How to Reduce Your Klaviyo Bill by 40% in 30 Minutes or Less

Last month, I audited a beauty brand's Klaviyo account and found something shocking. They were paying $2,800 monthly for an email list where 76% of subscribers hadn't opened an email in over 180 days.

After implementing the exact strategies I'm about to share, their bill dropped to just $675 per month - a 76% reduction that saved them over $25,000 annually.

The best part? The entire process took less than 30 minutes to set up.

Since Klaviyo's pricing update, countless e-commerce brands are unknowingly hemorrhaging money on bloated email lists. In this post, I'll show you exactly how to slash your bill without sacrificing revenue, engagement, or deliverability.

In fact, you'll actually improve all three.

Understanding Klaviyo's New Pricing Structure

In 2023, Klaviyo made a significant change to their pricing model that many brands still haven't fully adjusted to. Rather than basing pricing solely on total contact count, they now use a "marketing contact" model.

Here's what you need to know:

• Marketing contacts: People who have received an email or SMS from you in the last 9 months

• Non-marketing contacts: Everyone else in your database, which cost significantly less

According to Klaviyo's official documentation, you're essentially paying premium prices for contacts who are actively receiving your communications.

The key insight? Those long-dormant subscribers you've been keeping "just in case" are much cheaper to store but still bloating your bill unnecessarily.

The Costly Truth: 5 Ways You're Wasting Money on Klaviyo

After auditing 12 different DTC brands, I've identified five common ways e-commerce stores are overpaying:

1. Keeping "Graveyard" Subscribers

The average Klaviyo account I've audited has between 40-70% completely inactive subscribers. These are people who haven't opened a single email in 6+ months and likely never will again.

They're not just costing you money - they're actively harming your deliverability by signaling to email providers that your content isn't engaging.

2. Redundant Profiles

Many brands have duplicate profiles for the same customer across multiple lists or segments. Each duplicate counts as a separate contact for billing purposes.

3. Ignoring Profile Merging

Klaviyo has powerful tools to identify and merge profiles that belong to the same person (like when someone signs up with different email addresses). Most brands never configure these settings.

4. Over-Including in Campaigns

Sending every campaign to your entire list ensures you're paying maximum prices for all contacts, even those who only need transactional emails.

5. Neglecting Sunset Policies

Without automated systems to handle disengaged subscribers, you're continually paying for people who provide zero return on investment.

The 30-Minute Fix: Automated Subscriber Management System

Here's the exact system we implemented to slash our client's bill from $2,800 to $675 monthly:

Step 1: Identify Your Inactive Segments (5 minutes)

Create three key segments:

1. Deeply Disengaged: No opens or clicks in 180+ days

   • Definition: Has not opened OR clicked email in last 180 days AND has received at least 5 emails

2. Moderately Disengaged: No opens or clicks in 90-180 days

   • Definition: Has not opened OR clicked email in last 90 days AND has opened OR clicked email in last 180 days

3. At-Risk: Opening/clicking less than 10% of emails in the last 60 days

   • Definition: Has opened OR clicked fewer than 10% of emails received in last 60 days AND has received at least 5 emails

In Klaviyo, go to Lists & Segments → Create Segment → and set up these definitions using the condition builders.

Step 2: Create Your Re-Engagement Flow (15 minutes)

Build a three-part automated flow targeting your Deeply Disengaged segment:

Email 1: Value Reminder

• Subject: "Are we breaking up? 💔"

• Content: Remind subscribers of the value they get from your emails and tease exclusive content/offers

• Include: Clear call-to-action button that counts as engagement

Email 2: Last-Chance Offer (3 days after Email 1)

• Subject: "Your exclusive 20% off expires tomorrow"

• Content: Strong incentive to re-engage with a deadline

• Include: Countdown timer and high-value offer

Email 3: Final Notice (2 days after Email 2)

• Subject: "Confirming your unsubscribe request"

• Content: Create urgency by implying they've already decided to leave

• Include: "Wait, I want to stay" button prominently displayed

For our beauty brand client, this flow successfully re-engaged 8% of deeply disengaged subscribers - people who then went on to generate revenue.

