The hidden cost of getting email marketing and SMS wrong

The value of an email address only exists if you protect it

An email address is one of the most valuable assets marketers have. An engaged mailing list can return between $36–50 for every $1 spent on your email marketing, but only if that engagement holds. So, how do you keep them engaged?

Customers are still comfortable sharing email addresses — more so than most other personal data. But that willingness now comes with far less tolerance for irrelevant messages. Dotdigital’s upcoming customer research report revealed only 15% say marketing messages feel “very relevant” to customers, and tolerance for generic, repetitive messaging is shrinking fast.

When email marketing and SMS campaigns miss the mark, the damage doesn’t just show up in open rates. It shows up in:

• Reduced customer lifetime value
• Higher churn
• Deliverability decline
• Eroded trust

To protect the value of your database, every message has to earn its place.

Calculating the value of your database

When we talk about the value of a marketing database, the most meaningful lens is customer lifetime value (CLV). Rather than focusing on list size or one-off campaign revenue, CLV reflects the long-term impact of your email marketing and SMS strategy, including how well you retain customers and drive repeat revenue.

To calculate CLV, you can use this simple formula: 

(Average Revenue Per User × Gross Margin) ÷ Churn Rate

To figure out your gross margin, use this calculation: 

Revenue – direct costs (the cost of your email and SMS platform ) = gross profit

Gross profit ÷ revenue = gross margin

Every email either builds or erodes customer lifetime value

Customer lifetime value (CLV) isn’t just driven by acquisition. It’s shaped, and sometimes limited, by the quality of your ongoing communications.

Purchase behavior is becoming more deliberate. Dotdigital’s upcoming consumer research reveals nearly half of customers (44%) describe their purchases as considered rather than impulsive. Shoppers are researching more, comparing more options, and leaning on peer recommendations before they buy. That means your emails have to work harder.

A flashy subject line or a generic discount might trigger an impulsive puechase but repeat engagement with your emails is driven more effectively when you consider:

• Relevance: Does this actually solve a problem they have right now?
• Value: Is this better than the three other tabs they have open?
• Trust: Do they have enough confidence in this brand to hand over their card details?

When email marketing lacks relevance or arrives at the wrong time, three things happen: the consideration window is missed, conversion momentum slows, and CLV doesn’t reach its potential.

To fix that, focus on:

• Social proof: Reviews, testimonials, and user-generated content embedded directly into campaigns
• True personalization: Show products customers have browsed or categories they consistently engage with
• Behavioral timing: Trigger emails based on signals that show they’re actively considering a purchase

Message fatigue is the quiet killer of customer retention

Customer retention rarely collapses overnight; instead, it fades gradually through fatigue. Too many bland and irrelevant messages cause customers to switch off and leave your marketing emails unopened.

Customers are becoming more sensitive to how often brands contact them. They have more choices than ever, and with email being the primary channel for brand communication, inboxes are getting fuller. In Dotdigital’s soon-to-be consumer research survey, 93% of respondents said they dislike daily messages from brands, with weekly or monthly contact preferred. Yet many email and SMS strategies still prioritize sending without considering whether each message is timely, relevant, and valuable to the customer.

When brands oversend:

• Engagement rates decline
• Subscribers mentally tune out
• Opt-outs increase
• Retention weakens

This doesn’t just hurt campaign performance; it shrinks your addressable audience and piles pressure on acquisition to replace lost subscribers. SMS faces a similar risk. It’s immediate and personal, but overuse or poor timing can trigger faster opt-outs and negatively impact brand perception.

To protect retention, respect customer attention as much as conversion:

• Frequency caps: Limit total cross-channel messages, not just email volume
• Engagement-based suppression: Pause regular sends to inactive subscribers before they churn, and enroll them in a personalized reengagement program
• Preference capture: Let customers choose their cadence and channel
• Coordinated SMS and email: Save SMS for genuinely time-sensitive or high-value moments

Poor engagement quietly damages email deliverability

Deliverability is often treated as a purely technical concern when, in reality, it’s directly tied to customer experience. Mailbox providers closely monitor engagement, so when subscribers consistently ignore, delete, or complain about your emails, your sender reputation takes a hit. And once that happens, even strong campaigns struggle to reach the inbox.

The downward spiral usually looks like this:

1. Campaign relevance drops
   ⬇️
2. Engagement declines
   ⬇️
3. Filtering increases
   ⬇️
4. Reach shrinks and inbox placement falls
   ⬇️
5. Performance falls further

To protect deliverability, treat engagement as a strategic priority, not just a campaign metric:

• List hygiene: Regularly suppress or sunset inactive subscribers
• Segmentation depth: Avoid broad sends that dilute engagement signals
• Send-time optimization: Align delivery with when customers typically engage
• Post-purchase logic: Stop irrelevant promotions immediately after conversion

Cross-channel inconsistency damages trust fast

Customers don’t think in channels; they think in experiences, and they experience your brand as one continuous conversation. 

