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

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

Automated email flows account for just 5.3% of email sends on Klaviyo but generate nearly 41% of email revenue, according to its 2026 benchmarks drawn from more than 183,000 Klaviyo customers [1]. Few line items in a marketing budget return that kind of yield from so small a share of activity.

Owned channels give brands 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.

1. Owned Channels Outperform Because They Target Intent

Flows trigger at high-intent moments: abandoned carts, welcome sequences, post-purchase journeys and replenishment. That is why Klaviyo's data shows flows outperforming one-off campaigns on clicks, orders and revenue: the average email flow click rate is 5.58% against 1.69% for campaigns, and flows have about 13 times the placed order rate [1]. For a CMO facing rising paid media costs, reallocating a portion of spend to flows and list growth can produce faster, more predictable returns than additional paid reach.

2. Automated Flows Generate Far More Revenue Per Message Than Campaigns

The gap is large in both channels. Klaviyo reports that email flow revenue per recipient is nearly 18 times higher than campaign revenue per recipient, with the top 10% of email flows reaching $7.79 [1]. On SMS, flows generate about 8 times the revenue per recipient of campaigns, account for 7.6% of sends and drive 45.2% of SMS revenue [2]. AI-powered product recommendations add to the effect, lifting average email click rates to 3.75% and to 8.79% for top performers [1].

3. SMS Moves Revenue When It Is Permissioned and Timely

The channel works when it is tied to intent. In Attentive's 2023 survey of 900 brands and analysis of 25 billion messages, consumers said they prefer to communicate via SMS, and 73% of marketers said SMS drives incremental revenue for their business [3]. Welcome messages and abandoned cart journeys delivered some of the strongest results in that analysis [3], and Klaviyo's 2026 data shows SMS flows converting at 1.9% against 0.27% for SMS campaigns [2]. SMS works best as part of a coordinated omnichannel flow: welcome journeys, abandoned cart reminders and time-sensitive offers. Its strength is velocity and high visibility; an underbuilt SMS program leaves a performance lever idle.

4. Retention Economics Lift 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. Research by Frederick Reichheld of Bain & Company, as cited by Harvard Business Review in 2014, shows that increasing customer retention rates by 5% increases profits by 25% to 95% [4], a long-standing finding that still frames retention economics. Repeat buyers also spend more over time: in Bain and Mainspring's online loyalty research, based on a December 1999 shopper survey, the average repeat apparel customer spent 67% more in months 31 to 36 of the relationship than in the first six months [5]. Recharge recommends an LTV to CAC ratio of at least 3 to 1 for ecommerce businesses [6]; email and SMS help move that ratio in the right direction by increasing purchase frequency and average order value through personalized, automated journeys.

Brands that act on this should prioritize flows, not just send volume. Start by automating high-intent journeys: welcome, abandoned cart, post-purchase and replenishment. Test AI-driven product recommendations in flows to lift click rate and revenue per recipient [1]. Grow the SMS permission base with a clear value exchange rather than constant discounting.

5. Most Brands Underfund the Infrastructure Behind Flows

The gaps tend to sit in segmentation, lifecycle mapping, data capture and creative templates for flows, the work that makes owned channels scalable. Many brands also treat SMS as a tactical add-on rather than a strategic retention channel. The cost of that neglect is larger than it looks, because flows are not only a retention tool: about 48% of email flow revenue and 64.4% of SMS flow revenue on Klaviyo comes from new buyers [1][2]. Underinvestment here increases reliance on paid media to sustain growth, which compresses ROI over time.

6. Economic KPIs Should Govern Higher Owned-Channel Investment

Trade vanity metrics for economic ones. The key operational KPIs are revenue per recipient for major flows, the percentage of channel revenue attributable to flows, list growth rate for permissioned email and SMS contacts, repeat purchase rate and the LTV to CAC ratio [1][6]. Set operational targets by cohort, for example 90-day repeat rate or revenue per recipient for abandoned cart and welcome flows. Pair these with a financial target, such as moving LTV to CAC toward or above 3 to 1 [6] by reallocating incremental spend from low-performing paid tactics into owned-channel investment.

7. A Controlled Pilot Protects Acquisition While Testing the Model

Run a controlled reallocation test. Move a modest share of paid media budget into owned-channel infrastructure and content, 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 against control cohorts. This approach quantifies the marginal benefit and preserves acquisition cadence while the model is validated.

Conclusion

Email and SMS have a reputation problem, not a performance problem. The benchmarks show a small share of automated messages producing a large share of revenue, much of it from new buyers. Platforms now automate the triggers, recommendations and send times, but deciding which journeys deserve investment, which customers are worth keeping and how to prove incremental lift remains a human call. That is the Human-Led, AI-Augmented advantage.

References

1. Klaviyo. (January 23, 2026; updated September 24, 2026). 2026 Email Marketing Benchmarks by Industry. https://www.klaviyo.com/products/email-marketing/benchmarks
2. Klaviyo. (January 23, 2026; updated September 24, 2026). 2026 SMS Marketing Benchmarks and Stats by Industry. https://www.klaviyo.com/products/sms-marketing/benchmarks
3. Brett, J., Attentive. (March 30, 2023). 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
4. Gallo, A., Harvard Business Review. (October 29, 2014). The Value of Keeping the Right Customers. https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
5. Baveja, S. S., Rastogi, S., Zook, C., Hancock, R. S., and Chu, J., Bain & Company and Mainspring. (c. 2000; survey December 1999). The Value of Online Customer Loyalty and how you can capture it. https://media.bain.com/Images/Value_online_customer_loyalty_you_capture.pdf
6. Heegaard, S., Recharge. (June 5, 2023). The Importance of LTV:CAC ratio for DTC Ecommerce Brands. https://getrecharge.com/blog/the-importance-of-ltvcac-ratio-for-dtc-ecommerce-brands/

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