GDPR, it will be of concern to many businesses to know that even a 1% bounce rate could be costing their company £2,025 annually.
Average bounce rates vary per Industry but what we typically see is sub 1% bounce rates and average overall industries of 0.44%. The Industry accepted rate is 2% and anything above that will start raising questions over your email list quality. Reaching 5% would most likely mean a suspension of your ESP (email service provider) account for new users with no reputation or history of good standing.*
Table 1: How much businesses could be losing based on bounce rate percent.
|Bounce Rate||Cost per UK SME per annum|
The chart below demonstrates the impact that each additional percentage point of bounced emails can have on a business.Yearly Lost Revenue VS Bounce Rate (Per 1000 GBP Spend)
While such significant financial losses are bad news for any business, a high email bounce rate has other potential repercussions. With a direct correlation between email bounce rate and spam trap activation as seen on the chart, companies with lower quality mailing lists are in real danger of IP address and domain name blacklisting.
Based on data from Return Path, The user Sender Score and in turn deliverability is adversely impacted as an email campaign hits more Spam Traps. Typically 90%+ deliverability are met by companies that hit less than 1 Spam Trap over their campaign. If a campaign meets 1-2 spam traps the delivery rate will be materially decreased as your Sender Reputation turns into shambles. Any Company meeting 6-7 Spam Traps can say goodbye to the Inbox as deliverability touches 0.
Spam Traps are usually met when companies use list building methods that are not adhering to best practices of Opt-in and Double Opt-in procedures as well as list maintenance by frequently emailing your list to keep them warm.
What causes a high email bounce rate?
A company’s email bounce rate is the result of having ‘unknown users’ on their mailing lists. An unknown user is an email address that either never existed, has been terminated by the mailbox provider, or was abandoned by the mailbox user. Mailbox providers will return a hard bounce code (5xx) indicating when email is sent to an unknown user. Senders who not only retain unknown users but send to a high percentage of them are perceived by mailbox providers as having poor list hygiene practices, which will impact their sender reputation. And it’s this that can result in business’ mail being caught in the spam folder and never reaching the inbox. Inactive / Unknown email accounts are many times converted by ESPs to spam traps. Why would a business with good practices keep sending email to an email account 3 years after inactivity? Unless that email address was scraped, or the list was purchased.
In order to avoid the threat of spam traps, email senders need to maintain a high sender reputation ranking of 90+. To do this, they need healthy, well-maintained mailing lists, with no more than 1% unknown users. Companies with a 6% bounce rate typically have a sending reputation of below 80, which means that the likelihood of them being caught in the spam folder or hit spam traps and get blacklisted is significantly higher.
Senders in 2017 maintained a higher list quality than the previous year, with each band seeing a decrease in average unknown rate.
Founder of EmailVerifier.com, Marios Italos, comments:
People often underestimate the importance of maintaining and verifying their company email lists. It’s easy to think that the more messages you send, the more likely they are to generate a response. That’s what triggered the data buying and selling boom of the early 2000s. But it doesn’t work like that, it never has.
Previously, if you sent out an unwanted email, you were simply wasting your time – and the money you’d spent acquiring the address. Now, with numerous regulations – including GDPR – in place, businesses can seriously risk their viability by failing to take a few simple precautions. Our hope with this research is that in showing the very real financial risks associated with poor list management, we’ll be able to steer companies away from the other, equally damaging, threats that poor list hygiene can bring.
EmailVerifier.com is a next generation email validation and list hygiene tool. Through the use of a sophisticated algorithm sequence, EmailVerifier helps users to define if an email address exists and is able to receive email. It will also remove emails that are deemed high risk, are associated with spam activities, or pose a high risk to bounce emails sent to them. The above process ensures that user’s email sending reputation remains at its highest level, leading to higher email inbox rates, higher engagement and thus higher ROI in email marketing and customer relations strategies. The real time API provided by EmailVerifier.com can also be used as an extra validation feature on user’s websites or apps, to aid with the collection of valid leads in real time, preventing loss of customers due to mistyped emails or bad mailboxes.
* Industry specific stats can be seen here https://mailchimp.com/resources/email-marketing-benchmarks/