How to Monetize Your Transactional Emails [The Complete Guide]

But what if you could use these transactional emails to increase customer engagement, conversion, or even monetize content?

Chapter 1. Why You Should Consider Monetizing Your Transactional Emails

Often, transactional email is “not my responsibility” or “done automatically by my CRM”.

As marketers, we can invent all kinds of excuses to look away from transactional emails.

But in reality, we’re just not yet seeing the opportunities that these emails have to offer.

So, when you’re doing a lot of email marketing, but you’ve never cared about transactional emails, it’s time to re-evaluate. 

What Are the Transactional Emails Anyway?

Even though there’s no clear definition of the term “transactional email”, we’ve all seen them.

These email messages have two types of triggers:

1) the recipient themself and

2) the connection that exists between the recipient and the sender. 

Here are some examples:

Order Updates 

Everything your customer needs to know about their order can be considered transactional. People need to know: “Did my order come through?”, “When can I expect it to be delivered?”, “Where can I pay?”, so emails in this category involve i.e. confirmations, shipments, and receipts.

Request Fulfillment 

The most time-sensitive transactional emails are the ones that are sent to fulfill a request. Password resets, two-factor authentication emails or activation codes sent by email are time-critical in a sense that people will get annoyed after even a few minutes of delay.

Alerts & Notifications 

Most used by social media companies to notify customers about mentions, and software providers to alert about changes in a customer account (password change / suspicious login attempts). Also changes to company’s legal documents and policies.

(Behavioral) Events 

Sometimes, unexpected things happen. The best thing is to be prepared. If, let’s say, a purchased item turns out to be out of stock, you’ll need to notify your customer. 

Reporting 

Nearly every B2C utility company sends usage reports periodically. Energy suppliers sending monthly emails about energy consumption, software providers emailing you about your yearly activity, et cetera. 

Referrals & Invitations 

Though this category is on the edge between transactional and marketing email, the email saying “Your friend Tom invited you to use Flowmailer” can be considered a notification email and thus transactional. 

Transactional emails are crucial to your customers and therefore have a higher impact than your email marketing efforts. To prove that point, we’ve collected some statistics on how transactional emails perform.

The Effectiveness and Advantages of Transactional Emails

Statistics about the performance of email marketing and transactional email may vary depending on the source you read, but everyone agrees with the fact that transactional emails outperform marketing emails in every aspect.

The e-Village Email Benchmark (2020) gave us these percentages:

Data source: Email Benchmark 2020

As the above graph reveals, there’s a significant difference between open rate, CTR, and CTO. Earlier studies report a way smaller difference, which indicates that marketers have found better ways to market their transactional emails. 

But the reason transactional email marketing often outperforms traditional email marketing goes beyond simple statistics. Let’s explore the biggest advantages of transactional emails.

#1. Customer is already engaged with your brand

Customers that are already engaged with your brand at the moment you send your email (i.e. right after an order) are more likely to read and click. Transactional emails are often sent at the moment someone is already thinking of your brand, compared to marketing emails often sent at seemingly random times of the day.

#2. You’re not limited to “optimal sending times”

The “science” behind sending times of marketing emails is thus not applicable to transactional emails. There’s no rule that says “the best time to send an order confirmation is at Tuesday 3:00 PM”. Therefore, sending a transactional email has the same effect regardless of whether it is sent on Tuesday at 3:00 PM or on Saturday at 9:00 AM. 

#3. Packed with data & information

Transactional emails are often sent from platforms that have a lot of information about a particular recipient. Contrary to most email marketing platforms, transactional emails are built on data outside of the platform. This allows you to personalize emails based on information from various data platforms like CRMs, ERPs, or DMPs.  

#4. Turn offline sales into online engagement

More than any other form of marketing, transactional emails are capable of turning your offline shoppers into online fans. Every purchase, loyalty program, or delivery can be followed up with an email, every email can contain ways to increase customer engagement. 

However, not every transactional email can be used for marketing purposes. How can you decide what types of emails can and cannot have promotional messages? Let’s find out. 

Chapter 2. Deciding When to Aim for Conversion

When assessing the amount of transactional emails you’re sending, you’ll probably feel that not every email is suited for marketing purposes. And you’re right. This chapter tells you when and when not to use transactional emails as a conversion cannon.

Using the Customer Journey as a Guideline

The Customer Journey can help you pinpoint the moments your recipients appreciate transactional email marketing. The further they proceed in their journey, the more likely they will convert in transactional emails. If you do it right, that is. 