Step 3: Set Up Your Automated Cleaning Flow (10 minutes)

This is the critical automation that will maintain your list hygiene automatically going forward:

1. Create a new flow triggered by membership in your "Deeply Disengaged" segment

2. Add a time delay of 7 days (allowing your re-engagement flow to work)

3. Add a conditional split:

   • If profile has engaged (opened/clicked) in the last 7 days: Exit flow

   • If not: Continue to next step

4. Add "Update Profile Property" action:

   • Set "Suppressed" to "True"

   • Add tag "Auto-Suppressed-[Current Date]"

This flow ensures that only truly disengaged subscribers are suppressed, while giving everyone a fair chance to re-engage.

Important note: Klaviyo charges significantly less for suppressed profiles while still maintaining their data for future reference. This is better than deleting them entirely, which would lose purchase history and other valuable data.

Results You Can Expect

For our beauty brand client, the results were dramatic:

• Month 1: Contact cost reduced from $2,800 to $1,250 (55% reduction)

• Month 2: Contact cost further reduced to $675 (76% total reduction)

• Deliverability: Overall open rates increased from 15.2% to 24.8%

• Re-engagement: 8% of "dead" subscribers became active customers again

• Revenue impact: Zero decrease in email-attributed revenue; in fact, they saw a 12% increase due to improved deliverability

The most surprising outcome? By removing the dead weight, their emails actually started reaching more inboxes instead of spam folders, leading to better overall performance.

Beyond the Basics: Advanced Tactics for Further Savings

Once you've implemented the core system, here are three advanced strategies our most sophisticated clients use:

1. Behavioral Suppression Logic

Rather than treating all inactive subscribers the same, create conditional suppression rules based on:

• Past purchase value (keep high-LTV customers in your active list longer)

• Seasonal buying patterns (keep holiday-only shoppers active during Q4)

• Product category interest (separate suppression timelines by interest area)

2. Pre-Campaign Segmentation

Before sending any campaign, run it through this pre-send checklist:

• Does everyone need this message?

• Can we exclude obviously irrelevant segments?

• Have we excluded recently purchased for this product/category?

One client reduced their effective cost-per-send by 35% with this simple pre-flight check.

3. Progressive Profile Building

Instead of collecting all customer data at once (which counts them as a marketing contact immediately), use a progressive approach:

• Collect email only for newsletter signup

• Request SMS and additional info after engaged behavior

• Use on-site behaviors to enrich profiles without triggering marketing contact status

Implementation Checklist: Do This Today

Here's your 30-minute action plan:

1. Create your three inactive segments (5 minutes)

2. Set up your re-engagement flow (15 minutes)

3. Build your automated cleaning flow (10 minutes)

4. Monitor for 1 week before full commitment to ensure no critical emails are affected

The best part about this system is that it's entirely automated. Once set up, it continues working in the background to maintain your list hygiene and keep your Klaviyo costs optimized permanently.

Common Concerns: Addressed

"Won't I lose potential customers?"

The data is clear: subscribers who haven't engaged in 180+ days have a statistical re-engagement rate of less than 0.5%. You're not losing customers - you're stopping paying for ghosts.

"What about my list size for brand valuation?"

Many founders worry about their list size for acquisition purposes. The solution is simple: track both metrics. Your "total profile count" can still be used for valuation, while your "active subscriber count" is used for marketing effectiveness.

"Will this harm my deliverability?"

Just the opposite. Every major email service provider uses engagement metrics to determine inbox placement. By removing disengaged subscribers, you're showing ESPs that your content is valuable and wanted.

Final Thoughts

Email marketing remains one of the highest-ROI channels for e-commerce brands, but unnecessarily high Klaviyo bills are eating into those margins.

By implementing this 30-minute automated system, you can expect to see:

• 40-70% reduction in monthly costs

• Improved deliverability and engagement metrics

• Zero negative impact on revenue (and likely an increase)

• Better, more accurate data on your actual engaged audience

The beauty brand that went from $2,800 to $675 monthly is using those savings to fund their product development for Q3 - a far better use of capital than paying to send emails to people who never open them.

What could your brand do with an extra $20,000+ per year?

Need help implementing this for your store? Reply to this email with your current Klaviyo bill and list size, and I'll send you custom segment definitions specific to your account.