Transactional Email: Building Trust, Retention, and Revenue

In 2014, an intermediate software developer at a large advertising agency had a unique opportunity: pitching a multimillion-dollar client. This task was unprecedented. The employee wasn’t in a sales role. He’d never pitched a client on this scale. He didn’t attend the flashy meetings or wine-and-dine the big wigs. But this time was different. The developer was a huge fan of the client’s product and knew the ins and outs of WordPress — the technology the agency would use to support the client.

As the big meeting approached, the developer was nervous — that’s an understatement. His boss gave him valuable advice: be honest, don’t sugarcoat anything, and engage with the client and discuss potential issues openly.

So that’s what he did.

Trust makes sales

In the end, the developer’s agency won that client’s business. Why? Because he didn’t lie. He didn’t try to cover up any weaknesses. He built trust — and trust makes sales.

Through honesty, a developer with no sales experience secured a client who, frankly, didn’t like WordPress. That’s a huge win.

What does this story have to do with SendWP? The connection lies in the concept of trust. Transactional emails — the messages you probably never think about — are how you build trust with consumers.

What are transactional emails?

We all know what marketing emails are — those bulk messages you send to millions of subscribers to, let’s say, advertise your upcoming Black Friday sale. Transactional emails are different. These emails happen after a transaction, such as receipts, password resets, and shipping notifications. When a user does an action on your website, a transactional message follows.

What is the other major distinction between marketing and transactional email? Open rates. The industry standard open rate for marketing messages is about 25%. Sad, but true. However, that rate soars to a minimum of 80% for transactional email.

This percentage means transactional emails present an incredible opportunity to connect with consumers.

Customer retention

According to research by Bain & Company, the consulting firm that pioneered Net Promoter Scores, for every 5% increase in customer retention, companies can expect to see at least 25% growth in annual revenue. That’s just the minimum: some companies see as much as 95% more revenue.

This is great news, as transactional emails improve retention by building trust if you use them wisely.

How to build trust and retention through transactional emails

You have two astonishing facts to reflect on. At least 80% of customers open your transactional emails. And if those emails lead to just 5% growth in customer retention, you can reasonably expect a minimum of 25% revenue growth.

But first, you must improve your transactional messages to take advantage of these statistics. Sending any old plain-text message won’t cut it. There are three critical areas to focus on: reliability, brand, and adding value.

Transactional emails must be reliable

First and foremost, your transactional emails must be reliable.

Let’s say you need to log in to a particular website, but you forgot your password. You do what we’ve all done many times before and click the “reset password” link. And then, crickets. There is no email or chance to reset the password. Or how about this: you buy a product from your favorite eCommerce shop, and then — no receipt. What’s going on? They’ve taken money from your account, but did they process the order?

Frustration leads to lost revenue. You must have an email provider that reliably delivers your transactional emails.

It’s a fact that hosting providers struggle with sending emails. The email business is complex. It takes time and resources to battle spammers and configure email settings. The hosting game has its own priorities. Email isn’t one of them.

If you’re using your host’s native email services, some of your emails will land in the spam folder or disappear without a trace. Every missing email will break trust and increase frustration.

Do you want to increase retention and revenue? Find a reliable transactional email provider.

Transactional emails must be on-brand

You’ve spent time building a recognizable brand. Why miss an opportunity to communicate that through every channel? Branding in transactional emails is something very few companies attempt, but those that do see an increase in trust, engagement, and retention.

Password reset notifications, eCommerce receipts, shipping alerts — no matter how ordinary an email may seem, it should be on-brand. Branding builds trust.

But what does “on-brand” actually mean? It’s more than slapping your logo onto a message. The essence of your brand is how customers perceive you.

Take Amazon, for example. When we think of Amazon, we envision a brand that has virtually everything and gets those products to your doorstep in one or two days. That’s the Amazon brand — not just their smiley face logo.

Transactional emails must communicate who you are and reflect how your customers see you. Logos, fonts, and colors are elements of this, but so are your tone of voice, verbiage, images, illustrations, and offerings.

Transactional emails must add value

Transactional emails all have an innate value. For example, being able to reset a password is valuable. But you can add additional value by offering clarity, convenience, and other benefits.

Images are one way to do this. Most modern consumers shop a lot. They may place several online orders on the same day. An email with a photo of the purchase immediately reminds them of their transaction.

Links to referral programs and return portals are other value-adds — and ones that all eCommerce shops should include. Sending post-delivery emails with opportunities to review the product is fantastic, as well.

Lastly, include your contact details. Customers will seek support at some point, so convenient access to your phone number, email, or other support channels reduces frustration. At SendWP, we found that access to support increased customer sentiment — AKA satisfaction — by 10%. This means they’re 10% happier (or 10% less angry) when they reach out for help. That’s a direct way to increase retention.

Now, the nature and definition of transactional emails is not to promote your brand. You can’t send a huge Black Friday advertisement with a small return confirmation at the bottom of the email body. That’s a misuse of transactional messaging and could be illegal, depending on your country’s regulations. But you can still find ways to add value while meeting the requirements of transactional emails. Never miss a chance to boost trust and retention.

Start with one

When it comes to reliability, branding, and adding value, there is a lot of information to take in. If you’re a small business owner, you already have so much on your plate. You may feel overwhelmed, especially with transactional emails.

Here’s the best advice we can offer: start with one.

Choose just one type of transactional email and implement the changes outlined above. If you’re an eCommerce brand, start with your order confirmations. If you’re in the SaaS space, try your password resets. Think about the most important email for your industry — the one that alleviates frustration — and make some changes.

Then, track it. Monitoring analytics is something everyone does for marketing emails, but they’re just as crucial for transactional messages. Most email services provide these metrics. Track how your optimized emails perform. Use A/B testing and iterate on the successful messages.

Begin with one task and gradually add more as you are able, which can help alleviate stress. You can do one per week, month, or quarter. Whatever is feasible for your business. The point is to get started. As you implement these strategies, you’ll see a difference in retention, because you’re slowly building trust.

Stop leaving money on the table

When you ignore your transactional emails, you’re leaving money on the table. If your marketing messages had an 80% open rate, you’d undoubtedly dedicate lots of time, energy, and other resources to crafting the best messages possible. Transactional emails shouldn’t be any different.

That open rate is a given, and your customers have already interacted with you. Leverage these truths to build trust and increase retention. It’s a proven fact that doing so boosts revenue.

Step one is finding a reliable transactional email service like SendWP. Get started today, then work toward branding and adding value to every message. The results speak for themselves.

Learn more

This article is a summation of a WordCamp Atlanta talk given by Matt Pritchett, the managing partner at SendWP. Watch the full video here, and reach out to @mrpritchett on LinkedIn or Twitter.