Transactional e-mails represent a vast and mostly untapped selling opportunity. Messages such as order and shipping confirmations and account updates generally get opened and clicked far more than promotional e-mails.
Beside the fact that transactional e-mail messages are relevant and targeted, the recipient likely has a good feeling for the sender at the point a transactional e-mail arrives — that is, as long as the sender is not a financial services firm at the moment.
Moreover, transactional e-mails are not considered commercial communications under the Can Spam Act, so there’s no need to include an opt-out mechanism.
According to Jupiter Research, 74% of e-mails companies use to communicate with customers, prospects and partners are customer-service related — or transactional e-mails. So marketers who aren’t taking advantage of them are missing a significant chance to increase revenue.
Also, once a transactional e-mail marketing program is set up — which, granted, can be difficult — it’s automatic.
But naturally, there are challenges and pitfalls.
Most marketing departments don’t own their transactional e-mail systems. So setting up customer service e-mails to sell should involve lawyers and will involve an already likely overworked IT department. No one likes getting the lawyers involved. And in most companies, IT and marketing prefer to work with one another at arm’s length.
“Marketing in transactional messages is a best practice, but it requires some thought,” says Stephanie Miller, vice president of strategic services for deliverability consultancy Return Path. “It isn’t something marketers can just do. It requires collaboration with legal, privacy folks and others. So that hesitancy is a good thing. Pushing it too hard has risk.”
And most companies do a pretty lousy job with the primary purpose of their transactional e-mails, which is supposed to be customer service. Usability expert Jakob Nielsen recently published a study of close to 100 transactional e-mails conducted in two phases, five years apart. The results aren’t pretty.
“Judging by many of the messages we tested, e-mail design often seems to be a side effect of the software implementation and consists of copy written by the programmer late at night,” he writes. “Alternatively (and even worse), some messages are hard-hitting, written by aggressive sales people without a true understanding of Internet marketing’s emphasis on relationship building.”
In addition to order and service confirmations and shipment notifications, Nielsen says his firm also tested reservation confirmations and e-tickets, available-now notices, billing and payment notices, cancellations, returns, refunds, rebates, bonuses; information-request responses; government responses; customer-service messages; failure notices; and registration and account information.
“As the many message types show, transactional e-mail offers abundant opportunities for enhancing a site’s relationship with its customers,” he writes. But few companies are taking advantage of the opportunity.
Nielsen also concludes that marketers’ use of transactional messages didn’t improve in the five years between the two studies. “Transactional messages continue to exhibit the same amount of usability problems as we saw five years ago: vague subject lines continue to dominate, and the body text of many messages continues to be too long, too difficult to scan, and too lacking in clear facts important to users,” he writes.
To make transactional e-mails work, Nielsen recommends that the “from” line in the message contain the company’s brand name rather than a person’s name. People generally open messages only from senders they recognize, he notes.
He also recommends the “from” line be no longer than 20 to 25 characters so the name doesn’t get truncated. And he advises that the subject line be meaningful to the transaction, such as “your order has been shipped” as opposed to “shipping information.”
In any case, there are rules governing the use of commercial content in transactional e-mails.
For one thing, in order to be considered transactional messages by authorities, their primary purpose must be noncommercial. If their primary purpose is determined to be commercial, the Can-Spam Act kicks in and they must include an opt-out mechanism and the sender’s physical postal address.
According to the Federal Trade Commission, “The primary purpose of the message will be deemed to be commercial if either a recipient reasonably interpreting the subject line of the e-mail would likely conclude that the message contains commercial content, or the e-mail’s ‘transactional or relationship’ content does not appear in whole or substantial part at the beginning of the body of the message, [or] a recipient reasonably interpreting the body of the message would likely conclude that the primary purpose of the message is commercial.”
The FTC continues: “Factors relevant to this interpretation include the placement of commercial content in whole or in substantial part at the beginning of the body of the message; the proportion of the message dedicated to commercial content; and how color, graphics, type size, and style are used to highlight commercial content.”
Translation: The FTC can’t give a specific definition of what constitutes a primarily commercial message, but it knows one when it sees it
The 20% rule
As a result, the experts at deliverability consultancy Return Path recommend to clients that commercial content make up no more than 20%, or the bottom fifth, of a transactional message.
“That’s a rule endorsed by privacy folks and the Direct Marketing Association,” says Miller. “ISPs also use that rule,” she adds.
“But it’s 20% based on a number of factors,” she explains. “It’s position, weight, graphical nature and subject line. So it’s not just 20% of the real estate, it’s 20% of the message, which still needs to be primarily around the transaction. If nothing else was graphical, but the bottom contained a big banner, that would be overweighted toward promotion rather than transactional.”
So what types of offers work in transactional e-mail? Evergreens, such as newsletter signups, discounts and white-paper downloads, says Miller.
“Some marketers have to use that because, with the way their transactional system works, they can’t offer dynamic content,” she says. “But the offers that are most powerful are the ones related to behavior [such as cross-selling]. So if you can do dynamic content, that seems to work better.”
And though transactional e-mails present a wealth of marketing opportunities, Miller warns against viewing the messages as a replacement for well-thought-out, relevant e-mail campaigning.
“Transactional marketing is not a free pass to reach your subscribers with messages that are not interesting or relevant to them,” she says. As a result, Miller adds, marketers should avoid the temptation to make up transactional messages that aren’t necessary.
“I’ve had conversations with clients who want to do that,” she says. “And it’s generally not the e-mail manager who wants to do it. It’s that person’s boss. You can’t view this as a way to make up for bad marketing in your promotions, or a way to fool your customers into consuming marketing they don’t really want.”
If merchants try to add more “service messages” to get around the fact that people have unsubscribed, consumers will start to respond by hitting the spam-complaint button, Miller says.
And if enough people complain to their ISPs, the marketer will have trouble getting even transactional messages delivered. “Even worse, it’s going to send a message to the government that we can’t self regulate,” Miller says.
“If it looks and feels like a promotion, consumers will react like it’s a promotion,” she says. “Transactional e-mails are an opportunity, but we as an industry need to be thoughtful about it.”