Needless to say, every business has its own Customer Journey. They all consist of five phases, where awareness comes first (knowing you exist/a problem arises) and results in loyalty. 

At what point your (future) customers will accept marketing messages in transactional emails depends on both your business and the stretch of the message.

Overall, we’d advise starting with transactional email marketing from the point someone is in transit between consideration and purchase. 

For eCommerce, i.e., that would be when someone creates an account to continue shopping.

The welcome email you’re sending could contain something like “Welcome! We’ve selected some items you might like and added a little freebie to your first order.”

On the other hand, consideration in the SaaS business could mean someone started with a trial account. The marketing message there could be: Here’s a guide to help you craft beautiful transactional emails! 

From there on, people are more likely to click your marketing messages in order confirmations, notifications, and more. But there are still times when marketing messages are not acceptable.

When NOT to Aim for Conversion 

Transactional emails have two purposes: to inform and/or to fulfill a request.

Order confirmations, monthly reports, notifications, they all aim to inform their recipient about an event or status. On the other hand, emails like two-factor authentication or password reset, are only used to do precisely that: confirm 2FA or reset a password.

It doesn’t make sense to add marketing messages to emails that are sent to fulfill a request. Typically, these emails are opened, clicked, and never read again. Any promotional content would be out of place and could even land you in the trash.

Excellent Examples of Email Conversion

Most transactional emails do lend themselves for marketing purposes. Take these examples: 

Zest’s Notification Email 

Zest lets you promote your new piece of content with their community of marketers. You can request a Content Boost, after which they send you the email below. The team uses this email to promote their own Zest app:

Fabletics’ UGC Motivation

USA-based “athleisure” retailer Fabletics shows how to turn standard order confirmations into User Generated Content.

UGC makes great promotional material, and people receiving the email already have what they need to compete: sporting goods.

Indeed’s Career Guide

Indeed, the job site welcomes their new job seekers with a welcome email stuffed with tips and good reads on how to make the best of their search for a job.

Chapter 3. Start with Compelling Email Design

The minute your recipient opens your email, their likelihood of reading it until the end will depend upon not only your content but also your email design. Of course, your email design should also reflect your brand’s personality, together with your customers’ demographics and style preferences.

And how can you do all that in a design? 

Use colors, patterns, and fonts that your target customers can relate to. 

For example, Coca-Cola uses flowing scripts and bright red logos to tell customers that you’ll get the energy your body craves when you drink a Coke.

On the other hand, Regis Salons brands messaging about its nature-sourced olive oil shampoo with designs laced with green – informing its eco-conscious customers without a word about its products’ organic source. 

But how does a brand discern what email design will appeal to its recipients? The same way you do for the content you write – with data.

Creating Customer Personas 

Using data gleaned from social media, website analytics, and online behavior, you can paint a vivid picture of your recipients. Use that data to construct customer personas. 

Customer personas put a human face on your recipients. Not only are they full of detail about the characteristics of each of your target customer segments, but they also give them an easy-to-remember name.

For example, a customer persona called “Doctor Donna” could help your design team come up with a look that doctors, particularly female ones, can relate to. Medical symbols and plenty of clean white copy – with a touch of femininity – can give your email instant relatability.

Data-driven details like this are only half the story when it comes to design strategy. More subtle aspects can make your transactional emails not only more readable but more compelling as well.

The Inverted Pyramid 

One such strategy uses an inverted pyramid structure when creating blocks for both the text and images in your email. For years, journalists have successfully used this tactic to report news stories. It works equally well for emails. Proper transactional email copy consists of:

#1. Start with the focus of the email

Why did you send this email in the first place? Highlight the most critical information you want to convey with a bold headline. As a headline on a news story, use words and eye-catching fonts to get your recipients’ attention.

#2. The necessary action / information

Make your headline the widest part of your overall design, like the bottom of a pyramid. As you expand on your message, use smaller text and images, drawing your readers’ eyes downward toward the call to action.

#3. Add side info

The final part of a transactional email is the side information that might be valuable to the receiver. Think of:

• Password reset emails saying: “Didn’t ask for a new password? You can ignore this email.”
• Welcome emails saying: “Follow us on these social media accounts.”
• Order confirmations saying: “You might like these items too.”
• Monthly report emails saying: “Want to make more of your subscription? Try this!”

This is the part where you can throw in a little engagement rocket as well. It’s content that is relevant to but not necessary for the message. Read about how to increase engagement & conversions in chapter 5.

