Forrester TEI study reveals Sinch Mailgun ROI and outcomes

When an enterprise starts working with Sinch Mailgun, what’s the financial impact that choice has on the business? It’s a good question – but not exactly an easy one to answer. Picking the right technology partner can be a complex process.

To help weigh your options, you need hard numbers and insights from other enterprise organizations. That’s why Mailgun commissioned Forrester Consulting to conduct a Total Economic Impact (TEI) study on our platform and services. Their published findings are an independent, objective look at the ways Mailgun’s email sending infrastructure and industry expertise affect operations and financials for a composite organization (more on that later).

Here’s the big picture… Forrester found that, over the course of three years, Sinch Mailgun delivered a 264% return on investment (ROI) and a $454K net present value (NPV). To find out how Forrester got to those numbers, let’s dig into some of the highlights from “The Total Economic Impact^TM of Sinch Mailgun”, 2023.

Forrester consultants use a unique process to compile the information and data they need to complete a TEI study. A major part of their research involves interviewing current customers. Forrester spoke with four different enterprise organizations that use Mailgun for email sending.

Those customers included heads of deliverability, a product marketer, and a cybersecurity executive – three out of four from international enterprises that send between 1 and almost 5 billion emails every year.

Industries represented in the customer interviews included real estate, digital marketing, financial services software, and a customer data platform (CDP) that provides marketing automation. The CDP customer reflects Mailgun’s B2B SaaS partners who integrate our email sending technology into their own platforms. These customers rely on Mailgun to enable email sending and deliverability support for their many users from other companies.

Forrester then takes the information from the interviews combined with data from Mailgun to create a “composite organization.” This hypothetical company is used to build a fictional case study that’s based on real numbers and possibilities.

Here are some details on the composite organization Forrester used in the Mailgun TEI study:

• U.S.-based B2C company with $500 million in annual revenue
• Sends approximately 100 million emails per year
• Expects yearly email volume growth of 5%
• Current delivery rate of 88% to 90%
• Cost per sending 1,000 emails is $0.20

Forrester also chose to have the composite organization use Mailgun through a B2B SaaS email partner – meaning the composite organization uses a platform that chooses to partner with Mailgun as its email engine.

Now, let’s see how working with Mailgun would impact an enterprise like the composite organization used in the Forrester TEI study. The study identified three key areas in which Mailgun has the potential to make a measurable impact:

1. Increased revenue due to better email deliverability
2. Cost-savings in email eCPM
3. Time savings from mitigation of deliverability issues

Forrester’s evaluation found that better email deliverability, including a higher inbox placement rate, resulted in increased incremental revenue of more than $594K after three years.

Here’s how Forrester says the composite organization achieves that incremental revenue growth:

• Improved deliverability: The delivery rate with Mailgun increases from 90% to 95%.
  • That means an additional 14.9 million emails are delivered that would have otherwise bounced or been blocked.
• Higher email open rates: This metric increases from 9% to 11.3%.
  • That equates to an additional 5.7 million emails opened over three years.

An email program drives web traffic, promotions, repeat business, customer engagement, and more. But if email communications fail to get delivered to a customer’s inbox, they won’t do anything for a business. However, as these findings suggest, improving deliverability can have a direct impact on revenue.

Forrester notes that taking advantage of Mailgun features like Send Time Optimization (STO) and Email validation may also affect a user’s email deliverability results. The more a sender continues to take advantage of these tools, the more successful their email program can become.

Mailgun customers told Forrester that using our platform helped them decrease capital and operational spending connected to sending bulk email. Researchers concluded that, by working with Mailgun, the composite organization would reduce the effective cost per mille (eCPM) of email by 50%.

That’s right. Choosing Mailgun could cut your email sending costs in half. Forrester estimates the cost of sending 1,000 emails would drop from $0.20 to $0.10. For the composite organization in this study, that translates to savings of $23,500 in three years.

But as a reminder, some of the enterprise customers interviewed for this study send billions of emails every year while the composite organization sends 100 million. Increase that $23.5K in savings by multiples of 10 and those savings really start to add up.

During the interviews, one customer cited the benefits of Mailgun’s analytics, which aid in operational decision-making around an email program, including staffing and scalability.

