There are two flavors of marketing emails in the email marketing paradigm, direct/bulk emails and transactional emails. Direct emails are generally used by marketing personnel to acquire new customers, increase sales volumes and inform potential customers about new products. On the other hand, transactional emails are generally used by the customer relationship personnel to manage the relationship with existing customers, persuading existing customers to buy more of a product or some different product, repeat business and enhance customer loyalty.
Generally, direct emails are used to acquire new customers while transactional emails are used only for information purposes to the existing customers whenever they take any action related to product purchase. Usually, the usage of transactional emails is generally overlooked by the email marketing team when it comes to email marketing strategy. But if used properly, transactional emails have the potential to increase sales (by cross-selling and up-selling) as well as conversion rates (from potential customers to actual customers).
What are transactional emails?
Before we dive deep into why the transactional emails have higher open rates as compared to direct marketing emails, let’s first get to know what exactly are transactional emails and the purpose for which they are used. In simple terms, a transactional email is a one to one email which an existing customer receives whenever he/she interacts with the seller/merchant for purchase purposes. The transactional email contains information which helps in completing the transaction or process that the existing customer has initiated with the merchant.
As for example, whenever a new potential customer joins a merchant site, he receives a welcome email. Whenever a customer makes a payment, he receives the invoice through email. Whenever a customer makes an order, he receives a shipping notification email. Whenever a customer makes an inquiry, he receives the information through an email. All these sorts of emails that a customer receives are categorized as transactional emails.
Generally, a transactional email is sent to a specific customer and these emails contain information related to a transaction. This specific information is valued by the customer and thus the customers expect to receive such emails. This explains the high open rates, low bounce rates and low spam reporting for such transactional emails.
Reasons for a higher Open Rates for Transactional Emails
Now that we know the significance of transactional emails in the email marketing landscape, we will get down to the reasons as to why transactional emails have higher open rates as compared to direct/bulk emails. The reasons are as mentioned below.
- Better deliverability: As compared to the bulk (marketing) emails, the transactional emails have a considerably better delivery rates to the recipient inboxes. This is because the transactional emails contain minimal images, graphics and catchy words in the subject line and mail body. As such, these transactional emails are seen favorably by the email delivery servers and ISPs. Moreover, since the recipients expect such emails to be delivered to them, they view these emails favorably instead of reporting them as spam. Thus, based on the positive contents of the email, the positive behavior of the email recipients in the past and other such contributing factors, such emails get delivered to the inbox of the recipients by the ISPs.
- Engaging content: The recipients of the transactional emails expect to drive some value from the information provided by such emails. As such, the level of interest and curiosity generated by such emails result in a “captive audience” – waiting and willing to read whatever communication the email has to provide.
- Actionable content: A transactional email prompts a user to act immediately. Links such as “Change your password”, “Track your order”, “Click for more details”, “Activate your account”, “Login to your account to see more details”, etc encourage the recipient of the transactional email to take an immediate action of clicking the appropriate link. In contrast, the bulk emails focus on providing voluminous information about the products which the recipients of the mail need to assimilate. And in such bulk emails, the recipient knows that the information provided by such emails will be required at a later time, not immediately. Hence the recipient’s tendency to postpone the opening of the email for a later time.
- Easy content: Normally, the transactional emails will have minimal graphics and images and the language is more simple and easy for the recipient to assimilate. Such emails will not have complicated graphics, heavy images in their body, cheeky subject lines or complicated language and tone as is usually the case for bulk emails. Thus, these emails are easily assimilated resulting in positive response to such transactional emails from the recipients.
- Personalized content: Since transactional emails are sent to specific customers, their personalization quotient is higher as compared to the bulk emails. As such, the recipients get enthralled on receiving such personalized emails. As the recipients are expecting such emails and to top it up with personalized contents, the probability of opening such emails and to act on them increases exponentially.
- Quality content: Unlike bulk emails, transactional emails contain minimal blacklisted keywords (due to its simple language). Thus, the overall quality of the email contents are better than bulk emails due to which, the ISPs are encouraged to deliver such emails in the inbox of the recipients rather than the spam folder. With higher inbox delivery, the probability of opening such emails increases significantly.
- Spam reporting: With emails expected by the recipients, favorable user behavior for such emails and quality content in the email body, minimal transactional emails are reported as spam which again enhances the reputation of such type of emails with the ISPs. Thus, open rates are notably higher for transactional emails as compared to bulk emails. Additionally, the reputation of the delivery servers sending such quality transactional emails is enhanced automatically.
Transactional Emails at a Glance
All the above mentioned pointers result in appreciably higher delivery rates of transactional emails to the recipient inbox and favorable action taken by the recipient of such emails. The open rates and click rates are appreciably higher for such transactional emails as compared bulk emails. On the other hand, the spam reporting and delivery to the spam folder for such transactional emails are appreciably lower as compared to the bulk emails. With the smart usage of transactional emails, the merchant can appreciably increase their sales and customer retention. There is no doubt that transactional email has the potential to provide appreciable benefits to sales and marketing teams if harnessed smartly.