When Cheaper Isn’t Cheaper: The Hidden TCO of Switching ESPs

When Cheaper Isn't Cheaper: The Hidden TCO of Switching ESPs

It’s a mistake that regularly costs them six figures.

The headline price rarely tells the truth. What matters is the total cost of ownership; the full bill for licenses, integrations, middleware, developer hours, agency support, overage fees, warm-up costs and, most expensive of all, the revenue lost during a botched cut-over.

The false economy of contract price

Loop Earplugs learned this the hard way. They switched from Klaviyo to Emarsys for what looked like a cheaper contract.

Ryely Newman, their CRM lead, explained: “Initially moving to Klaviyo, the monthly cost was going to increase a bit. But when I mapped that over 12 months… other tools to plug gaps, additional development for every fix, overage fees as we grew… we were in a much better position financially if we just ate the cost and went with Klaviyo.”

What appeared cheaper on paper turned out to be far more expensive once the hidden work and additional tools were added back in.

The unseen line items

Brands rarely budget for these costs up-front:

• Middleware to bridge gaps in integrations. Every extra connector is another subscription and another point of failure.
• Developer or agency hours. The more “enterprise-grade” a tool is, the more you’ll spend getting it to do what a marketer-friendly platform might do natively.
• Parallel platform overlap. Most teams keep the old ESP running while they warm up the new one, doubling their spend for weeks or months.
• Deliverability recovery. If the cut-over is rushed, sender reputation dips. The cost is lost revenue, not just lost emails.
• Opportunity cost. Delays in building or sending key flows can mean missing seasonal revenue.

Budget for the whole stack, not the SKU

The best way to avoid being caught out is to budget for a year’s worth of operation, not just the contract fee.

Factor in every tool that will remain, every tool you can decommission, the hours required to connect everything and the expected revenue dip during warm-up.

Ryely’s takeaway is blunt: “The cost was like multiple hundreds of thousands of euros… but the payback was significant once we were back on a platform that actually worked for us.”

The rule of thumb

If a new platform looks significantly cheaper on the invoice, assume you’re missing something.

List the integrations, calculate the hours and add a buffer for the unexpected.

The right ESP often pays for itself by cutting out middleware and reducing developer dependence, but that saving rarely shows in the contract price.

Want to see your real total cost of ownership?

At Polaris, our free audit helps you calculate total cost of ownership and spot where middleware, setup hours, or contract terms are eating margin.

Schedule your free ESP cost analysis today.