Choosing a Platform for Email Personalization and Design 

Transactional email delivery platforms vary widely in what they offer. Look for a platform that can provide you with extensive design and personalization capabilities.

With those features, you can maximize the impact of all your customer data research to create highly personalized emails that will appeal to your recipients.

First, list all the features that you need in an email delivery provider. Next, search through a list of top transactional email platforms to narrow down your search.

Contact those providers that make your shortlist. Before they get back to you, have a list of questions that can help you select the one that will best meet your company’s needs.

Chapter 4: Types of Promotional Content for Transactional Emails

If we succeeded to arouse your interest in converting transactional emails, it’s time to explore transactional email marketing opportunities. What types are there? How do you start with them? 

This chapter dissects the following types of marketing content:  

• Value-adding content  
• Upselling  
• Cross-selling  
• Reader activation  
• Feedback collection
  

Provide information that your new customer probably didn’t read yet, but could very well find useful. 

Value-Adding Content

Content is a very accessible form of marketing. Content that has value to i.e. an order, is valuable in a transactional email. Although it’s not about the purchased product, it’s definitely something recipients appreciate and engage with your emails through.  

The key to relevant content is simple: provide information that your new customer probably didn’t read yet, but could very well find useful. Here’s an example:

Just bought a pair of shoes? Read our care tips on how to keep them protected:

Though this isn’t a transactional email, this snippet from Red Wing Heritage could be used in an order confirmation email perfectly

Or something like this:

1. Going on a trip to Athens, Greece? Check out these car rental services;
2. Booked tickets to the movies? Here’s a list of our favorite restaurants nearby.

Cross-Selling

Upselling goes beyond just content. You often see a “YOU’LL LOVE THESE” section in order confirmations, trying to sell more through the transactional email. Generally, there are two ways of transactional email sales: cross-sell and upsell.

Cross-selling is the promotion of a product or service that is complementary to the earlier purchase. Think of:

• Just booked a flight? Get $5,- off on a parking spot;
• Did your car just turn five years old? You might be interested in our roadside assistance service. 

It’s different from value-adding content since it aims to sell more instead of increasing engagement with the brand. But statistics don’t lie (this time), cross-selling does increase conversion rates.

The art of cross-selling is to promote items a person hasn’t seen yet or are at least different from the items they purchased. The best way to do that is through a Recommendation Engine.

Upselling

Contrary to cross-selling, upselling is about selling an improved version of a product or service. This happens when a customer has first tried a free version of a product or service or hasn’t unlocked extra features yet. 

This example is from Whereby’s welcome email, sneaking in content about the advantages of Whereby Pro:

Reader Activation

The single most cost-effective (email) marketing strategies involve using your current customers to spread the word about your brand. That’s where reader activation through referral programs and User Generated Content kick in.

Activate your readers to promote your brand, by giving something away for free or with a discount. Or activate them to share what they bought on their social media, like the Fabletics example we showed earlier.

This referral example is from an order confirmation email by MeUndies:

Feedback Collection

Another way to engage your recipients with your emails is by asking them for feedback. How did you do? Was the email you’ve sent helpful to them? Asking feedback does not only increase engagement with your customers, it also helps you further develop your transactional email game. 

A well-known way to ask for feedback is through simple buttons that indicate if someone is happy or not with your service. We found this one in an email from Adidas:

The email that did it all (basically)

In our search for perfect examples, we found an email by Fitbit that has pretty much all the components we listed in this chapter. It’s called “Cheers to the year” and is a report on everything the user did while wearing the Fitbit. 

Chapter 5: How to Create Content That Can Be Monetized?

Creating transactional email content that converts recipients to take further action takes both research and creativity. However, transactional emails are the perfect place to place both marketing messages and third-party ads. With open rates of nearly 80 percent and high click-through rates, they’re fertile ground for taking recipients another step along their customer journey.

The topmost principle to keep in mind with email marketing is to provide value to its receivers. Depending on the transaction, you can use a wealth of messages to move your recipients to action. Here are some insights:

• Order confirmations: If the email is a receipt for an order, you could send a link to a blog post that shows readers how to get the most out of that product. Or you could send them to an article that shows owners how to best care for the product. Of course, you should invite readers to subscribe to your email newsletter at the end of those articles. Taking that step builds their familiarity with and loyalty to your brand. Product suggestions, too, can help provide value.
• Balance notifications: Banks and other financial institutions can add links to articles that teach their customers to keep their account information secure while they shop or bank online.
• Post-delivery emails: After the customer receives the product, ask for a review – or feedback. Instead of merely printing the reviews on your website, respond to each one. Spare no effort to provide a top-quality customer experience throughout.
• Reply to a request for information: In addition to the requested information, including links to other articles that could help them solve their problem or satisfy their curiosity. Or, you could invite them to join your subscriber list, become a follower on social media, or link to products that could solve their problem.

