What Happens When Your SaaS Transactional Emails Bounce?

Anyone who has sent emails to a marketing list has spent time fussing over deliverability. Getting to the inbox is key.

But what happens when transactional emails bounce? If you work in SaaS, the answer is anxiety-inducing.

Think transactional emails only include receipts/password reset emails? Not quite…your company likely generates a lot of revenue from other valuable emails to existing customers.

At Churn Buster, we’ve seen email deliverability wreak havoc on recurring revenue. Read on to learn how you can handle transactional email bounces more profitably.

EDIT: Since publishing this article, we’ve added bounce notifications to Churn Buster to help your team handle high-value transactional bounces more profitably. Read all about it!

Marketing vs. Transactional Emails

Success!

When a marketing email bounces, it’s a write-off. Not worth taking action. Just one less prospect your team can close.

When a transactional email bounces, it’s a sign of something far worse.

It means that:

1. At best, you just lost one of your contacts for a customer, possibly the one who signed up for the account originally.
2. At worst, you just lost your only contact for a customer. The one who championed your product initially. The one you invested in pitching and closing.

Further, depending on the content of the email (and future emails), your company will take a serious revenue hit by losing contact with the customer.

The most immediate hit you’ll take (and the one we’re focused on solving at CB) is when you email a customer about their payment not going through.

Usually these problems have straightforward solutions, but when a customer misses your email, it’s a guaranteed churn unless you happen to be getting on the phone with them.

What causes an email to bounce?

A bounce can happen for a permanent reason (like an email account not existing anymore) or for a temporary reason (like an inbox being full). These obviously require different actions on your part.

Let’s focus on permanent failures — these are a surefire sign that no future emails will be delivered. Common reasons for these failures include:

1. Your customer left their job — if you’re selling to startups, this happens far more often than you may think.
2. They changed their email address and killed the old account without a good plan in-place.

What can you do to monitor?

You should be using an email delivery tool — we use (and absolutely love) Postmark App.

They allow us to monitor all emails we send to our customers, as well as the emails we send to our customers’ customers.

With customizable webhooks, we’re alerted whenever a bounce happens. We can then trigger various actions — displaying it in our dashboard, or taking action to correct the bad email addresses automatically (example@gmil.com).

What can you do to fix?

Once you or your system have been alerted, you should take different steps based on the type of bounce.

If the email address doesn’t exist, check to see if you can spot a misspelling. If no luck there, try to find out if your point of contact has left the company. If so, consider finding another contact at the company.

If you have a sales process, this may involve re-selling your product/service to some extent. Getting a proper point of contact on-file at this point can ensure months/years of retention/account growth in the future.

How you can get ahead of the problem:

Everything above is reactionary. Which is never a fun place to be. Here’s how you can get ahead of the problem:

1. Automate spell checks on signup. Use Mailcheck in your signup flow to reduce the number of @htmail.cm mispellings that make it into your customer list.
2. Automate company research (if B2B). Since Mailcheck will only catch common consumer misspellings, you can use Clearbit to automatically lookup new signups and share the research via Slack or Email. You’ll know right away if they’ve misspelled the company domain, or the name in their email address.
3. Make it easy to update email addresses. Whether your customer needs to change their email address on file, or your support team needs to do it for them…make it easy.
4. Distribute address changes to data stores. When an email address is updated, make sure that your database, your payment processor, and any data warehouses are updated. Make sure this happens whether the address is updated in your app, in an admin dashboard, or even in your payment processor.
   What we often see is email address updates not getting passed to payment processors, and then tools that integrate with your payment processor have an out-of-date contact for the account.
5. Stay in regular contact with your customers so you’re top-of-mind if they change positions within the company, or leave, and need to hand over control to someone else.