how top retailers use transactional email

Silverpop
From First Click to Lifetime Customer
STU D Y
HOW TOP
RETAILERS USE
TRANSACTIONAL
EMAIL:
Silverpop Study Reveals
Revenue-Boosting Tactics
Engagement Marketing Solutions
Silverpop
Engagement Marketing Solutions
STUDY
HOW TOP RETAILERS
USE TRANSACTIONAL EMAIL:
Silverpop study reveals
revenue-boosting tactics
E
mail marketing can be a double-edged sword. While it allows marketers to connect
deeply with customers through uniquely relevant offers and measure the results
instantaneously, the growing use of spam filters and crowded inboxes is making it
increasingly difficult to fully engage with even your most valued customers. However,
there is a largely untapped communications channel that enables marketers to reach
out to customers with new and relevant offers precisely when a company and its products are top-of-mind. This channel is already likely your most highly read and actedupon messaging vehicle. But if you’re like most, you aren’t taking advantage of it.
So what is this untapped channel that already has a tremendous share
of your customers’ attention? It’s the great, forgotten channel that’s likely
buried within your IT department or hanging off the end of some ancillary
system, forlorn and forgotten. It’s transactional email. And the fact is, your
transactional emails can deliver promotional messages to the right person
at the right time with tremendous results.
Transactional emails are those which companies send to customers to
confirm a purchase, notify of shipping dates, deliver warranty information,
etc. While commercial emails are increasingly ignored or considered
spam, recipients say transactional messages are the type most worth
reading.1 And six out of 10 consumers state they don’t mind receiving
marketing messages included within transactional emails.1 Yet far too
many marketers fail to exercise control over this powerful channel,
ignoring the revenue-generating potential of improved branding, cross-sell
and up-sell opportunities afforded by this communications channel.
There is, however, a growing number of marketers who want to take back
control of all customer touch points and utilize transactional emails in
a more promotional manner, and many seek the services of marketing
technology providers to help them achieve their goals. JupiterResearch
reports that 58 percent of email marketers want to outsource their
transactional emails to marketing technology providers. Of companies that
already outsource promotional email, the number jumps to 65 percent.2
Marketers seek assistance from these providers with their transactional
emails in order to receive improved deliverability, trackability, scalability
and the opportunity to include cross-promotional offers.
Additionally, JupiterResearch projects a healthy return on investment when
companies include marketing-oriented messages in transactional emails.
Properly targeted with relevant offers, Jupiter estimates that transactional
emails can generate as much as $500,000 annually in additional revenue
when cross-sell and up-sell messages are included.2
To identify how companies are currently using transactional emails and
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identify best practices, Silverpop undertook a study of the messages sent
to recipients immediately following an online purchase. Findings show how
some companies capitalize on using this targeted marketing channel to
cross-sell and up-sell relevant products to customers, while others fail to
harness the full power of transactional email marketing.
Key findings
With careful planning and by following the best practices identified in
Silverpop’s study of top online retailers’ transactional messages, marketers
will find that transactional emails can be among their best marketing tools.
Among the significant elements identified in the evaluation of the
transactional emails, Silverpop found the following:
• Most companies sent transactional emails within 10 minutes
of order placement.
About the Study
To identify how top retailers utilize transactional emails, Silverpop
purchased items from 84 of the top online retailers as identified by Internet
Retailer.3 Each transactional email was evaluated for the following:
1. Timespan between placement of order and receipt of email
2. Subject line branding
3. Personalization
4. Layout elements
5. Up-selling and cross-selling
6. Smoothing the way to the inbox
7. Administrative elements
For a list of companies analyzed in Silverpop’s “How Top Retailers Use
Transactional Email” study, see Appendix A.
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• Six percent of the transactional emails received landed in recipients’
junk folders.
• Nearly six out of 10 emails (58 percent) were sent in HTML format.
• Just one out of five emails included promotional offerings.
• Only 14 percent of transactional emails encouraged recipients to register to receive future promotional messages.
Harnessing the revenue-producing power
of transactional email
Following closely on the heels of a customer action, transactional emails
are both expected and opened with great regularity. Because these
messages reach customers at a time when they are most likely thinking
about the company in a positive light, savvy marketers are eager to utilize
transactional emails to enhance customer relationships, solidify branding
and cross-sell and up-sell additional products.
When adding promotional content to transactional messages, keep
in mind that there are certain legal complexities to take into account,
especially if you typically don’t offer an opt-out in your transactional
messages. While in most cases there is nothing prohibiting transactional
messages from containing some promotional content, there are certain
guidelines you must adhere to, especially in the United States, with
respect to the placement of the commercial content and the content
of the subject line. Silverpop recommends you consult with your legal
counsel with respect to complete regulatory interpretations and compliance requirements.
STUDY
Clearly, most retailers feel the need to confirm purchases shortly after
they are made. To do otherwise is somewhat akin to leaving a department
store customer standing at the cash register.
