What if I told you that you’re probably sending a high volume of unoptimized emails every single day?
That’s the case for many companies because they just plain neglect transactional emails. Frankly, money is lost whenever one of them arrives in an inbox.
What is a transactional email?
These types of emails are typically used to provide important information to customers, such as an order confirmation or shipping notification.
Transactional email vs. bulk email: What's the difference?
Transactional emails and bulk emails are polar opposites on the spectrum of email marketing.
Bulk emails are messages that are sent to a large group of recipients (like a marketing list or segment), usually for marketing or promotional purposes. Bulk emails are typically used to promote a product or brand, announce a sale or a special offer, or to provide general information about a company or organization. The content of bulk emails is usually intended to be the same for all recipients, and the emails are usually sent to a large list of recipients at one time.
Transactional emails are sent with far more precision. They usually trigger on a specific event or action taken by a customer, on a 1 to 1 basis.
The main difference between transactional and bulk emails is their intent and purpose. Transactional emails are intended to provide relevant and specific information to a customer, where as bulk emails are intended to promote a product to a large group of recipients.
Transactional emails tend to have higher open and click-through rates, because they are so tightly aligned with recent actions or events. Transactional emails are a great tool for enhancing domain reputation because of this fact.
It's also important to note that the privacy regulations regarding sending email are different for transactional and bulk emails. Transactional emails are subject to less restrictive laws, as they are considered a necessary part of doing business and relate directly to an action taken by your customer. Bulk email may be subject to stricter laws, such as the CAN-SPAM Act in the US, and GDPR in the European Union, where the bar of explicit consent is much higher.
In short, transactional emails are automated, triggered by an action, and sent on 1 to 1 basis, while bulk emails are sent to much larger audiences, with a marketing or promotional intent.
Why do transactional emails matter?
Transactional emails have one important differentiator: they’re highly anticipated, leading to improved deliverability and increased engagement.
In fact, Experian found that transactional emails: are more likely to be opened, are more likely to be opened repeatedly, and generate more revenue per email than promotional emails. Take a look at the numbers…
You might be thinking that you don’t send enough transactional emails to warrant optimization. In almost every case, that assumption is incorrect.
Actually, SendGrid has reported that, on average, 45% of actions within a web app trigger some sort of transactional email. The result? The average app sends 631,000 transactional emails every single month.
While there’s less data on the volume of eCommerce transactional emails sent, you can draw your own conclusions about how high it is.
Needless to say, optimizing your transactional emails can mean major ROI. You can use them to upsell, encourage reviews and referrals, cross-promote other products, etc.
But if you’ve never done transactional email optimization before, it can be overwhelming. It’s a different beast so to speak.
Types of transactional emails to optimize (and best practices)
Depending on your product offering and conversion funnel, transactional emails will differ. However, here are some fairly common ones…
- Shopping cart abandonment emails.
- Order confirmation emails.
- Shipping confirmation emails.
- Customer feedback emails.
- Account confirmation emails.
For now, let’s focus on three categories: welcome emails, confirmation emails, and notification emails.
1. Welcome Emails
The role of the welcome email is threefold:
- Answer remaining questions about the product(s); offer support.
- Demonstrate the value of products purchased / considered.
- Move them a step closer to personally experiencing that value.
When optimizing welcome emails, your focus should be on those three factors.
Good Example: One Kings Lane
Take a look at this welcome email from One Kings Lane…
They get quite a few things right with this one. To break it down…
- Highlights the value proposition simply and clearly.
- Establishes a reason for them to remain subscribed and / or visit the site daily.
- The first three CTAs are all buy-oriented.
- A mode for asking questions and getting support is clearly marked.
- There is a secondary call to read the blog for shopping inspiration, which is ideal for people not as far along in the buying cycle.
Great Example: Thrive
An even better example comes from Thrive…
Rarely do you see such a focused and persuasive welcome email, especially in the eCommerce space…
- Again, the value proposition is simple, clear and prominent.
