How to keep your transactional emails out of the spam folder

When engineers encounter a common yet critical problem like transactional emails landing in spam folders, it often leads to frustrating customer experiences, delayed password resets, and missed team invitations. Transactional emails are vital for user trust, onboarding, and functionality, and yet, they are often treated the same as bulk marketing emails under the hood.

This guide explains why that’s a problem, what services you should use, and the architecture you can adopt to ensure reliable deliverability of your transactional emails. We’ll define transactional versus marketing emails, evaluate popular providers like SendGrid and Mailgun, and offer a recommended strategy for using shared and dedicated IP pools for improved deliverability.

What Are Transactional Emails?

Transactional emails are one-to-one messages triggered by a user’s interaction with your platform. These emails are not promotional in nature and are essential for user experience and security.

Common examples include:

• Password reset emails

• Account confirmation or activation emails

• Order or billing confirmations

• System alerts or status notifications

• Team invites and collaboration links

These emails are expected by the user and often need to arrive within seconds. Deliverability, speed, and trust are crucial.

What Are Marketing and Sales Emails?

Marketing and sales emails are mass-sent communications intended to promote your product or engage users. These messages are usually designed to drive user actions like clicking, purchasing, or attending events.

Examples include:

• Newsletters

• Promotional campaigns

• Product announcements

• Customer engagement emails

• Cold outbound sales outreach

Marketing emails have higher risk of being flagged as spam due to their bulk nature and variability in engagement. This is why best practices demand a different strategy than transactional email handling.

Why Transactional Emails Go to Spam

Here are the top reasons transactional emails end up in spam folders:

1. Shared Infrastructure with Marketing Emails: Sending both types of email through the same IP address or domain can contaminate the reputation of transactional messages.

2. Poor IP Reputation: If you’re on a shared IP and others are abusing it, you suffer the consequences.

3. Missing or Misconfigured Domain Authentication: Lack of SPF, DKIM, or DMARC can trigger spam filters.

4. Low Engagement Metrics: ISPs look at open rates and click-through rates, even for transactional emails.

5. Inconsistent Sending Patterns: Sudden spikes in email volume can look suspicious.

   
   

The Players: SendGrid vs. Mailgun

Two of the most commonly used platforms for transactional and marketing emails are SendGrid and Mailgun. Each has strengths, and your choice should reflect your use case.

SendGrid

SendGrid is popular for its broad feature set, marketing tools, and high email throughput. It provides:

• Drag-and-drop campaign builder

• Deliverability insights

• Shared and dedicated IP pools

• Domain authentication support

SendGrid is frequently used for marketing emails but can also be configured to handle transactional emails effectively.

Mailgun

Mailgun is more developer-focused and streamlined for sending transactional email via APIs. Features include:

• Robust sending infrastructure

• High-speed delivery optimized for transactional email

• Built-in support for logs, tracking, and analytics

• Less overhead for campaign management

Mailgun is a solid choice when transactional reliability is paramount and marketing features are not needed.

Strategy Comparison: One Service, Split IP Pools vs Two Services

When dealing with both marketing and transactional emails, engineering teams often face a key architectural decision:

1. Use a single service like SendGrid, splitting responsibilities across shared and dedicated IP pools.

2. Use two different services, e.g., Mailgun for transactional and SendGrid for marketing.

Let’s break down the two.

Strategy 1: SendGrid Shared IP Pool for Transactional + Dedicated IP for Marketing

This strategy simplifies infrastructure by keeping all email under a single provider, while still isolating IP reputations.

Pros:

• Unified dashboard, logs, API keys, and monitoring

• No need to learn multiple service APIs or integrations

• Lower cost of operations and setup

• Easier onboarding and team training

• Can isolate marketing domain/IP reputation from transactional email traffic

Cons:

• Shared IPs for transactional email can be affected by poor neighbors

• Less control over IP reputation for mission-critical messages

• Need to monitor and warm up the dedicated IP pool carefully

Best Practices:

• Use separate subdomains for each pool, such as notify.example.com for transactional and marketing.example.com for campaigns

• Authenticate each domain with SPF, DKIM, and DMARC

• Regularly monitor bounce and complaint rates

• Gradually warm up your dedicated IPs to build a strong reputation

Strategy 2: SendGrid for Marketing + Mailgun for Transactional

This strategy uses each provider for what they do best, keeping transactional email completely separate.

Pros:

• Full isolation of reputations: transactional email is protected

• More control over deliverability and latency for transactional messages

• Redundant infrastructure: if one service has an outage, the other remains operational

Cons:

• Increased complexity in monitoring, integrations, and deployment pipelines

• Two sets of APIs, dashboards, credentials, and webhook systems

• Higher operational overhead and training burden for engineering and support teams

Our Recommendation: Start Unified, Split with Scale

For many teams, especially startups and mid-stage SaaS products, maintaining simplicity is critical. We recommend the first strategy:

Use SendGrid for both marketing and transactional emails, but isolate traffic using shared IPs for transactional and dedicated IPs for marketing/sales.

This provides a streamlined setup with the flexibility to scale. If and when transactional email volume grows—or you start seeing deliverability issues—you can migrate to a dedicated transactional IP or even a separate service like Mailgun.

Key Takeaways for Engineers

• Always separate marketing and transactional traffic either via service or IP pool

• Set up SPF, DKIM, and DMARC records for each sending domain

• Use distinct subdomains to further segment traffic and reputation

• Monitor deliverability and engagement metrics separately for each category

• Avoid sudden volume spikes, especially when warming up new IPs

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As an engineer responsible for email infrastructure, your job isn’t just to hit the send button, it’s to ensure critical emails actually land in the inbox. Users expect transactional emails like password resets and team invitations to arrive instantly and reliably. Any delay or failure erodes trust.

By understanding the dynamics of IP reputation, domain configuration, and email service capabilities, you can architect a solution that balances deliverability, simplicity, and scalability.

In today’s landscape, the combination of SendGrid’s shared and dedicated IP pools offers a practical and robust setup for most use cases. But the best architecture will always depend on your scale, growth trajectory, and technical maturity.

If you're asking, "how do I make sure my transactional emails, like reset password and team invitations, don't get in the spam folders?", this guide gives you the playbook to start strong and evolve intelligently.