Regardless of the type of transactional email you send, make every one of them into an opportunity to develop your business relationship with the recipient. Do check, however, with local law. In some countries, such as Canada, businesses may not send product recommendations in transactional emails.

Gathering and Using Data

The more data you collect on your customers, the better you can serve their needs. For that reason, inviting them to become social media followers, sign up to your email newsletter, or respond to your request for a review provides you with more data and strengthens your relationship with them. 

Content and website analytics, combined with your customer data, can build a picture of your customers. Using this data, you can make recommendations or suggest further reading that suits their specific needs, wants, and pain points.

Writing Quality CTA’s

To have a compelling call to action, you need to draw your recipients in from the very first word. As you describe the value they’ll receive, use action-oriented language that makes taking the desired action irresistible.

Be concise. People today have short attention spans, particularly when they’re scanning through a full inbox. Use bullet points and subheadings so that readers in a hurry can still get the gist of your email.

When you get to the ‘take action’ button, use language that appeals to the receiver. For example, if your company sells marketing software, you could use ‘Boost My Business.’ If your organization publishes news stories, ‘Get Informed’ would be a great choice.

Programmatic Email Monetization

If you plan to include ads in your transactional emails and thus, create a new stream of income for your business, using the right ads for each customer segment is essential for success. Native ads (ads that appear like related stories) don’t distract the reader from your main message, but instead, offer extra information about topics that will interest your receivers.

Use the data you’ve gathered to segment your receivers by interest, demographics, and other factors. This way, they’ll receive ads that they’ll be likely to click on.

The Role of Content Partners in Email Monetization

Emails – even transactional ones – often have a more significant impact when you join forces with other companies whose products and services complement yours to create content. Content partners give your emails more authority and provide more overall value to your receivers.

Consider combining your teams’ talents and expertise with those of partner companies to create white papers, e-books, guides, templates, or other problem-solving content. Once you create these valuable pieces, use them as incentives for recipients to sign up for your respective email newsletters.

Use Programmatic Native Ads for Greater Relevance

Even though email has a higher ROI than most other types of marketing communications, your emails have to make it through all the inbox noise to connect with your customers. 

Programmatic (dynamic) native ads can add relevance to your emails, making yours the one receivers star as “important,” sending them to the top of your inbox.

When you segment your email recipients by interests, demographics, and pain points, you can show them ads in email newsletters relevant to their needs. Since AI chooses programmatic ads, they’re highly scalable, no matter how many recipients or segments you have.

The advantage of native ads is that they appear as related articles about topics that your recipients are interested in. By monetizing email newsletters with ads that don’t intrude, you’ll build confidence in your business as one that can meet their needs.

Dynamic email advertising based on your recipients’ needs helps them find advice, products, and services they need without the hassle of a Google search. That kind of convenience adds value and relevance to your emails.

On the other hand, if your recipients view your emails as relevant, they’re less likely to mark your emails as spam. The more relevant your emails are to your readers, the more likely they will subscribe to your email newsletters.

Subscribers who develop that kind of confidence often become loyal customers. While you’re waiting, though, ads in the body of your emails can help you develop a sustainable email monetization strategy. 

Chapter 6:  In order to Monetize Your Emails, Make Sure They Hit the Inbox

One of the most critical questions you need to ask prospective providers is about deliverability. If your emails end up in your receivers’ spam folders instead of their inbox – or don’t get delivered at the right time – it ruins the reputation you’ve worked so hard to build.

The Importance of Email Deliverability

If you’ve ever searched through your spam folder for a missed email from a company you’ve bought something or requested information from, you know the frustration it can bring. That’s the exact opposite effect you want your transactional emails to elicit from receivers.

Equip yourself by learning more about the importance of email deliverability so that you can ask prospective providers detailed, informed questions. Start by learning the difference between email delivery and deliverability.

The Difference Between Delivery and Deliverability

Email delivery is simply the process that takes place between clicking “send” and the time your email arrives in your receiver’s email account. Users rate the quality of delivery by the speed in which an email moves from your company to the receiver.

