How Email Bounce Rate Affects Your Email Campaign ROI (Free Analyzer Template)

  • Is the usage of email campaigns among marketers growing or declining?
  • How important is email campaign marketing as a revenue channel?
  • What is a “normal” email campaign bounce rate?
  • To what extent is revenue affected if I don’t control the email bounce rates?

These questions and more will be answered by the end of this post.

Make a Free copy of Google Sheet Template and do your own calculation

The Google sheet Template empowers you to play with your own volume of emails and conversion rates. By entering the average sales per win deal you’ll quickly identify if bounce rate is affecting your revenue stream and by how much.

The end result of the analysis will show you how many more customers you can gain and what would be the increase in sales if you send a specific amount of emails that are verified.

Email usage global stats

Globally speaking, we are witnessing substantial growth in the number of mobile messengers and chat apps. Nevertheless, according to Statista, the number of e-mail users are growing even faster. It is estimated that there were 3.8 billion e-mail users in 2018 and this number is projected to grow to 4.4 billion by 2023. Those users have sent and received 281 billion emails each day in 2018 and this figure is expected to increase to over 347 billion in 2022. That’s a projected growth of 23,5% in 5 years!

Statista stats about number of sent and received emails per day worldwide
Statista: Number of sent and received emails per day worldwide (2017 – 2023)

Email campaign benchmarks 

According to a HubSpot, “59% of respondents say marketing emails influence their purchase decisions”. With this in mind, it is no surprise that 93% of B2B marketers use email to distribute content and 59% marketers say email is their biggest ROI contributor. 

For many companies, mass emailing is currently the main channel to grow the revenue stream. Of course, this may vary within specific industries, markets, and depending on the products companies are selling. When comparing email campaigns to other selling channels companies might have, the costs per sale appear to be significantly lower (in the majority of the cases).

Why are email campaigns are more cost-effective compared to other channels? 

  1. Email marketing does not require costly personnel to generate leads apart for campaign managers. (No fieldwork, travel to conferences, …etc)
  2. For the majority of stages in the lead management funnel, there is no need for manual interaction. Many of those stages are being taken care of with automation tools. 
  3. Handling massive amount of leads can take time and become costly if they require a personal touch. With email campaigns, you can reach millions of people instantly.

In any case, it is vital that you understand your Customer Aquisition Costs (CAC) to define what channel brings you best ROI. Read more about CAC here.  

Why is measuring email bounce rate important?

Standard email marketing campaigns have a pretty simple funnel structure. Campaign managers need to make sure that the following KPIs are measured within each campaign:

Let’s put some random numbers there to paint a better picture.

Conversion rates when NOT measuring Bounce rate

  1. Emails sent (100.000)
  2. [bounce rate unknown]
  3. Emails opened (22.000) 22%
  4. Email links clicked – CTR (2.500) 2,5% *In this case, users are redirected to a landing page with a subscription form.
  5. Opportunities created (1.000) 1% *This stage includes people that subscribed through a form or replied to an email.
  6. Won deals (500) 0,50%

Conversion rates when measuring the Bounce rate

Now let’s see how this same campaign performs with identical numbers, but with a known bounce rate. 

  1. Emails sent (100.000)
  2. Emails bounced (15.000) 15%

following stats based on 85.000 emails have been delivered

  1. Emails opened (22.000) 25,9%
  2. Email links clicked – CTR (2.500) 2.9%
  3. Opportunities created (1.000) 1,17%
  4. Won deals (500) 0,59%

Conversion rates when measuring the Bounce rate with CLEAN/VERIFIED emails

Now, let’s see how your campaign would behave if you would have verified your emails and have 100.000 clean emails at your disposal. 

  1. Emails sent (100.000)
  2. Emails bounced (2.000) 2% – Acceptable bounce rate 

98.000 emails have been delivered
*Using the Conversion rates from the previous calculation

  1. Emails opened (25.382) 25,9% *
  2. Emails links clicked – CTR (2.842) 2.9% *
  3. Opportunities made (1.147) 1,17% *
  4. Won deals (578) 0,59%

That’s 78 more deals won or a 15,6% increase in sales – simply by fixing your bounce rates.  

If you wish to play around with your numbers, use the Google sheet analyzer template below, which you can copy and use – FREE of charge 😉

Bounce rates really do affect all conversion rates in the funnel. 

Keep in mind that just fixing bounce rates doesn’t necessarily mean you’ll increase your sales unless you have a substantial amount of emails at your disposal and you are sending these in batches. Verified emails or not, the number of deliverable emails in your current database will not change. Replacing the bounced emails with clean/verified ones in specific campaigns with specific amount of emails will help you increase the total number of delivered emails. Having clean emails, in this case, will help with the increase in the delivery rate and open rate consequently. It’s worth knowing that your ideal delivery rate should be 98% or higher.

When using emails for email campaigns in batches, for example, 100.000 verified emails for each campaign, then verify your emails. You’ll probably make yourself a hero overnight. The open rate should jump immediately after you verify your emails.

Where can you verify emails? Google for “best email verifier” (Click)

2 main issues you want to avoid at any cost

Ignoring your email bounce rates can cause two main issues:

  1. It can skew your interpretation of open rate
  2. It can give your IP a bad reputation if the bounce rate is consistently higher than average.

In the bottom video, Guillaume Moubeche nicely explains how bounced emails can affect your reputation and as well as some good practices to avoid being blacklisted. 👍

What is an acceptable/normal bounce rate?

Normal or acceptable bounce rate is around 2% but you should feel safer with 1% or lower.

Campaign monitor states, that; “If you’re seeing bounce rates above the 2% industry-standard, continuing to send to those addresses without action and investigation on your part will damage your sending reputation with receiving ISPs and will degrade the deliverability of your future sends.”

Now, let’s answer the two remaining questions…

Why do emails bounce?

Well, there are two types of email bounces:

  1. Hard bounce
  2. Soft bounce

According to Mailchimp, a hard bounce “indicates a permanent reason an email cannot be delivered. In most cases, bounced email addresses are cleaned from your audience automatically and immediately.”

Common reasons for hard bounces can be: 

  • Recipient email address doesn’t exist.
  • The domain name doesn’t exist.
  • The recipient email server has completely blocked delivery.

There can be occasional cases where a valid email can hard bounce.

Soft bounce, on the other hand, represents a “temporary delivery issue”. 

There are many reasons an email address may soft bounce. The most common are:

  • Full mailbox (over quota).
  • Email server of a recipient is down or offline.
  • An email message is too large.

How can you avoid using bounced emails in a campaign?

Here you have multiple options. 

  • Always ask subscribers to confirm their email with Opt-in
  • Use an email verification service that is integrated with your forms on a website; this will verify the existing email in real-time and alert users to not provide fake ones.
  • Verify your email database regularly with automation, using email verification tools. You should do monthly verifications for a small number of emails and biweekly for a large quantity in your database. 

There are multiple tools available for email verification that give a possibility to verify a list of email. Either manually by uploading a file or via their API service.

Final thoughts…

Verify your emails. It’s worth it.

Single emails before they enter your database with real-time verification tools and existing emails in your database (CRM or email tools) every month. Twice a month, if you handle a higher volume of emails.

Happy to hear your thoughts on the topic!

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Martin Knapic
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