email marketing

Transactional Email: what is it, and how can it help your business?

What is transactional email?

If your business sells products online, then there’s a pretty strong chance you’ll have heard the term ‘transactional email.’ In fact, you might even be carrying out transactional email marketing without ever really meaning to.

Transactional email marketing refers to a type of automated email marketing which is sent, or ‘triggered,’ upon a pre-defined user action. The most popular types of transactional emails are:

  • Account Creation
  • Forgotten Password
  • Order Confirmed
  • Order Shipped
  • Order Refunded
  • Cart Abandonment / Remarketing
  • Delivery Confirmation
  • Customer Feedback

These emails are designed to serve primarily as a reassurance for users that an action they have completed has been acknowledged, or a product they have purchased has gone through a process update or change (experian).

High revenue per email results and strong transaction rates demonstrate the significant monetary value that transactional messages can add to any email program

Experian transactional email

Transactional emails help users stay up-to-date with where their order is up to, which is considered a significant and useful trust signal for your brand. However, emails in this format can also be used for marketing purposes. Brands are quickly learning that these automated emails can deliver a significant ROI.

How can marketers use transactional email?

Here at Clicky, we believe that using transactional email simply for product updates is something of a wasted opportunity.

Whereas traditional marketing emails might have an open rate between 10-25%, transactional emails can expect an open rate of 30-40%.

Due to the fact that customers are far more likely to open and engage with transactional emails, it makes sense to try to use these for marketing purposes too. There are ways that we can try to utilise transactional emails for marketing purposes.

  • Upselling – this might just mean showing customers products which are similar to the ones they’ve just purchased, or to highlight the pairing of products which are frequently bought together
  • Referrals / Sharing – this could include offers for customers who have purchased particular products or to provide additional discount codes which they could share with friends or family. This strategy is a great way to get customers thinking about that second, third, and fourth purchase
  • Content Promotion – alternatively, we’ve worked with clients who have found success from emailing relevant content pieces based on products users have purchased – for example, promoting content about where to eat in Prague for users who have just booked a hotel in that location. This is a really effective way to encourage customers to see your brand as more than just a store

Transactional emails are more than just simply sending product updates; you can engage with customers at the significant moments of their purchase journey (dma).

Whilst 26% of brands said they use email marketing for sales, only 7% said that they use it for brand-building and awareness.

Of course, we would tread with caution here – you don’t want to risk irritating customers by overwhelming them with content about your latest competition. When considering transactional email, the primary purpose must be product or service driven.

How does transactional email and GDPR work?

Ah, the GDPR question! Whilst we would never want to advise anybody solely on GDPR (please talk to your legal team), email marketing has certainly experienced a bit of a shake-up since the legislation was introduced. Transactional email (like all email marketing), does need to conform to certain guidelines in light of GDPR.

In particular, if your brand is conducting email marketing, you must be mindful of customer opt-in rules and providing consent (the user must have given explicit permission to acknowledge that you can email them), as well as providing the ‘right to be removed, and enable customers to have their data deleted at any point upon their request. Thankfully, the majority of email marketing platforms allow you to comply with these regulations without a great deal of hassle.

How much does transactional email cost?

Surprisingly, transactional email requires a relatively small investment to get set up with your online store. The vast majority of online stores (WooCommerce, Shopify, etc), feature super-handy plugins that allow you to work with email platforms.

Naturally, the cost will depend upon the number of emails you intend on sending and how comprehensive you’d like your automation to be. We’ve worked with clients who are looking for a budget option (for which, something like MailChimp and Mandrill can serve perfectly well, feasibly starting from as little as £50 per month), to a far more comprehensive solution (tools like Marketo, for example).

Other platforms you may have heard of include SendGrid, Campaign Monitor, and Mailgun; all of which are great platforms but offer varying levels of design features and automation.

Transactional email and product marketing is something which most brands can start using for a relatively small investment, and if you know how to manage and segment your customer lists effectively, can certainly demonstrate a significant ROI.

Think email marketing is right for your business?

If you’d like to learn more about transactional email, check out our email marketing page, or, if you're looking for help now, get in touch with our Email Marketing team today.

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Written by David Berry

Head of Performance & Analytics