2. Subject line branding
For retailers, the company name seems to be a key component in the
effort to get recipients to open transactional messages. In conducting this
review of transactional emails, Silverpop found that nearly nine out of 10
(86 percent) of the transactional emails received from top online retailers
included the brand name in the subject line. Forty-six percent of companies that branded the subject line also included the order number.
Establishing a strong brand identity is an important role for marketing.
Utilizing transactional emails to enhance brand awareness by including the
company name in the subject line is an important best practice. Silverpop found in its “Email Creative That Works” study4 that emails with the
company or brand name in the subject line had open rates on average 7
percent higher than those that did not. Because online shoppers are likely
to make purchases from several different retailers, as well as get inundated
with emails from other companies competing for their business, it’s helpful
for them to be able to quickly spot your company’s receipt.
It is also worth noting that there are U.S. regulations regarding the presence of promotional content in the subject line of transactional emails
that do not contain an opt-out. You should check with your legal counsel
before including such content.
FIGURE 2: Personalization
The following elements evaluated in Silverpop’s study reveal how some
top online retailers use transactional emails to enhance customer
relationships and drive revenue. They also show the large number of top
retailers that fail to fully harness the tremendous power of this unique
communications channel.
1. Timespan
In Silverpop’s study, a majority of retailers sent transactional emails within
10 minutes of an online purchase. Many appeared within seconds. A few,
however, took considerably longer, with one transactional message not
arriving until nearly six hours after the purchase was made. (See Figure 1:
How Long It Took to Receive Transactional Messages.)
FIGURE 1: How Long It Took to Recieve Transactional Messages
3. Personalization
Transactional emails provide marketers a rich opportunity to develop strong
customer relationships. As with any type of interaction, it’s better to call a person
by name. In Silverpop’s review of transactional emails, only 56 percent of the
companies studied did so. Thirty-seven percent used both first and last names,
while the remainder used just the first name. (See Figure 2: Personalization.)
Personalization of email messages is a basic precept of any successful
commercial email campaign. JupiterResearch found that as many as
nine out of 10 promotional emails contain personalization.5 If it makes
sense to use a person’s name when trying to sell him or her a product, it
certainly is appropriate to do so when a purchase has been made.
Best practices in promotional messaging should be followed with transactional
emails as well. JupiterResearch found that marketers who employ
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personalization are 40 percent more likely to have average unique conversion
rates of more than 3 percent compared to those that do not. The analyst firm
also found that personalized content can generate conversion rates that are
three times more than those of non-personalized email.
4. Layout elements
HTML vs. Text: The creativity afforded by HTML emails helps marketers
boost returns. In a previous study of creative elements, Silverpop found
98 percent of promotional emails were HTML-based.4 However, only 58
percent of transactional emails from the top online retailers evaluated for
this study were sent in HTML format. (See Figure 3: HTML vs. Text.)
FIGURE 3: HTML vs. Text
FIGURE 4: Sidebars with Promotional Content
Lacking strong branding, text messages generally simply confirm the
purchase order. Utilizing HTML formatting that includes essential branding
elements is a powerful way to enhance customer loyalty and even increase
revenue. Not only do HTML emails look better, they are measurable.
The marketing department that carefully evaluates metrics of its promotional emails should be equally concerned about the responses generated
by transactional messages. By leveraging the sophisticated reporting
capabilities utilized for the majority of commercial emails to also measure
response to transactional messages, marketers can gain a better understanding of all the ways the company communicates with its customers.
Links to the Web site: A transactional email is often a receipt, and
customers will frequently keep such items tucked safely away rather
than delete them. Savvy retailers, therefore, include a link to the
company Web site in transactional messages, making it easy for the
customer to quickly return for more purchases. Nearly eight out of
10 retailers Silverpop evaluated for this study included a link to the
company’s Web site in transactional emails. (See Figure 6: Links to
Web Site.)
Navigation bars: Fully half of the HTML transactional emails in the study
included navigation bars. The look of these emails coordinated well with
the original Web site on which customers made purchases, thereby
further enhancing the branding experience. Most emails featured navigation bars along the top of the message, consistent with the formatting of
promotional messages that Silverpop found in its “Email Creative That
Works” study.4 (See Figure 7: Transactional Emails with Navigation Bars.)
Additionally, HTML emails afford greater layout flexibility regarding
positioning and prominence of the promotional portion of the transactional
email. In the United States, the Federal Trade Commission has indicated
that a transactional email must include all or a majority of the transactional
content at the beginning of the message body for it to retain its transactional status. In text messages, that puts any promotional offerings at the
bottom of the message and generally below the fold. However, with HTML
emails, retailers can place relevant product offerings in sidebars for better
visibility. (See Figure 4: Sidebars with Promotional Content.)
Logo: Establishing brand loyalty is the goal of every marketer, and
showcasing the company logo is a key element of branding. Yet retailers
who send transactional emails in a text format are unable to artfully and
emotionally connect the customer’s purchase to the brand.
