E-commerce Link: Rise Above the Fray
How to tap into the power of transactional e-mail
August 2006 By Ken Burke
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While marketers wring their hands over how to solve the problem, many are missing out on an obvious e-mail strategy; one that is fairly simple to implement and far more likely to capture new business. It’s called transactional e-mail, and it’s both an underused and underappreciated marketing tool you can use to drum up more business.
The Potential of Transactional E-mail
Transactional e-mail encompasses all messages you send to visitors who have already conducted a transaction of any kind on your Web site. It includes anything from an order confirmation to a shipment status update to warranty information to a product recall or upgrade notice.
Transactional e-mail is proving far more effective at reaching audiences than traditional opt-in e-mail, according to aggregated data from e-mail service provider Harte-Hanks Postfuture. Customers open these messages more than 70 percent of the time, with a clickthrough rate of more than 50 percent when the message includes a redeemable discount offer. Compare those impressive numbers to a mere 35.5 percent open rate for opt-in messages and a clickthrough rate of just 6.6 percent, according to e-mail marketer ExactTarget. When used properly, transactional e-mail can be a far more effective way to market your products and services.
How to Make Transactional E-mail Work
Transactional e-mail performs well for one obvious reason: You’re following up with customers or people who’ve already signed up to receive information from your company. Research has found that clickthrough and open rates are the highest in the minutes, hours and days following a transaction—a prime time for marketers to reach customers with relevant offers relating to a recent purchase or activity. At the very least, a promotion tacked onto a customer’s receipt has a far better chance of finding a captive audience than a random e-mail.
It’s important to note, however, that tapping that potential is the marketer’s job. It’s not a back office function relegated to the IT department. As an afterthought, these messages often fail to reach their potential.
Following are five ways to start a transactional e-mail program, as well as ideas to improve existing campaigns.
1. Build a checklist. A transactional e-mail strategy requires you to plan ahead. First, seek buy-in from senior executives that all customer communications should be the responsibility of the marketing department. Then identify all transactional e-mails the company delivers that logically could be used for promotional purposes. Conduct an inventory of your current delivery system. Do you have capabilities to handle the campaign in-house? Can your existing systems track the performance of transactional e-mail? If not, consider outsourcing your e-mail delivery. There are many providers that can help solve integration issues.
2. Keep the design simple. Adopt a standard template for sending out order confirmations, and plan to automate the personalization of promotional offers as much as possible. Your template should include a thank-you message, a copy of the receipt, shipping status with a link to the order, and copies of the company’s return policy and customer service contract. Under the transactional information, add a standard line of promotional text that includes an offer such as a discount on the next purchase, a free gift or free shipping. Provide a promotional code for the customer, if needed. For example: “Save 10 percent or get free shipping on your next purchase. Simply use the following promotion code at checkout: ThankYou 101.”
A simple variation of this offer is to encourage customers to forward the savings on to a friend. For instance: “Reward your friends. They can save 10 percent or get FREE shipping on a single purchase. Click on this link to forward this offer to a friend.” Make sure to test these e-mails with a select group of customers prior to a full roll out.
3. Include a welcome message. You miss a valuable opportunity every time you fail to send a welcome e-mail to customers who sign up for your newsletter or e-mail registry. Automate this function and take the time to add a promotion to the bottom of the welcome e-mail. It’s a simple and inexpensive way to generate interest and encourage clickthroughs.
4. Add some special sauce. Unfortunately, most companies use few, if any, images when sending transactional e-mail. Try spicing up an HTML template for order confirmations by featuring photos, promotional graphics and personalized messages. Pizza Hut responds to online orders with an e-mail “thank you” that features a color photo of happy guys eating pizza—alongside an offer of free breadsticks with a future purchase of two large, three-toppings pizzas for $16.99. An “order now” option accompanies the offer.
You also can use HTML e-mail order confirmations to promote a more personalized message based on a customer’s purchasing history. For example, a marketer sends a customer who buys a diaper bag a message promoting a new changing table or stroller. These types of e-mails can be used for cross-selling or upselling, based on the customer’s Web site buying habits.
5. Stay Can Spam compliant. The transactional messages you send are considered a permission-based e-mail follow-up, so they are excluded from the opt-out and opt-in requirements that restrict other types of e-mail. Still, messages you use during customer transactions must conform to Can Spam anti-fraud provisions. To stay compliant, avoid subject lines that could be considered promotional, and make sure the transactional content is always at the beginning of the message. All promotional offers should appear at the bottom of the e-mail.
Implementing a simple transactional e-mail strategy can help your company stand out in the inbox more effectively and reach customers who otherwise might slip away. So get the marketing team on board, come up with a plan and take full advantage of this often-ignored tool. If you do, it’s likely that your e-mail promotions will quickly rise above the inbox fray—and conversions will follow.
Ken Burke is founder and CEO of MarketLive (www.marketlive.com), an e-commerce technology and services provider based in Petaluma, Calif. He can be reached by e-mail at ken@mmlive.com.
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