How to Optimize Your Klaviyo Pricing Plan for Maximum ROI

Klaviyo is one of the most powerful email and SMS marketing platforms for e-commerce brands. According to statistics over 3.8 billion emails are sent through Klaviyo each month by more than 100,000 businesses.

The platform offers deep customer insights, automation tools, and advanced segmentation to help businesses drive more revenue. However, it can be quite challenging for ecommerce startup businesses.

As your contact list grows, so does your Klaviyo bill—and if you’re not optimizing your pricing plan, you could be spending more than necessary.

So, how do you keep costs under control while maximizing your return on investment (ROI)? 

This guide will explain it. As you read, expect to learn about:

• How Klaviyo’s pricing model works
• How to choose the right plan for your business
• Strategies to reduce costs without sacrificing performance
• How Klaviyo’s advanced features can help you drive more revenue
• How to track and measure your Klaviyo ROI

Let’s get right in.
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Klaviyo’s pricing is based on your number of email and SMS contacts. The more subscribers you have, the more you pay. 

Here’s how it works:
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The Free Plan

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• Cost: $0 per month
• Features:
  
  • Manage up to 250 active profiles
  • Send up to 500 emails per month
  • Access to basic email support and data integration
  • Mobile push notifications

Ideal for startups and small businesses looking to explore Klaviyo's capabilities without an initial investment.
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The Email-Only Plan

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• Starting Cost: $45 per month for 1,001 to 1,500 active profiles
• Features:
  
  • Send up to 15,000 emails per month
  • Predictive analysis, deliverability score, and data integration
  • Product recommendations
  • Klaviyo logo removed from emails
  • Reviews
  • Emails/flows/SMS AI 
  • Email and chat support
  • Mobile push notifications

As your subscriber list grows/decreases, the pricing scales accordingly. This plan is suitable for businesses focusing solely on email marketing.
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‍The Email and SMS Plan

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• Starting Cost: $60 per month for 1,001 to 1,500 active profiles
• Features:
  
  • Send 15,000 emails + 1,250 SMS credits per month
  • All Email-Only Plan features
  • SMS and MMS messaging capabilities
  • Mobile push notifications
  • Advanced reporting and analytics
  • Multichannel A/B testing
  • Multichannel attribution
  • Multichannel segmentation

This plan is designed for businesses aiming to integrate both email and SMS channels for a cohesive marketing strategy.

‍The Add-Ons

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Aside from these plans, Klaviyo offers additional plans which will be listed in the table below.

• Customer Data Platform (CDP): This starts at approximately $500 per month for up to 100,000 profiles. Klaviyo's CDP empowers businesses to harness their data effectively, driving personalized marketing campaigns and enhancing customer experiences
• Reviews: This starts at $25 per month for up to 250 monthly orders. With this add-on, you can collect and display reviews within Klaviyo.

Customers can request a demo for both add-ons.
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Not all businesses need the same Klaviyo plan. Picking the right plan is all about balancing costs and features. 

Here’s how you can make the right choice for your e-commerce business.
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Assess Your Active Profiles

Active profiles are the unique contacts you engage with through Klaviyo. The number of active profiles directly influences your plan selection and pricing. 

For instance, managing 65,001 contacts with 1,250 SMS credits would place you in a specific pricing tier ($1,000 and $1,015 for email and email +SMS respectively).

If you regularly clean your list (removing inactive subscribers), you can stay in a lower pricing tier and reduce costs.
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Determine Your Communication Channels

If your focus is solely on email marketing, the Email plan would be suitable. 

The cost of this plan is based on your list size, not the number of emails you send. SMS pricing, however, is pay-per-send, with rates depending on location.

For a multi-channel approach, the Email and SMS plan provides both email capabilities and SMS messaging automation. This plan is ideal if you aim to reach customers through multiple touchpoints.
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Consider Advanced Features

Basic features (campaigns, simple segmentation) are available in all plans. However, higher-tier plans include A/B testing, AI-driven insights, predictive analytics, and product recommendations.

The more automation you use, the greater the potential ROI—but also the higher the plan cost.

Keep in mind that Klaviyo also offers add-ons like Product Reviews, starting at $25/month. If you want customer reviews displayed on your store, we recommend using this add-on. 

Other premium features (like custom analytics) also come at an extra cost.
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Evaluate Your Budget

The best part about Klaviyo is that you can choose a plan based on your financial resources. 

Klaviyo’s pricing model is designed to scale with your business, meaning the more contacts you have and the more advanced features you use, the higher your costs. However, that doesn’t mean you should jump to a higher tier before you’re ready.

