Email marketing is not a low-cost marketing solution. While you can start email marketing for free, the monthly costs of using an email marketing platform can increase considerably as your list grows.
The high cost is not an issue for big businesses and companies that fully utilize email marketing and profit from it, but it is a problem for small businesses.
In this guide, you’ll learn how to reduce your email marketing costs and, at the same time, increase the performance of your email marketing campaigns.
How Much Does Email Marketing Tools Cost?
Let’s start by looking at the most popular email marketing platforms and their monthly costs, considering two scenarios. The monthly cost of maintaining a list of 10,000 and 30,000 subscribers.
All platforms use similar pricing schemes. They charge you per subscriber volume and NOT by the number of emails sent. In most cases, this is unlimited.
The table below summarizes the cost for 10K and 30K monthly subscribers.
| Email Platform | 10K Subscribers | 30K Subscribers |
|---|---|---|
| MailChimp | $129 | $326 |
| Kit | $100 | $180 |
| Klaviyo | $200 | $550 |
| Drip | $154 | $449 |
| Get Response | $81 | $160 |
How To Reduce Your Email Marketing Costs
The average cost for maintaining a 10,000 subscriber list is $145 per month or $1740 per year, and maintaining a 30,000 subscriber list is $375 per month or $4500 per year.
That’s a lot of money to spend on email marketing, especially if you are still working on optimizing your processes.
If your email marketing campaigns generate sales and profit, then the cost might not be an issue, but if this is not the case, for a small business, it’s a relatively high cost.
Let's see what you can do to cut the cost down.
1. Regularly Clean Up Your Lists
‘Cleaning’ an email marketing list means removing inactive subscribers. By doing so, you will have fewer subscribers, which means less monthly subscription fees.
In addition, having a list of active subscribers will help improve the email open rate, resulting in more interaction and better results.
The best way to clean up your list is to perform maintenance every six months to find and remove inactive subscribers.
To find your inactive subscribers, create a new segment with the following rules:
- Subscribers who registered to your list 6 months ago
- Subscribers that did not open any of your emails in the last six months
You can then delete these people from your list. Some email platforms offer this feature out of the box. If not, you can use the simple technique outlined above.
2. Use a Low-Cost Email Marketing Solution
The most effective way to minimize your email marketing costs and ensure that you will not accidentally delete your hard-earned subscribers is to use a low-cost email marketing tool together with your primary email platform.
This is how I manage my email list and keep my costs low:
In addition to MailChimp (which is my primary platform), I also use Sendy. Sendy is a stand-alone email marketing platform you can buy and install on your server.
Although Sendy does not offer the same features as MailChimp or Kit, it’s a great low-cost solution for using together with your main marketing platform.
It uses Amazon Web Services to send emails, costing 100x cheaper than other marketing solutions.
Sendy’s initial cost is $59 (one-time fee), and then you pay Amazon around $1 per 10,000 emails sent!
Unlike other email platforms, Sendy does not charge for the number of subscribers or users you have. You can have an unlimited number of email subscribers and users, and you pay only for the number of emails you send per month.
For example:
- If you have a list of 10K subscribers and send them 12 emails monthly, your Sendy cost will be $12 per month.
- If you have a list of 30K subscribers and send them 12 emails monthly, your Sendy cost will be $36 per month.
Consider the example below to understand how much you can SAVE per month using this hybrid solution.
Let’s say you use Mailchimp as your primary marketing platform and have a list of 30K subscribers. Your monthly cost will be $326.
If you segment your list and keep only 10K active subscribers in Mailchimp and move the ‘inactive’ or ‘less active’ subscribers in Sendy, your monthly cost will be:
MailChimp Subscription for 10K: $129 per month
Sendy Cost for Sending 12 emails per month to 20,000 subscribers: $24
Total cost: ($129 + $24) = $153
Total Savings: ($326-$153) $173 per month or $2076 per year!
3. Use A Hybrid Appoach
This is the process I'm following, which resulted in substantial monthly savings and better results.
I use MailChimp as my primary email marketing tool. When someone registers to my newsletter, their details are stored in MailChimp. I also use MailChimp for all email automation tasks and campaigns.
Every six months, I export my inactive subscribers from MailChimp (by creating a segment described above), BUT instead of deleting them, I import them to Sendy.
After importing them to Sendy, I delete them from MailChimp. This reduces my monthly costs, keeps my main email list healthy, and contributes greatly to achieving open rates above the industry average of 21%.
Surprisingly, a good percentage of people added to my Sendy list tend to be ‘active subscribers’, although this was not the case before!
These people did not open my emails before, but they do now.
One reason this is happening is spam filters. It looks like my emails did not reach them at all, and that’s why they did not interact with me. This is normal and very difficult to avoid.
The benefits you can gain by following this hybrid approach are:
- You can dramatically reduce your monthly cost
- You can increase your email open rate for your main list
- You increase your email open rate from your inactive subscribers.
The disadvantage is that it takes some work to initially set up Sendy and some management every six months when you transfer your subscribers. But once you do the process once, it’s easy, and it's definitely worth the extra time.
Key Learnings
Email marketing is a must-have channel for all kinds of online businesses. While the return on investment from email marketing is higher compared to other channels, the monthly costs can become considerably high, especially for small businesses.
Businesses that take full advantage of email marketing and use it successfully as a sales tool don’t have to worry about costs, but for businesses that are still testing and experimenting and have not yet managed to use email to increase their revenue, the monthly cost can be an issue.
All major email platforms calculate the monthly subscription fee based on the number of subscribers. The bigger the list, the more money it will cost to maintain an active subscription with a tool.
If you have fewer than 10,000 subscribers, this may not be a problem, but if you have more than 30,000 active subscribers, the monthly cost can be around $500.
The best way to reduce your email marketing costs is to use a low-cost solution, such as Sendy, together with the email marketing platform of your choice.
Sendy costs 100X less than most email platforms, and you can use it to store your ‘inactive subscribers’.
The procedure is simple. Once every six months, find your inactive subscribers and move them to Sendy. Keep them for a few months, and delete those that are still inactive forever.
What is very surprising is that you’ll notice that many of your subscribers who are ‘marked’ as inactive in your main platform become active when you move them to Sendy.
At the end of the day, you can save a LOT of money per year on monthly subscriptions and increase the number of people who open and interact with your emails.
