Email and SMS Are Not Boring: The Highest ROI Channels You Are Probably Underinvesting In

Tiger Tracks · Eye of the Tiger · Marketing · June 2026

1. Why are email and SMS still the highest ROI channels?

Owned channels give you direct access to customers without the bidding auctions and algorithm churn of paid media. That translates to lower marginal cost per message, tighter personalization, and control over cadence. Benchmark data shows that well-configured automated flows consistently outperform one-off campaigns across open, click, and revenue metrics, because flows target high-intent moments: abandoned carts, welcome sequences, post-purchase journeys, and replenishment triggers [1]. For a CMO facing rising paid CPMs, reallocating a portion of spend to operational investment in flows and list growth can produce faster, more predictable returns than additional paid reach.

2. How much more revenue do automated flows generate versus campaigns?

Klaviyo’s 2026 Omnichannel Benchmarks make the point quantitatively: automated flows generate roughly 4 to 10 times the revenue per recipient of campaigns across email and SMS, with an overall lead stat of approximately 6 to 8 times more revenue per send for flows versus campaigns in many verticals [1]. Examples include abandoned cart text flows with an average revenue per recipient of $4.48, and sector outliers such as hardware and home improvement at $28.27 RPR for abandoned cart flows [1]. AI-powered product recommendations further increase engagement, producing average click rates near 8.8 percent and measurable lifts in revenue per recipient in categories that use recommendations effectively [1].

3. Can SMS realistically move the revenue needle for your brand?

Yes, when it is permissioned, targeted, and tied to intent. Attentive’s benchmarking analysis found consumers prefer SMS for certain types of communication, and well-structured journeys, reminders, and urgency-driven messages deliver measurable revenue outcomes [2]. SMS works best as part of a coordinated omnichannel flow: welcome journeys, abandoned cart reminders, and time-sensitive offers. It is not a blunt instrument; its strength is velocity and high visibility. If your SMS program is underbuilt or treated like an afterthought, you are leaving a performance lever idle.

Figure 1: Conceptual lifecycle profit flywheel showing how email and SMS feed acquisition, activation, retention, repeat purchase, and referral, with profit at the center. The chart is a diagnostic illustration designed to show relative impact under a retention-first strategy; values are illustrative and intended to guide prioritization rather than serve as external benchmarks.

4. How do email and SMS improve LTV to CAC and margins?

Customer lifetime value is driven by repeat purchases and retention, and owned channels are the most direct way to influence both. Small retention gains compound: improving retention by 5 percent can boost profits by 25 to 95 percent depending on unit economics and margins, which directly increases LTV and relieves CAC pressure [3]. Repeat buyers commonly spend materially more than new customers, with industry reporting that repeat purchasers can spend up to 67 percent more, which widens margins and improves payback windows [4]. A healthy LTV to CAC benchmark for ecommerce is generally at least 3 to 1, with higher ratios indicating stronger margin resilience; email and SMS contribute to moving that ratio in the right direction by increasing purchase frequency and average order value through personalized, automated journeys [5] [6] [7].

5. What investment gaps do most brands overlook?

Brands commonly underinvest in the infrastructure and governance that make owned channels scaleable: segmentation, lifecycle mapping, quality data capture, and creative templates for flows. They also treat SMS as a tactical add-on rather than a strategic retention channel. Klaviyo data shows that in sectors such as hospitality, flows can account for one-third of all email and SMS revenue and three-quarters of flow revenue comes from first-time buyers, which underscores the multiplier effect when flows are properly prioritized [1]. Under-investment in these areas increases reliance on paid media to sustain growth, which compresses ROI over time.

6. What KPIs should CMOs use to govern higher investment in owned channels?

Trade vanity metrics for economic metrics. The key operational KPIs are Revenue Per Recipient for major flows, percentage of total revenue attributable to flows, list growth rate for email and SMS permissioned contacts, repeat purchase rate, and the LTV:CAC ratio. Operational targets should be set by cohort, for example 90-day repeat rate improvements or a measurable increase in RPR for abandoned cart and welcome flows. Pair these with a financial target: improving LTV:CAC toward or above 3:1 within 12 months by reallocating incremental spend from low-performing paid tactics into owned channel investment [1] [5] [6].

7. How do you pilot higher investment in email and SMS without sacrificing acquisition?

Run a controlled reallocation test. Move a modest percentage of paid media budget into owned channel infrastructure and content, for example 5 to 15 percent, and track incremental revenue from flows and changes to CAC. Prioritize quick wins: build or optimize abandoned cart and welcome flows, add AI recommendations to the highest-volume journeys, and scale SMS for time-sensitive use cases. Compare net CAC and payback periods for cohorts exposed to the enhanced owned-channel program versus control cohorts. This approach quantifies the marginal benefit and preserves your acquisition cadence while you validate the model [1] [2].

References

[1] Klaviyo. (Unknown). 2026 Omnichannel Benchmark Report. https://www.klaviyo.com/marketing-resources/benchmark-report

[2] Attentive. (2023, March 30). We Surveyed 900 Brands Around the Globe and Analyzed 25 Billion Messages. Here’s What You Need to Know. https://www.attentive.com/blog/marketing-benchmarks-report-highlights

[3] LinkedIn. (2025, June 9). How to Maximize ROI Through Ecommerce Retention Marketing Strategies. https://www.linkedin.com/pulse/how-maximize-roi-through-ecommerce-retention-marketing-strategies-vxlcc

[4] Saras Analytics. (2025, November 3). 9 eCommerce Customer Retention Strategies to Help Increase ROI. https://www.sarasanalytics.com/blog/ecommerce-customer-retention

[5] Qubit Capital. (2026, January 20). Benchmarking LTV / CAC Ratios for E-Commerce Seed Rounds. https://qubit.capital/blog/ltv-cac-benchmarks-ecommerce-seed-rounds

[6] GetRecharge. (2026, May 11). The Importance of LTV:CAC ratio for DTC Ecommerce Brands. https://getrecharge.com/blog/the-importance-of-ltvcac-ratio-for-dtc-ecommerce-brands/

[7] Geckoboard. (Unknown). LTV:CAC Ratio | KPI examples. https://www.geckoboard.com/resources/kpi-examples/ltv-cac-ratio/

Published by Tiger Tracks. Eye of the Tiger Intelligence Series.