SaaS email tools start cheap but scale fast. Learn how startups overspend—and how to cut costs, consolidate tools, and future-proof your stack.
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Email marketing is often praised as the most cost-effective channel for startups. But behind the glossy dashboards and “pay-as-you-grow” pricing, SaaS email marketing tools can quietly drain thousands from your budget every year.
In fact, according to Custify’s 2024 SaaS report, businesses spend an average of 20–25% of their marketing budget on email tools alone. For early-stage startups, that can mean $5,000–$20,000 annually, much of it wasted on unused features, inflated subscriber costs, and overage fees.
In this article, we’ll uncover the hidden costs of SaaS email marketing, why they happen, and how to keep your budget under control.
There’s no doubt that platforms like Mailchimp, HubSpot, and Klaviyo offer immense convenience:
But this convenience comes at a price—and that price often grows much faster than your email list. Capterra’s SaaS Pricing Guide shows that the jump from a 2,000-subscriber plan to 10,000 subscribers can be 3–5x in cost.
Most SaaS email tools charge by the size of your list. As your audience grows, costs can rise exponentially—even if engagement drops.
Exceed your monthly email limit? Many tools tack on hidden overage charges, sometimes at premium rates.
You might only use a fraction of what you pay for. Advanced automation, segmentation, and AI tools sound great, but are often underutilized.
Switching platforms can mean migration fees, downtime, and data-loss risks—creating an expensive form of vendor lock-in.
Keeping your email tool connected to CRMs, e-commerce systems, and analytics suites costs time and sometimes additional integration fees. Tipalti’s guide to SaaS spend management explains how these hidden charges add up.
Early-stage companies often operate on lean budgets. Every dollar saved on software extends runway. But email marketing SaaS costs tend to balloon for startups because:
It’s one thing to talk about SaaS overspending in theory—it’s another to see it unfold in real numbers. Consider BrightScale, a fast-growing e-commerce startup. They began with a modest 5,000-subscriber list, paying $250/month for their SaaS email platform. Within 12 months, their list had grown to 50,000 subscribers. Their monthly bill? $1,500—6x higher, largely due to crossing into higher tiers and paying for inactive or duplicate subscribers they didn’t realize they were carrying.
The financial sting wasn’t the only problem. As costs rose, their marketing team became tangled in features they didn’t need—AI-powered optimizations and multi-branch automations they’d never even set up. Worse, when they tried to migrate to a different platform, data portability issues led to a week of downtime and lost engagement.
Another case, Growlytics, a B2B SaaS company, discovered their marketing, sales, and customer success teams were all running separate email tools. Between Mailchimp, Klaviyo, and HubSpot, they were spending $100K annually—with at least 40% of costs going toward overlapping functions. By consolidating to a single managed open-source platform, they cut costs by $45K/year while improving team-wide collaboration.
These stories aren’t unique. BetterCloud’s SaaS usage report shows that most companies underestimate SaaS costs by 30%, thanks to tool sprawl, list bloat, and underused features. Without active management, even the most promising email tool can become a significant drag on your budget.
One of the biggest mistakes startups make is failing to project how fast their SaaS email costs will grow. What seems affordable with a few thousand subscribers can become unsustainable as you scale. Here’s how to forecast your future costs before you get blindsided.
TCO isn’t just your monthly subscription fee. It includes:
Ask yourself: “What happens if our subscriber list triples in the next 12–18 months?”
Use your historical list growth rate to project future subscriber counts, then multiply by the cost per tier. Capterra’s SaaS pricing guide shows that pricing can jump 3–5x between tiers, especially once you cross the 10,000-subscriber threshold.
Build a simple spreadsheet with columns for:
This exercise reveals the true long-term expense of your email marketing tool—and helps you decide whether it will remain sustainable as your business scales.
The good news? Overspending on SaaS email tools isn’t inevitable. By following a few practical best practices, startups can keep email marketing costs predictable and manageable.
By putting these practices in place, startups can reclaim control over their email marketing budgets—freeing up capital for growth initiatives and innovation.
Follow this 3-step checklist to uncover savings:
1. Consolidate Marketing Tools
Look for platforms that combine CRM, automation, and analytics, reducing multiple subscriptions into one. Our Tech Stack Consolidation Guide can help you plan the switch.
2. Negotiate with Providers
Most SaaS vendors offer discounts for annual commitments or by matching competitor rates. Custify’s SaaS Trends Report shows businesses save up to 20% through renegotiations.
3. Explore Managed Open-Source Email Solutions
Platforms like Ektosa’s managed open-source email marketing tools deliver enterprise-grade features at a fraction of SaaS costs—without the scaling penalties.
SaaS email marketing tools can be a blessing for growth, but unchecked costs can silently erode your marketing ROI.
By auditing your stack, cutting unnecessary features, and exploring open-source alternatives to popular SaaS tools, your startup can enjoy the benefits of email marketing without the sticker shock.
Head of Strategy at Ektosa | Accenture Strategy & Consulting
