The Hidden Cost of Maintaining Accounts

Growing the number of accounts created for your brand should mean that your business is flourishing. The new accounts signal that you are acquiring more clients who value your brand enough to provide their precious information instead of the guest checkout option. On the surface, this is a win, and account creation is an important metric as many businesses are measured by them!

Intentionally or unintentionally, many of us have used multiple email addresses when purchasing from a brand. It happens, and we, as consumers, do not think about it since we received the product without any issues. Harmless to the consumer, it has the potential to spiral and creates a significant problem for many brands by skewing their analytics, incurring unnecessary additional expenses, and enhancing potential security risks. This issue will only worsen as bad actors constantly make new accounts to leverage “first-time” buyers’ promotions, multiple entries for exclusive raffles, and many other use cases. The number of bad actors was highlighted by Black Friday 2021, where 35% of purchases were conducted by bots and fake accounts.

We wanted to quantify the cost of keeping a bad actor account and the sizable unnoticed impact on many aspects of your business.

To do so, we need to start with some assumptions to calculate a monthly cost. We assume that this business sends 1 email a week (4 total in a month) and 1 SMS a month.

If we use MailChimp, a popular tool, the price per email is $0.02. This means within a month the brand is spending $0.08 on emails to that account.

Like the email service, we choose another popular tool with Twilio for our SMS provider, which is $0.0075/SMS. We assume that only a single message is sent and that the recipient does not respond to the brand.

Solely combining the email and SMS messages for this account, the brand is incurring $0.0875 a month per account. There are a couple of additional costs not included, such as the storage cost of the account, the overhead of needing to manage more data, and the number of accounts, a chargeable metric by many email service providers.

Costs of touchpoints with Bad Actors:

• 1 Account — $0.0875/month100 Accounts — $8.75/month
• 1,000 Accounts — $87.5/month
• 10,000 Accounts — $875/month
• 100,000 Accounts — $8,750/month

Despite the hidden and inflated costs, there is a large opportunity to provide significant savings! These savings are only the beginning of the benefits, as brands will experience many improvements and visibility with better accuracy for marketing campaigns, forecasting inventory, and profiling customers.

For example, bad actor accounts skew the marketing campaigns, as many are dormant and inactive, thus lowering open, click, and converse rates. Removing these accounts increases the ROI overnight solely by reducing the monthly outreach expense. Beyond ROI improvements, these marketing campaigns are essential, as it helps determine the success of brands in retaining and acquiring new customers. You might be throwing away successful marketing campaigns and tactics because of these inflated account numbers from bad actors!

Knowing your customer establishes the foundation of your business. It helps you forecast your inventory, create marketing campaigns, create customer profiles, and more, all enabled by knowing your client. Streamlining the visibility of your customer accounts allows you to directly reduce your costs from unnecessary or duplicate touchpoints with fake accounts while optimizing your data for critical decision-making.

Yofi provides this insight by holistically assessing transactions to determine if the individual is a good or bad actor. Once we flag a bad actor, we provide ways for you to remove these bad actors or deduplicate accounts from your email service provider and customer relationship manager to optimize your operations and data.