- The additional 15% coupon creates a sense of urgency and reduces barriers, allowing them to experience the value more quickly.
- The value proposition is reiterated continuously, even in the “how it works” section.
- Social proof is a powerful motivator. Instead of leaving it stuck at the bottom of some landing page, here it is for everyone to see.
- Whether it’s that you can save on items from top brands in multiple categories or the health-conscious mentality, messaging is continuously reiterated.
- There are no competing CTAs. It’s all about getting them to spend money.
2. Confirmation Emails
Confirmation emails should be designed with two things in mind…
- First and foremost, you need to confirm that the action has been taken.
- You should answer an unspoken, but burning question… “Now what?”
Sounds simple, but it’s incredibly easy to stray from this model. Very rarely do I come across an eCommerce site that has taken both of these principles into consideration.
When done right, these emails can be quite impactful…
Bad Example: Stocksy
Now, Stocksy designed a beautifully clean order confirmation email, but it’s not everything it could be…
What’s this email’s answer to the “now what?” question? It’s “wait for your products to come in”. Smart eCommerce sites are already thinking about the next sale.
Great Example: Huckberry
Take, for example, Huckberry’s approach…
They take a page out of Amazon’s playbook and recommend other popular products to entice the customer back into the buying cycle.
3. Notification Emails
Notification emails are tricky as they are often less anticipated than other types of transactional emails. However, if you follow these simple principles, you can make them work…
- Keep the emails visually consistent.
- Stay functional and non-intrusive. (No one wants multiple notifications on a regular basis.)
- Motivate the person to take action on your proposed value.
Keep these three principles in mind as you look at these next two examples.
Great Example: Bonobos
Here’s a very literal notification email from Bonobos…
Aside from the fact that it’s pretty funny, it’s…
- Visually consistent with what you’d expect an internal memo to look like.
- Subtle and understated instead of in-your-face and aggressive.
- Simple and focused. Its function is to get a referred customer to begin shopping.
- The most wanted action is minimal. There’s almost no friction… just choose your preference.
Great Example: Dollar Shave Club
Dollar Shave Club does something similar with a pre-shipping notification…
Now this is just plain clever…
- Since the products are shipped monthly, it’s easy to set it and forget it. Of course, that limits revenue potential. Dollar Shave Club found a simple solution.
- Everything listed is under $10. They’re easy, last minute “I want that” buys. Think of it like checkout line shopping. Next month? The newly selected products are shipped out again.
- If an eCommerce site gets this far with a notification email, this is typically where it stops. Some “suggestions for next time”. Of course, you might not get the suggestions right and should give the full store option.
- Finally, notice the “Invite friends, get $5”. What that really says given the context is “Invite friends, get 50-100% off one of the above items”.
Mistakes ecommerce companies make with transactional emails
1. Letting Developers Write the Copy
Developers and third-parties are often the authors of your transactional emails while marketers are often the authors of your bulk promotional emails.
Why? Because the transactional email development process is more complex. The HTML needs to be compiled from different templates and dummy data. It even occasionally needs to be run through pre-processors, so you aren’t dealing with a WYSIWYG situation.
Obviously you can lean on your development team to figure out the technical side, but they shouldn’t be the ones writing your copy. You’ll probably end up with something overly functional that reads like it was written by a robot.
Having a third-party who knows absolutely nothing about your audience or product write the copy is even worse. (Even if the copy and design looks optimized, take control. Do your own conversion research, run your own A/B tests.)
Make a list of all of your transactional emails in a spreadsheet. Who wrote it originally? Who do you need to talk to before you can have it changed? Then, you can begin the optimization process.
2. Forgetting About Deliverability
Email optimization means absolutely nothing if your deliverability is in the toilet. You’re just wasting your time.
Since transactional emails are more anticipated, some optimizers believe they don’t need to focus on deliverability as much. Of course, that’s a naive assumption. According to ReturnPath, 22% of opt-in emails never make it to the inbox. 22%. Deliverability is never a sure thing.
