Transactional Emails - Marketing's Trojan Horse

Every company struggles to get prospects and customers to open up the emails they send. The average open rate for marketing emails, across all industries, is 21.5% (Campaign Monitor). Even more depressing is that the average click-through rate, across all industries, is only 2.3% (Campaign Monitor). It is a constant struggle for marketers, who A/B testing every element, to tweak just a few fractions of a percentage increase.

The reason we spend so much time and effort is that email marketing is a cost-effective method of attracting and nurturing both prospects and customers. For a refresher, as to the benefits, see our article called: “Email Marketing is Not Dead – You Just Forgot the Benefits.”

What if you could waive a magic wand (homage to Harry Potter fans) and suddenly the open rate for your emails exceeded 80%? Imagine how much more you could sell if that were the case. Well, we don’t have a magic wand, but we do have a trojan horse that will accomplish the same thing! The name of our trojan horse is transactional emails.

Transactional Emails

Transactional emails are the most anticipated boring email that you ever receive. Every one of us has gotten a transactional email. In fact, you may get several in a day. A transactional email is an automated message that is sent to an individual in response to a specific action or transaction. Examples of transactional emails are:

• Welcome emails

• Notice of shipment

• Order confirmation

• Password Reset

• Payment Confirmation

• Cart Abandonment

What makes these the trojan horse of marketing is that they are almost always opened by the recipient. The reason for that is simple the person receiving the email is being benefited by what is being sent. If you lost your password, you are certainly going to open up the email that allows you to change that password and renew your access to an account. If you just purchase an item through an online store, who isn’t going to check the order confirmation or notice of shipment?

Unlike promotional emails, which are designed to market products or services, transactional emails are primarily functional and provide important information related to a user's interaction with a website or application.

So, just like the trojan horse, the recipient will always open the “gate” to allow the email in, and that is where we can deliver a surprise to them in the form of marketing material. But first, let’s drill down some more on transactional emails.

The Power of Transactional Emails

The open rate for transactional emails tends to be significantly higher than that of promotional emails. Transactional emails have an average open rate of 80-85% (Mailgun). This is significantly higher than marketing emails, which as earlier reported, have an average open rate of 21.5% (Campaign Monitor).  

For e-commerce transactions, the open rate is even higher. This high open rate can be attributed to the fact that these transactional emails contain information that the recipient is actively expecting, or requires, to complete a transaction. In fact, transactional emails have 8x more opens and clicks than any other type of email and can generate 6x more revenue ( Experian). Adding quality content (e.g. infographic or video) to a transactional email means that it will be opened and viewed, where a sales email might not.

For those who are not ecommerce sites, take heart, as studies have shown where SaaS companies have incorporated the use of transitional emails, they have increased sales by upward of 34%.

Primary Benefits of Using Transactional Emails- Let’s be frank, the primary purpose of transactional emails is not to promote new products to the recipient. However, even without trying to upsell the client, they do far more than just communicate factual information.

Enhanced User Experience– The primary reason for transactional emails is to provide users with important information and updates related to their interactions with a website or application. By delivering timely and relevant information, transactional emails enhance the overall user experience and help build trust and confidence in the brand.

Brand Recognition – Out of sight out of mind is a true axiom in marketing. The prompt response to a password reset request, or other requests, shows both your logo and the responsiveness you have to their needs.

Improved Email Delivery - When emails go unopened from a business, it will affect their reputation with the internet service providers, Google, and other email providers. If you’re not careful, you’ll end up with a low sender score, which hurts your ability to deliver an email to someone’s inbox or possibly get blacklisted altogether. Transactional emails help prevent this, because they are opened at a higher rate.

Increased Customer Engagement -Transactional emails provide an opportunity for businesses to engage with their customers beyond the initial transaction. By including personalized content and relevant recommendations, businesses can encourage customers to further interact with their products or services.

Improved Customer Retention - Transactional emails can be used to deliver post-purchase information, such as order tracking details, delivery updates, and customer support contact information. By providing a seamless post-purchase experience, businesses can increase customer satisfaction and improve customer retention rates.

Using Transactional Emails to Promote New Sales

Transactional emails can be used to upsell and cross-sell by sharing new product offers each time you send one to your customers. This is an extremely cost-effective marketing channel for a business, because it can leverage the open rates that transactional emails enjoy. Make sure you personalize the messaging, because personalized transactional emails have a 25% higher open rate and a 51% higher click-through rate than non-personalized emails (Experian).

Some of the ways to optimize the use of transactional emails to generate sales include:

Personalized Product Recommendations- Include personalized product recommendations in all transactional emails. Analyze your customer data and purchase history and present the recipient with complementary products or accessories that the customer might be interested in.

Exclusive Offers and Discounts– Make your customers feel special and encourage repeat purchases by including exclusive offers or discounts in transactional emails.

Cross-Sell and Upsell Opportunities- Use transactional emails to highlight cross-sell and upsell opportunities. For instance, if a customer has purchased a camera, the email can suggest additional lenses or accessories that would enhance their photography experience.

Customer Feedback and Reviews- Request customer feedback and reviews in transactional emails. By including a simple survey, or review form, businesses can gather valuable feedback and testimonials that can be used to improve products or services and attract new customers.

Loyalty Programs and Referral Incentives- Promote loyalty programs or referral incentives in transactional emails. Encourage customers to join loyalty programs or refer their friends by offering exclusive rewards or discounts.

Conclusion

Whether you have an e-commerce store or are a b2b SaaS company, by incorporating these strategies into transactional emails, businesses can effectively promote new purchases and drive customer engagement and loyalty.

Transactional emails play a vital role in providing essential information to users and enhancing their overall experience. With their high open rates and the ability to deliver personalized content, transactional emails offer businesses an effective and cost-efficient marketing channel. By leveraging transactional emails to promote new purchases, businesses can drive additional revenue and foster long-term customer relationships.