Deliverability, though, depends on where your email arrives – in your receiver’s inbox or their spam folder. To maximize your deliverability, you need a provider that helps you maintain a sterling reputation, minimizes the bounces on your recipient lists, and uses industry-leading authentication methods to clarify your reputation as a sender.

Yes, delivery speed is critical for success. For example, if your response to a request for information about your product arrives later than your competitors’, yours will likely end up in your recipients’ trash folders.

Similarly, if you respond late to support requests, you lose customer confidence. Usually, you end up with an angry customer barraging your support team with calls.

Ask prospective providers about their Simple Mail Transfer Protocol (SMTP) response times. SMTP is the protocol that most email delivery services use to send email communications. The providers with the lowest, most consistent SMTP times should be the ones that end up on your shortlist.

The Effect of Poor Deliverability

When choosing email delivery services, you also need to ask about their deliverability rates. Four factors impact your deliverability rate:

• Your reputation; 
• Your provider’s ability to authenticate your emails; 
• Your infrastructure; 
• Your emails’ design and content.

Without optimizing those four factors, you’re likely to experience higher complaint rates, angry customers, fewer conversions, and customer churn. Learn how to improve your email deliverability to avoid negative customer experiences.

Improving Your Email Deliverability

A crucial factor in email deliverability is your domain reputation. In short, domain reputation is your credibility towards receiving email servers. Domain reputation is based on behavior shown by your IP addresses and the known complaint rate of your domain.

Managing your domain reputation is a difficult part to manage since you’re not always in full control. The IP addresses your service provider uses can be influenced by multiple factors, i.e. a lot of freemium accounts used for SPAM. Their reputation influences yours. We’ve got two tips to help you improve your domain reputation:

Getting Started with SPF, DKIM, and DMARC

Email without proper authentication is vulnerable to spoofing, so over the years, the email field has developed standards for authentication: SPF, DKIM, and DMARC. These help you protect your domain and increase your reputation towards inbox providers.

Think of an email as a regular letter. 

The Sender Policy Framework (SPF) checks if the sender’s name mentioned on ‘the envelope’ combined with the sending server matches the settings on the Domain Name Server (DNS). If the sending IP address does not match the one(s) named in the domains’ DNS settings, SPF authentication fails and the email is rejected.

With SPF the envelope is secured, but not the letter itself. That’s where DKIM kicks in.

DomainKeys Identified Mail (DKIM) uses a digital signature as an email authentication method to verify its content. DKIM, like SPF, is not very useful on its own, but together with DMARC, they provide better email protection.

Domain-based Message Authorization, Reporting & Conformance (DMARC) tells the world you’re taking your email security seriously. This technique helps you deliver legitimate emails as well as protecting your customers from phishing.

Choosing a Specialized Platform

We told you how hard it is to manage your domain reputation, so why not let someone do it for you? There are a lot of transactional email delivery services that focus on delivering your emails to your customers’ inboxes. 

You might be wondering: why not use existing marketing software? What’s so wrong with using an all-in-one platform? They’re not built for transactional email. Where a lot of these software providers focus on giving you all the tools you need, the infrastructure is often neglected. Email reputation, for example, is something most tools take for granted.

Nuances for Transactional Email Marketing

The fact that it’s so hard to maintain a proper domain reputation also has to do with the fact that you can’t just send everything to everyone on the planet. An email address is someone’s “property” and some consider their inbox holy. There are a few ground rules when you’re sending promotional content.

Legislations for Promotional Content in Emails

First of all, bear in mind the different legislations around the world and the way nations protect customer privacy. USA’s CAN-SPAM allows more than the GDPR (European Union) does. Countries like Brazil are following the EU’s example and created their own LGPD. All these legislations are not only rules but they also resemble a recipient’s expectation.  

The Golden Rule: Don’t Be Irrelevant

Though relevance is a somewhat stretchable concept, it’s clear that your marketing message should not be randomly added to your transactional emails. Give it a thought and consider what would fit best and would be perceived as relevant to the consumer. This does not only convert better but will also keep your name off email blacklists.  

Wrap up

With this complete guide, you’re now able to create compelling transactional emails that convert. Whether you’re still exploring your opportunities or you’re already convinced, we’ve covered the whole process of transactional email marketing. Keep in mind that a transactional email is never ‘perfect’ and that you’ll need to test what you’re sending. Happy sending!