An extensive guide to transactional emails

Marketing keeps evolving, and new communication methods keep emerging, yet email marketing continues to have the highest return on investment. With over 293.6 billion emails being sent every day, it's no surprise that emails are among the most effective channels. Marketers send a variety of automated emails, but every behaviorally triggered email is not a marketing email. The most personalized kind of email sent is - transactional emails.

What is a transactional email? 

A transaction email is an automated, real-time mail triggered by the customer’s events, behavior, interaction, purchases, and other activities. Since an action performed by the customer triggers these kinds of emails, they’re also called 'triggered emails' or 'automated emails.’ Transactional emails are highly personalized and contain information that is directly related to the customer. 

Transactional emails tend to have high open and engagement rates since the customer initiates them. As they’re transactional and critical in nature (for example, invoice emails, purchase confirmations, etc.), they should have a high delivery rate. For better understanding, let’s look at how transactional emails are different from marketing emails.

Difference between marketing and transactional emails

It might be confusing to differentiate between marketing and transactional emails at first, but the dominant difference is the email’s goal. If you want to send your subscribers to a specific page or act on something (call-to-actions), you will send them a marketing email. On the other hand, if you want to give confirmations and provide information triggered by customers’ behavior, then you’re sending a transactional email. Unlike marketing emails, customers don't have the option to unsubscribe from transactional emails, so it's essential to have a clear understanding of the difference to ensure you're careful how you use them.

Transactional emails

An action initiated by the customer triggers a transactional email. These emails are personalized and unique to the recipient, and thus, are one-on-one. Transactional emails are of high priority, have critical information, and should always reach the customers’ inbox on time. 

Some examples: Abandoned cart emails, order confirmation, shipping information, password resets, bank statements, etc.

Marketing emails

Marketing emails are commercial messages sent out by the brand to subscribers to engage or sell to them. They contain marketing and promotional content and are sent to entire segments of subscribers, i.e., are one-to-many in nature. 

Some examples: Newsletters, product updates, sale alerts, cross-sell/up-sell campaigns, discounts and offers, etc.

Types of transactional emails

Transactional emails play a crucial role in giving business-critical information to customers, and they need to be prompt. There’re many kinds of transactional emails, all triggered by a customer activity. Here are some of the common types of transactional emails everyone receives in their primary inbox:

Order confirmation email

The most common transactional email is the order confirmation email companies send to their customers when an order is placed.  These emails are sent as a reassurance to the customers regarding their order and confirm the details of their purchase. 

Here’s an example of an order confirmation from DoorDash that gives the details of the product ordered, where it needs to be delivered, the estimated time of arrival,  the total amount paid, and the receipt. This email also has a secondary goal - to refer to a friend. Transactional emails can also be used to increase engagement, but that can never be the primary goal.

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Cart abandonment email 

When people shop online, they replicate their window shopping by adding things to their cart. 88.05% of the online orders were abandoned in March 2020. In today’s world, people have more information and do more research before buying a product online. So, there may be various reasons why customers don’t complete their transaction and leave their products in the cart.  

As a marketer, you can send them an email intimating them of the items they’ve left behind, to nudge them to complete the purchase. Cart abandonment recovery rates are high, and people open cart abandonment emails often. Here’s a cart abandonment email sent by Kate Spade, telling the customers that they’ve left something behind, and giving additional discounts to convince customers to complete the purchase.

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Shipping notification email 

Shipping emails are essential transactional emails since they alert the customers when their order has been shipped, and give details of when they can expect the delivery. By providing tracking information, you give customers complete transparency and insight into their delivery process.

This is an email from Everlane, confirming that the order has been shipped and should be delivered in 3-5 days. It comes with the tracking ID so that the customer can keep track of where their package is, along with the order summary.

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Delivery confirmation email 

As the name suggests, a delivery confirmation email is triggered as soon as the delivery person marks the product as delivered. Brands can use these to continue their communication with the customers, allow the customers to raise a complaint if the product hasn’t been delivered to them, and ensure that customers are satisfied with the purchase. 

Here's a delivery confirmation from Amazon, which not only confirms that the product is delivered, but allows the customer to give a review of the delivery experience. The only CTA is to take customers back to 'Your Orders' on Amazon and return or exchange the product for more satisfaction.

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Double opt-in emails

A double opt-in email is sent to double-check with your customers if they’re sure that they want to receive your emails. The objective of a double opt-in process is to add another layer of filter to your subscriber list. In case the subscriber has put in a fake email address, or accidentally typed the wrong email ID, a double opt-in email ensures that these emails don’t get added to your contact list. This ensures that there won’t be any hard bounces from your email, which automatically would improve your email deliverability. 

Moreover, it makes the opt-in process GDPR-compliance. You’d have explicit consent from each of your subscribers, and save yourself from any future legal issues. Look at this email from the Pool which asks subscribers to confirm their email address, and verify that they’re interested in the daily email.

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Password reset emails

All of us have forgotten our passwords at some point or the other, tried to login, and received a password reset email immediately afterward. These kinds of emails are time-critical, and also safeguard the accounts of customers. 

When you click on ‘Forgot password’, Dribble sends this simple email. The sole objective is to let customers reset their password while ensuring that no other person has access to their account. Just click on the CTA, and it would take you to the ‘New password’ page.

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Legal update emails

These emails are sent to customers to update them about any changes to the brand’s legal documents, privacy policy, or terms and conditions. Unlike other transactional emails, these are not triggered by customers’ actions, but depends on when said changes are valid. Brands have to ensure that these emails are delivered at any cost, and cannot be sitting in the spam folder, which is why they come under the category of transactional emails. 

