What Every Marketer Should Know about Transactional Email

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As every seasoned marketer knows, the ideal outbound email is personalized, targeted to the recipient’s specific interests and most importantly expected. Meeting all of the above requirements, transactional email is fast-becoming the mechanism of choice for businesses looking to make deeper, more meaningful connections with their customers.

The FTC CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act, defines a transactional or relationship message as an ‘email that facilitates an agreed-upon transaction or updates a customer in an existing business relationship’ and further states that such messages, ‘may not contain false or misleading routing information, and is exempt from most provisions of the CAN-SPAM Act.’ Although the basic definition of “transactional” is made clear, the absence of restrictions leaves the door wide open for interpretation—a task marketers are embracing with gusto.

According to ExactTarget, sending an email to an individual in response to an event is widespread across organizations, from customer service to sales. Classified as transactional emails, these messages have historically been:

Sent by business systems not controlled by marketing (IT or the external email service provider (ESP) handles content edits and delivery).
Text-based, with no pictures, links, personalization strings, dynamic content or marketing messages.
Sent “into the dark” without any analysis of deliverability or effectiveness.

It comes as no surprise that the historical approach to sending transactional messages is no longer assumed to be the best approach. “While in-house technologies scale to handle the large volume of transactional messages required to conduct business, they cannot provide the visibility and functionality required to move beyond “blast” messages,” believes Morgan Stewart, director of research and strategy for ExactTarget, “As a result, the performance of transactional emails as marketing opportunities has not been optimized.”

Make It Count

In combing through the glowing testimonials on vendor Web sites, the most oft-mentioned benefit of transactional email solutions, are the analytics and reporting functions. However valuable the numbers may be, many organizations are not yet utilizing the data to its best advantage. Ryan Deutsch, director of strategic services for StrongMail Systems, points out that transactional email lacks the visibility enjoyed by most email marketing applications and that at the most basic level, failure reporting is often very light or non-existent in transactional email streams. “What this means to businesses is that they often have a very difficult time understanding whether or not recipients are getting transactional emails, if the emails are landing in the inbox or the junk folder, and if the images and links in the emails are viewable. As an example, consider an Internet retailer that delivers purchase confirmations and shipping notifications via transactional email,” Deutsch offers. “If these emails are not delivered, or end up in a recipients’ junk folder, an organization could receive a huge number of additional calls into a call center asking ‘Did my product ship?’ Inbound call center costs can be greatly reduced by ensuring stable and consistent delivery.”

Deutsch goes on to say that aside from failure reporting, click tracking can also be hugely valuable to an enterprise. According to a MarketingSherpa study commissioned by StrongMail, 75 percent of respondents said that they opened and read transactional messages ‘Frequently’ or ‘Very Often/Always,’ with only 45 percent saying that they open/read other permission mailings as often. “With the higher open rates afforded by transactional emails, imagine the impact on the same retailer that is able to track interest in product up-sell and cross-sell offers within transactional emails via click tracking statistics,” states Deutsch. “Tracking this activity can drive recipients directly to Web sites for purchase or trigger additional email communications.”

According to Mark Ogne, marketing leader for Acxiom’s digital marketing services, analytics are among the most valuable functions his company offers as they can “wrap analytics around what is normally a blind hole for the marketer.” In 2000, Acxiom purchased a company called MindShare, who defined themselves as a ‘customer intelligence and analysis company.’ “What this provided us,” explains Onge, “was the ability to enable our customers to embed lab style queries in their data. This means that it’s not just one dimensional—how many opened, how many this, how many that—we can overlay on top of the queries many different dimensions under which the data can be analyzed to glean more information from it.”

Data Analysis

Onge adds that early on in the startup and configuration process, Acxiom identifies data points, which may be important to the marketers and does not limit them to what he calls the “canned vanilla perspective”—getting data only from opens and clicks by campaign. “We have about 30 reports that come stock with our interface that allow you, on the fly, to generate any construct for different data points, on your own, in real time,” says Onge. “That’s a big differentiator for us. Typically, let’s say that you have 20 to 50 different prefab reports, but if you wanted to say, “What if we look at it from this dimension AND that dimension.’ That would take you potentially weeks or months to get an answer from your ESP. One of the key Acxiom advantages is that you can develop those queries on your own, on the fly, and find out the custom questions that you need to answer.”

Onge’s perspective on data analysis is that there are two key aspects that need to be addressed, “One is: ‘So you’ve found something out. Do you know what to do with it?’ That’s a marketing strategy type of a question. What does it actually mean to me as a marketer when I’m thinking about trying to improve my program?’ Two is: ‘Okay, I’ve found something out, I’ve thought of something to do with it, but does the product enable me to get that done?’ Each of these things are hurdles that some people conquer better or worse than others.” To aid marketers, Acxiom has layered a services agency on top of the technology and the analytics it provides, covering everything from production and strategy, to account management. Onge adds that Acxiom staff of trained experts help its customers understand what they can do with the data, and then assist them in actually creating a meaningful strategy with it by helping to answer the question: ‘So you’ve come up with a great plan, can you actually achieve it?’

Spam or Not? Discuss

The grey area in the CAN-SPAM Act stems from the ability to include marketing messages in transactional emails, so long as the transactional portion of the message (i.e., the confirmation or acknowledgement of your order) comes first. While it is permissible to include relevant offers related to the initial transaction, how much is too much? The answer varies widely depending on whom you speak with.

“First, do no harm,” says Stewart. “Follow CAN-SPAM by providing a clear and easy way for your subscribers to opt-out of your email messages then honor those requests as quickly as possible. However, don’t forget that the Act also does explicitly permit you to provide a menu of subscription choices to your subscribers, such that they may opt-out of your promotions, for example, but stay subscribed to your monthly newsletter. We’ve found that our clients who provide this type of profile/subscription page see fewer complete opt-outs since they’ve provided their subscribers with a way to opt-down.”

While CAN-SPAM allows marketers to send unsolicited email messages, “Don’t do it!” adds Stewart. “The best practice for deliverability and optimizing the return from email is to send only to those that ‘raised their hands’ and gave you explicit approval to send them email. The first email you send to a subscriber or new customer is often the result of something they’ve done, such as made a purchase or subscribed to your publication. This first ‘welcome email’ is often the most opened or clicked communication a marketer ever sends. It can include commercial information, provided that the email subject line is non-commercial, and that the transactional information precedes the commercial or advertising information. Even better if you can make that ad relevant to the product they just bought. In fact, learning to plan and optimize each communication with each individual subscriber is the ultimate key to a thriving email marketing program.”

To Onge, the notion of “opting-down” runs counter to the definition of a transactional email. “Categorically, transactional mes-sages have one of the highest open rate of any message a marketer can send to somebody so it’s a prime opportunity to offer something relevant to the receiver. If you can do that, you can really increase your ability to sell more to your customer base. The concept of allowing people to opt-down is wonderful, but I think it’s only marginally related to transactional messaging. Transactional messages are a ‘trusted message’ by the recipient. Don’t break that trust.”