That’s why gaps in your cross-channel marketing can be so damaging. When email, SMS, retargeting ads, and your website operate in silos, customers start to notice. They see:

• An SMS promotion for something already purchased
• A retargeting ad that ignores recent browsing
• An email discount sent immediately after a full-price purchase

When your channels are out of sync, you don’t just lose efficiency, you lose authority. Customers demand seamless experiences, so inconsistent messaging can make your brand look careless and can turn a minor mistake into the end of the customer journey.

To build trust, make your channels work together rather than just showing up on every platform. This can look like:

• Unified customer view: Make sure all channels are informed by the same behavioral data
• Cross-channel suppression: Stop ads and SMS pushes after key conversions
• Journey continuity: Use “pick up where you left off” style personalized messaging on your website and nurture emails
• Consistent value story: Align offers and messaging across every touchpoint

Ignoring channel preferences accelerates customer churn

Customers favor channels where they feel in control. Email remains customers’ preferred channel because they can choose when and whether to engage. SMS, while powerful, carries higher expectations. It’s immediate and personal, but can feel intrusive when brands overuse it. 

Problems can arise for brands when they: 

• Duplicate messages across every channel
• Overuse SMS for low-value updates
• Ignore stated channel preferences
• Prioritize quick sends over targeted messages

Do one of these, and you’ll feel it; do all of them, and you’ll lose customers faster than any campaign can win them back. That’s why it’s important to match your channel to your message intent:

• Email: Perfect for showcasing products, nurturing, education, and convincing shoppers in the consideration phase
• SMS: Ideal for urgent, time-sensitive messages and high-intent moments like flash sales or back-in-stock alerts
• Paid retargeting: Use for reinforcement during active consideration and re-engagement of lapsed customers
• Website messaging: Personalize on-site to support conversion and pull in dynamic customer reviews for reassurance

First-name personalization isn’t enough anymore

For years, personalization has been the go-to fix for engagement challenges, but the gap between surface-level personalization and true relevance is widening, and customers notice.

Many brands include names in subject lines, recognize birthdays, and segment by basic attributes, but that doesn’t deliver the connection customers expect anymore. Only a small share (15%) say marketing messages feel highly relevant to them. This is a big opportunity for you to fill a gap in the customer experience, particularly for younger audiences who expect brands to understand context, not just identity.

Luckily, the gap isn’t in what we know about the customer, but in how we use that knowledge to respond to what customers are doing in real time.

To deliver real relevance, you need:

• Behavioral context: Understanding what they’re doing right now
• Real-time signals: Responding to customers’ latest clicks, views, or cart additions
• Journey awareness: Recognizing the nuances of the customer journey so you don’t rush them too soon, or lag behind and miss opportunities
• Suppression logic: Knowing when to stop a message (like a discount offer) because the customer has already bought the item
• Single customer view: Making sure all interactions on your channels are being tracked in a unified profile, ready to act on

Knowing who the customer is isn’t enough anymore. You also need to understand what they need right now. To close the relevance gap, you need to make a couple of additions to your existing automation flows. Prioritize:

• Behavioral triggers: Use browse, cart, price-drop, and replenishment signals to kickstart automation flows
• AI-driven recommendations: Showcase products based on real affinity, not broad segments in marketing messages
• Cool-down logic: Suppress messages to customers after major purchases or specific actions to avoid annoying them with discounts after they’ve pair full-price
• Moment-based journeys: Design flows around customer intent, not calendar sends

How smarter email marketing protects CLV

The risks above are real, but they’re also highly preventable. Brands that consistently grow CLV tend to focus on a few foundational disciplines:

• They respect channel and frequency preferences 
• They connect every channel
• They let behavior guide and trigger timing
• They leverage high-volume sends strategically by ensuring every message is relevant and personalized

If you’re looking to strengthen performance, start here:

• Capture and honor customer preferences
• Connect your cross-channel marketing data
• Build journeys around real customer intent
• Use AI and automation to enhance, not increase, message pressure

Small improvements in relevance and timing often unlock big gains in retention and lifetime value.

Time to send smarter and personalize more

Email addresses remain one of the most valuable assets for marketers, but that value isn’t automatic anymore.

Consumers are more selective, more informed, and far less patient with messaging that feels generic, excessive, or poorly timed. When engagement drops, resist the instinct to simply send more; focus on sending smarter instead.

Every email and SMS is a chance to build confidence in your brand. Meet customers in the moment, speak to what they actually need, and you become the brand they trust by default. That’s how you create and protect a CLV that everyone else will be chasing.

Sending smarter starts with knowing where you stand. The Dotdigital Global benchmark report gives you expert data and insight to measure your email and SMS performance and spot opportunities to get ahead of the competition.