This email from Twitter gives complete transparency to its users into their privacy policy and how Twitter is protecting user data. It's elaborate because you've to provide full information, clarity into compliance, and exact dates when the documents were updated.

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Welcome email

A welcome email is sent to new customers/subscribers, right after they’ve signed up for any of your services. It confirms that their account has been created, and informs the subscribers about the next steps that they should take. Welcome emails have 4 times more opens and 6x the click rate than a regular marketing email since they are delivered when the customers' interest in your service is at the highest. 

Here’s an example of a welcome email from Duolingo.  This app-based language learning platform personalizes their welcome email with the customer’s name, the language they want to learn, and how to learn effectively using the app. Not only does it give the customer their account information, but also nudges them to use the product.

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Security and account alerts

Security and account-related emails are important emails to keep your customers informed about any unusual activity regarding their account like a new login or if there’s a login from a new device. This is a security feature that ensures the customers’ information is safe and acts as a check if the account is being compromised.

An example of Microsoft sending its customer a security email notifying that their account might have been accessed by someone else, and they’ll need to verify the customer’s identity and change the password to be able to log in again.

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Feedback or support email

This is an entire category of emails triggered when a user needs support. For instance, a user is facing complications and they raise a support ticket. A confirmation email would be sent to the user immediately, confirming that the support ticket has been raised, and a customer support executive would be getting in touch soon. After support is provided and the ticket is closed, another transactional email is triggered to ask for feedback on the support. 

Dropbox sends this email when you contact their support team. It clearly reaffirms the support provided and asks for feedback on their services.

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Importance of delivery rate and deliverability in transactional emails

Email delivery rate and deliverability rate are both important parameters to monitor the performance of your transactional emails. Often time’s emails are filtered as junk and end up in your customers’ spam folder, and other times the email hard bounces from the subscribers’ server itself. If not taken care of, both can affect the ROI of your emails, open rates for your email IDs, and ruin the subscriber experience. For starters, let’s understand the importance of email delivery and deliverability in transaction emails.

Email delivery rate

Email delivery is when your email has successfully reached the server of your recipient. Every email has to go through an authentication process by the email server, which is based on the information that Email Service Providers (EPS) provided when an email was rejected or bounced.

Transactional emails are so relevant, that you cannot afford for them to not be accepted by the recipient's email server. Many brands use email marketing softwares that offers a separate IP address, specifically for transactional emails. The reputation of the IP address is the most important thing for your brand.

Email deliverability

Email deliverability is when your email actually reaches the primary inbox of the recipient instead of landing in the spam or junk folder. You need to assess your transactional email's open rate to ensure that your emails are even being delivered to the right inbox. 

Spam complaints and inactive email addresses are the leading causes of failed email deliverability. Transactional emails are time and business-critical emails, and they need to reach the subscribers’ primary inbox. 

Choosing an email marketing software for transactional emails

Using the right email marketing software becomes crucial when you're trying to communicate with your customers, especially if it's to send transactional emails. It is of utmost priority that you select software based on the following factors:

Dedicated IP address

The software you choose needs to offer different domains for your transaction and bulk/marketing emails. Having a dedicated IP address gives you full control over the security of the domain, and thereby prevent any threats that can impact your reputation.

High-security standards

You have to ensure that your email marketing software fulfills all the email security standards, and implements them for you. DKIM, SPF, DMARK need to be set in place before you start sending transactional emails. 

  • Authenticating your emails with DomainKeys Identified Mail (DKIM) ensures that your emails are protected against malware that tampers or modifies your email content and helps build your domain’s reputation. 

  • Sender Policy Framework (SPF) identifies reputed servers that’re deemed reliable to send emails on behalf of your domain so it doesn’t end up in the spam folder.

  • Domain-based Message Authentication Reporting and Conformance (DMARC) is designed to protect you against phishing attacks and uses DKIM and SPF to monitor your domain's reputation by setting up a DMARC policy.

 The policy helps email providers in handling unauthenticated emails. Phishing attempts have grown by 65% over the year, so it only makes sense that your domain is authenticated using the best security standards.

High delivery rate

Before going ahead with an email marketing software, you need to know the email delivery rate they have. Every tool will have delivery rates depending on how their existing customers use the product, and a high delivery rate clarifies that they ensure their customers follow the right guidelines while sending emails.

Analytics

Monitoring and tracking every aspect of your email’s lifecycle is crucial for the success of your transactional emails.  Having detailed information on the delivery rate, bounce rates, email open rates, click-through rate, and spam reports will help you fix issues and ensure you reach your customer's inbox.

Freshmarketer and email delivery

With Freshmarketer (formerly Freshworks CRM), you don’t have to worry about the delivery and deliverability of your transactional emails. Use a dedicated IP address pool to send transactional emails so that emails land straight into your customers’ inbox.  Completely compliant with all security standards and capabilities, Freshmarketer comes with a strict spam control policy, domain authentication, and more, ensuring the delivery of your critical emails.

Setup email templates within minutes with Freshmarketer’s drag-and-drop builder, and maintain your branding colors across all emails. 

You can use customer journeys to automate all the different kinds of transactional emails. Create triggers, actions, and conditions, to ensure emails are sent in a timely manner, as soon as the customer does an action.  

A/B test your transactional emails to see how you can place a secondary goal - feedback, promotion, etc., to get more out of your emails. Get granular details into your transaction emails, and keep your subscribers always informed.

Conclusion

With thousands of transactional emails being sent every day, they’ve become an essential part of the customer journey. Since the customers trigger transactional emails, the open rate of these emails is higher than a promotional email. IF used correctly, transactional emails can positively impact the engagement and reputation of your brand.