Start small and upgrade strategically. While it’s important to choose a plan that fits your current budget, it’s also smart to anticipate future expansion. If you expect rapid growth, you may want to invest in a higher-tier plan sooner to take advantage of automation and segmentation that will drive higher revenue in the long run.
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Klaviyo’s costs can add up, but with the right approach, you can keep expenses down without sacrificing performance. 

Here’s how:
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Clean Your Email List

Inactive subscribers inflate your costs without adding value. Regularly remove unengaged contacts to:

• Stay within a lower pricing tier
• Improve email deliverability
• Boost engagement rates

You can do this by using Klaviyo’s engagement data to filter out subscribers who haven’t opened or clicked an email in the past 6+ months.
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‍Use Smart Sending Features

‍Klaviyo’s Smart Sending prevents over-emailing by limiting the number of emails, SMS messages, or push notifications subscribers can receive within a certain time. This:

• Reduces send volume
• Lowers costs
• Prevents email fatigue
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Optimize Email Segmentation

‍Instead of emailing your entire list, focus on highly engaged subscribers. This reduces unnecessary sends and improves:

• Open rates
• Click-through rates
• Revenue per email

You can achieve this by using segmentation to target the right customers based on purchase history, browsing behavior, or engagement levels.
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‍Reducing costs is only half the equation. You need to learn to use Klaviyo’s advanced tools to drive higher revenue from your campaigns.

These features include:

‍Automate Your Workflows

‍Set up automated email flows to generate consistent revenue: Examples of such include:

• Abandoned Cart Emails: Recover lost sales by reminding customers to complete their purchase
• Welcome Series: Convert new subscribers into loyal customers with a welcome email
• Post-Purchase Emails: Encourage repeat purchases and product reviews. You can also send a thank-you email
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Carry-Out A/B Testing

‍Test different subject lines, email designs, and CTA buttons to improve your conversion rates.

Each small tweak can lead to:

• Higher open rates
• More clicks
• More sales
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Use Predictive Analytics

‍Use Klaviyo’s AI-driven insights to anticipate customer behavior and tailor your messaging accordingly.

This analytical tool can help you discover:

• Which customers are likely to make a purchase
• When to send emails for maximum engagement
• How to personalize offers based on past behavior

‍How do you know if your Klaviyo plan is paying off?

To make sure you’re getting the best return on investment (ROI), you need to track your numbers and adjust your strategy accordingly.

Klaviyo makes this easy with its email and SMS ROI calculator. Here’s how to use it to measure your success.

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Step 1: Gather Your Key Metrics

Before you can calculate ROI, you need a few important numbers:

• Number of Active Profiles: The total number of subscribers receiving your emails or SMS messages
• New Website Visitors per Month: How many new potential customers land on your site each month
• Average Order Value (AOV) in dollars: How much, on average, a customer spends per purchase
• Average Number of Orders per Customer per Month: How many orders do you buy from you in a month
• Campaigns Sent per Month: The number of emails and texts you send
• Automated Flow Engagement: How many contacts receive messages from your automated workflows, like abandoned cart emails or welcome sequences
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Step 2: Use Klaviyo’s ROI Calculator

‍Once you have your numbers, click the “Estimate your ROI” button. Doing this will estimate:

• Revenue generated from campaigns, automated flows, and new subscribers
• Your expected ROI per year

If your ROI is high, double down on what’s working. If it is low, optimize your strategy by cleaning your email list, refining segmentation, or testing different messaging.
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Wrapping Up on How to Optimize Your Klaviyo Pricing Plan for Maximum ROI

‍Optimizing your Klaviyo pricing plan isn’t just about cutting costs. It’s about making your email and SMS marketing work smarter.

Keep in mind that the best Klaviyo plan isn’t necessarily the cheapest or the most feature-packed. It’s the one that offers the best balance of cost and value based on your business size, marketing goals, and financial resources.

Carefully evaluate what you need, while planning for scalable growth to maximize your ROI.
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FAQs on How to Optimize Your Klaviyo Pricing Plan for Maximum ROI
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1. Does Klaviyo offer discounts or special pricing?

Klaviyo occasionally offers discounts for annual billing and high-volume senders. Checking for promotional offers or reaching out to Klaviyo support can help you save.
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2. How does Klaviyo’s pricing model work?

Klaviyo’s pricing is based on the number of email or SMS contacts in your account. As your list grows, your cost increases, making optimization essential for ROI.
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3. What is the best Klaviyo plan for my business size?

Small businesses can start with the free plan while scaling brands benefit from the paid plans based on their email/SMS volume. Choosing the right plan helps control costs.
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4. How can I lower my Klaviyo costs without losing functionality?

You can reduce costs by cleaning your email list, segmenting engaged subscribers, and removing inactive contacts to stay within a lower pricing tier.