Regardless of the platform chosen for an online store (such as Adobe Commerce, formerly Magento2, Shopify, Bigcommerce, etc.), emails must be sent to customers or subscribers.
Typically, online businesses will send two types of emails: Transactional and Marketing emails.
A clear understanding of the differences between them is crucial, as it can significantly aid in reducing costs.
What is transactional email?
Transactional emails, sent to current customers, encompass a variety of communications such as password reminders, order confirmations, shipping notifications, and back-in-stock alerts.
Transactional emails are purely informational and are essential for customer communication.
Unlike marketing emails, they do not promote products but rather carry important information to the customers.
What is marketing email?
On the other side marketing emails are the opposite of transactional emails, carrying promotional messages to customers.
These include sales promotions, announcements of new arrivals, discounts during holiday seasons like Christmas or Black Friday etc.
Based on our experience, companies typically send out 2-4 marketing emails per month.
The frequency depends on various factors such as the size of the customer database, product range and frequency of new arrivals.
Important – Sending promotional emails to cold lists, though not common for online stores, requires attention when attempted. It’s crucial for maintaining a low spam rate through processes like email verification and sender domain warming. This practice is vital when reaching out to potential audiences who are not yet customers.
What email delivery service shall I use?
Email delivery providers are often selected based on budget size, but brand impact is significant.
Adobe Commerce (formerly Magento2) supports Mandrill out of box for transactional emails and Mailchimp for promotional emails.
This support is a major reason why many online store owners who use Magento2 opt for Mailchimp.
Important: Setting up an email delivery provider is a relatively simple process that usually takes a few hours, allowing for migration from services like Mailchimp to alternatives such as Sendgrid or Mailgun.
This task isn’t straight necessary when sending technical requirements to your development team and can be addressed later.
If understanding and implementing becomes a challenge for a store owner, outsourcing to a freelancer or agency is always an option.
For instance, one of our customers opted for Mailchimp for their email sending needs. Let’s explore the pricing of Mailchimp when connected to a Magento2 store.
Important: The cost of email sending is independent of the ecommerce platform used. Therefore, whether one chooses Shopify, Magento, or BigCommerce, the pricing for email sending remains consistent.
What are the fees for mailchimp and how to reduce costs significantly for promotional emails?
Mailchimp fees are transparent and available on their website in the pricing section. They calculate fees based on the number of contacts you use on their platform, where contacts can be either subscribers or purchasers from your online store.
But let’s go with life examples.
Important: Not all customers in your current database will consent to receive promotional emails. Therefore, it is crucial to utilize segmentation and ensure that promotional emails are sent only to customers who have opted in for such emails.
UK Online store Adobe Commerce ( Former Magento2)
One of our customers store is counting 13954 products (including product variations) and an audience of 225 Recipes for promotional emails.
Their email marketing strategy lacks frequent dispatch, so the standard Mailchimp plan for ‘500 contacts’ suffices.
Including transactional email costs for Mandrill (part of Mailchimp), their monthly expenses amount are approximately $48 (converted to GBP in the image above).
The plan doesn’t include email verification service which makes the price even higher for the kind of only 150 contacts.
If you go along with mailchimp you will need to pay extra fees for email verification service that will additionally extend the costs. This is what most of new store owners aren’t aware of.
Important: Email verification service is essential for managing of cold lists since it will reduce bounce and spam rate significantly which at the end will improve the email delivery rate.
Now let’s see another store that invests into promotional email a bit further.
USA Online store runs on Adobe Commerce ( Former Magento2)
Now let’s see a store that counts 5288 products but where the company employs a wise strategy in managing its audience. On average, 2-4 promotional emails are sent out monthly. During the holiday season, this frequency typically increases to 6 per month, including promotional emails for last-minute deals.
Their recipe audience counts 72,067 contacts where 39,671 of these are subscribed.
This is where the Mailchimp pricing goes up dramatically high!!!
Store owners who understand the potential benefits of a well-executed email campaign can see the average costs depicted in the image below, assuming Mailchimp is their chosen email service provider:
As you might notice the transactional email plan pricing remains same, but marketing email plan will substantially increase .
Typically, companies of this scale are less concerned about these prices, as their marketing email efforts significantly boost sales throughout the year, especially during the holiday seasons.
But let’s think in numbers, let’s imagine that we have such an audience which equals 7050$ annually and let’s imagine that we can reduce cost to let’s say $900 annually…would that make sense?
Is it possible and what exactly can I do to reduce my costs for promotional emails delivery to 87% in pricing?
The good news: Indeed it’s possible.
How? Agencies that manage email marketing for multiple clients, whether online store or business owner will send out substantial email volumes on a daily/monthly basis, will be eligible for special discounts.
We have partnered with Mailgun, an email service provider similar to Mailchimp. Our clients are permitted to send up to 450,000 emails daily, with no limitations on the number of contacts. The monthly price remains fixed at $90 per month.
Now, if we calculate the annual cost, which amounts to $900 for a fixed monthly price of $90, you may wonder if it’s worth considering a change in your email delivery service provider.
In my opinion, the answer is a resounding ‘Yes’.
Last but not least
When utilizing our system or any other email delivery system, it’s essential to avoid spamming your audience.
Ensure that you verify your emails before sending them and closely monitor the spam rate for major public email services such as Google, Yahoo, and Hotmail, which are significant players in the industry.
Failure to provide value to your audience and build trust can lead to a decline in your sending authority. Losing this authority can make it extremely challenging, if not impossible, to regain.
You are always welcome to hand over the work to professionals.
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