Poor deliverability is actually even more of an issue for transactional emails because not only are you losing potential revenue, but you’re losing customer trust. After all, that missing email was expected.
Let’s say you have 10,000 new email addresses. Are you comfortable knowing that 2,200 of them might not have received their order confirmation email?
Here’s the deliverability checklist I use to ensure my emails end up where they’re supposed to…
- Offer a clear opt-in and opt-out.
- Don’t buy lists. Routinely clean out your lists to avoid spam traps and hard bounces.
- Avoid being added to a major blacklist at all costs.
- Maintain a low complaint count.
- Choose a sending schedule and keep it. Consistency matters.
- Make sure your emails are relevant and well formatted.
- Use a dedicated IP for transactional emails. Sharing means sharing a reputation.
- Your sending address must be able to receive email.
- Signup for ISP feedback loops and remove anyone who complains about an email immediately (set up “postmaster” and “abuse” mailboxes).
- Secure your mail servers. Don’t use open relay or open proxy.
- Learn about Sender Policy Framework (SPF) and Domain Keys Identified Mail (DKIM).
- Identify all of the machines, IP addresses and sending domains you use.
- Create your authentication records.
- Whoever manages your DNS can help you publish your authentication records. First, publish your records in test mode.
- Ensure your mail server is signing outbound emails with DKIM.
- Is this timely?
- Is this relevant?
- Is this legal?
- Transactional emails are technically exempt from CAN-SPAM, but it’s best to follow it anyway.
- Is this digestible?
- Plain text version included?
3. Not Choosing the Right ESP
There are plenty of ESPs offering transactional email services and there isn’t a one-size-fits-all solution. Each of them have advantages and disadvantages. Spend the time to conduct the research. Find out which one is the best option for you.
That being said, there is one very important thing to keep in mind before choosing.
When it comes to transactional emails, not all ESPs offer the same A/B testing options you’re used to. That sucks, so make sure you are 100% sure A/B testing is a possibility before committing to an ESP.
On the topic of A/B testing transactional emails, remember to…
- Calculate your required sample size upfront so that you’re not polluting your test results with inaccurate data.
- Measure as close to the money as possible. Increased opens and clicks are nice, but more money in the bank is nicer.
How to master email segmentation & personalization
Transactional emails are inherently pre-segmented and pre-personalized. After all, they’re triggered based on the actions of an individual. However, it’s still up to you to decide what actions should trigger an email and what that email should say.
You have limitless options, but here are a few ideas to get you started. You can segment based on…
- Products browsed.
- Products purchased.
- Favourite product category.
- Average order size.
- Cart contents.
- Geographic and demographic data.
Here’s a creative example from Doggyloot…
Whenever it’s a dog’s birthday, an email is triggered prompting customers to purchase a gift to celebrate their little friend’s big day. CTR on these emails is 750% higher than average.
You’re going to have standard transactional emails to optimize right away, but that doesn’t mean you have to stop there.
An ESP or app won’t do the hard work for you. You have to be the optimizer.
When it comes to optimizing transactional emails, here’s what you need to remember to get started…
- Transactional emails are opened more often and generate more revenue per email than promotional emails.
- Welcome emails must answer remaining product questions, demonstrate product value and move them closer to experiencing the value.
- Confirmation emails must confirm the action was taken and answer the question of “now what?”.
- Notification emails must be visually consistent, functional and non-intrusive, and motivational.
- Don’t let your developers or a third-party write the copy for your transactional emails.
- Make deliverability a priority and go through the checklist step-by-step.
- Choose an ESP that allows easy A/B testing. When you do A/B test, calculate your sample size upfront and measure close to the money.
- You can expand beyond the basic and “typical” transactional emails. Get creative!
If you enjoyed this post on optimizing transactional emails you can go to the email gallery to see our collection of transactional emails.