When an enterprise sender has email deliverability issues, time is of the essence. The longer it takes to resolve a problem, the more money is lost. Unfortunately, it can take a lot of time to reach out to the right people and wait for help and answers.

During the interview process, one Mailgun customer explained that each of more than 10 employees deals with at least one or two email deliverability issues every week. That work entails reaching out to Postmasters, verifying, diagnosing, and mitigating the problem. This takes up valuable time and resources.

Our customers told Forrester that Mailgun’s speed to implementation and responsiveness brought a noticeable improvement to email deliverability troubleshooting, reducing time and costs to mitigate problems by 50%.

Here’s how Forrester says the composite organization benefits from faster troubleshooting:

• With Mailgun, time to remediate deliverability issue dropped by 50%.
• Costs associated with deliverability troubleshooting were also cut in half.
• These reductions result in $9,100 PV over three years.

Forrester also notes that the hours saved fixing deliverability issues can be reapplied in ways that add more value to the organization. By being fast, flexible, and responsive, Mailgun allows its customers to accomplish more important goals.

Given all these expectations, Forrester estimates that the composite organization would recoup its investment in working with Mailgun in less than six months.

Beyond the three areas of improvement mentioned so far, Forrester also looked at what it called “unquantified benefits.” These are factors that researchers did not directly evaluate in the TEI study. However, our customers mentioned them in Forrester’s interviews. So, they are included in the study.

• Sender reputation: Working with Mailgun helps senders improve their reputation with mailbox providers, which decreases the likelihood that messages are sent to spam while enabling long-term deliverability.
• Brand resilience: Reliable delivery of important communications, such as transactional emails, supports brand promises and a positive experience.
• Faster time to delivery: One customer told researchers that Mailgun helped shorten the mean time to delivery by 78%.
• Scalability: Multiple customers pointed out how Mailgun helped them grow while our capabilities and features grew along with them.

There are also other important benefits not mentioned in the final study. Mailgun’s focus on security and compliance ensures we keep “bad senders” off the platform while complying with important privacy regulations like GDPR, CCPA, and HIPAA. Plus, senders who want even more control over and visibility into email deliverability can take advantage of our suite of solutions with Mailgun Optimize.

Many senders, including the composite organization in the TEI study, use major martech platforms for email automation and marketing. These platforms can partner with Mailgun to add email sending capabilities, deliverability support, and more.

While all the major findings apply to any type of Mailgun user, Forrester also noted these specific unquantified benefits for B2B SaaS partners:

• Expanded offerings: While adding email sending capabilities is important, Mailgun also provides features like email validation, email analytics, and deliverability monitoring to its partners. These expanded offerings help our SaaS partners attract and retain customers.
• Support for large volumes: SaaS platforms need this when there are sudden, seasonal spikes in email send volumes. That includes Black Friday and Cyber Monday.
• Customer satisfaction: We’re happy to report that partnering with Mailgun leads to satisfied users of marketing automation platforms. Our partners’ customers notice the improvements in deliverability too, and their satisfaction leads to loyalty and renewals.

One other aspect the Forrester study did not mention is Mailgun’s Email API. This is something developers truly appreciate because our RESTful APIs make integrating Mailgun with a partner’s application simple and seamless.

Customers and partners who participated in Forrester’s interviews also praised Mailgun’s commitment to innovation and continuous improvements.

We’ve covered some of the most important findings from Forrester’s TEI study on Mailgun, but there’s still a lot of valuable information you can explore. That includes detailed, three-year incremental revenue projections, as well as information on our fees and the setup/integration process.

For further details from the TEI study, including a detailed cost analysis, possible risks to consider, and additional insights from customer interviews, be sure to download the full TEI study PDF. We’re also hosting a webinar featuring Forrester on the study’s findings and what they mean to enterprise senders. The event is scheduled for March 22, at 11 am CST.

Author: Natalie Hays Natalie Hays is the Product Marketing Manager at Sinch Mailgun. She's got product knowledge from the inside out and works to get Mailgun's message to the masses. She writes about product updates, secret email wisdom, and brings you in-depth reports on the power of email.