While some retailers sent HTML messages that looked like text and didn’t
include any formatting or images, 94 percent included images and logos.
(See Figure 5: Transactional Emails With Logos.)
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FIGURE 5: Transactional Emails With Logos
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By including cross-sell and up-sell opportunities within transactional emails,
marketers are taking advantage of one of the most important attributes of this
type of messaging. Because these emails are triggered by the customer, he or
she is expecting the message and will readily open it. The email arrives promptly
following a purchase and therefore reaches customers who have a recent affinity
toward the company. The timeliness of promotional offers that transactional messages afford can generate significant additional revenue at little additional cost.
Photos can help up-sell and cross-sell: While some text emails included
promotional offers, HTML with photography more closely matches the
promotional messages consumers are used to receiving. And the presence
of photography is likely to enhance marketers’ ability to generate additional
customer sales. Silverpop found in its “Email Creative That Works” study that
B2C marketers experienced higher click-rates when they included images
in their emails. While all-text B2C messages generated a 4.7 percent click
rate on average, those that were mostly image-oriented doubled that rate,
achieving a 7.1 percent average click rate.4 Photography strengthens the
ability to up-sell or cross-sell customers.
FIGURE 6: Links to Web Site
5. Up-selling and cross-selling
in transactional emails
Nearly four out of 10 retailers (39 percent) who sent HTML emails included
photos of other products the customer might also want to consider. (See
Figure 10: Images to Cross-sell and Up-sell.)
FIGURE 8: Percentage of Transactional Emails with Promotional Content
The revenue potential of transactional emails that include cross-sell and
up-sell offers can be huge. JupiterResearch estimates companies can
add as much as $500,000 annually in revenue by including promotional
elements in transactional emails.2
Yet, of the text and HTML transactional messages that Silverpop
reviewed during the course of this study, only one out of five offered
additional products or services in the email. (See Figure 8: Percentage of
Transactional Emails with Promotional Content, and Figure 9: Examples
of Promotional Content in Transactional Emails.)
6. Smoothing the way to the inbox
White list requests: Including a request to be added to recipients’
personal white lists or email address books is a practice that is rapidly
becoming important in promotional messages, and should be included in
transactional messages as well. Doing so can significantly aid message
deliverability and renderability in many popular email clients. Research has
found that more than half (56 percent) of email users say they always add
legitimate, trusted companies to their address books.6
While requests such as, “Please add ‘mycompany.com’ to your personal
address book” can dramatically improve deliverability and renderability,
only 2 percent of the transactional emails reviewed by Silverpop made
such a request.
FIGURE 7: Transactional Emails with Navigation Bars
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Perhaps more retailers would take the time to ask recipients to white list
their addresses if they realized how many of their messages—including
critical transactional emails—were landing in recipients’ junk folders.
While the percentage was small in Silverpop’s study (just 6 percent), the
impact is large for the companies who failed to make a sound impression on customers by having their communication regarding a purchase
bunched in with discounts on Viagra and pleas from Nigeria to help
conceal small fortunes.
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FIGURE 9: Examples of Promotional Content in Transactional Emails
Companies should carefully monitor the deliverability of their transactional messages, since mishandling can drive up call-center costs.
Deliverability monitoring is offered by companies such as Pivotal Veracity
and Return Path, or is integrated into the offerings of many marketing
technology provider applications.
Requests for opt-ins: A larger percentage of retailers used the
transactional message to promote their commercial email programs
than to cross-sell or up-sell customers. Sixty-eight percent of companies
that offer emails as part of their marketing programs included a link in
the transactional email to opt in to receive promotional messages. (See
Figure 11: Opt-in Requests.)
Since customers that buy from you are your most highly engaged audience, an opt-in opportunity in a transactional message should be your
single best source for highly qualified additions to your list. But don’t
just ask them to drop their name into your database. Spend the time to
clearly delineate the value proposition of your email program. You may
also want to link to a sample message and to your privacy policy.
7. Administrative elements
Order summary: While not all companies went to the lengths some did
by including a photo of the item purchased, a vast majority (92 percent)
included a summary of the order placed. Allowing the customer to review
the order can avert sending the wrong item and help cut down on calls
to customer service.
Inclusion of phone number or email address for customer questions:
When customers offer up credit card numbers in exchange for a product or
service, you can expect they’ll want at least some level of comfort that their
questions and concerns can be answered. It’s especially important if they
notice a mistake in the order after reviewing the transactional message.
Still, one-fourth of companies evaluated in the study failed to give
customers a phone number or email address to use for questions or
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FIGURE 10: Images to Cross-sell and Up-sell
concerns. (See Figure 12: Inclusion of Phone Number or Email Address,
and Figure 13: Example of Message with Both.)
Thanks, but please don’t respond: While all but one transactional
email Silverpop received included a “thank you for ordering” message
in the body copy, many also included a warning not to respond. Given
that the recipients are customers who have very recently made a
purchase, replies from them should be handled. Either replies from
customers should be sorted and read, or companies should consider
reply-handling software. Many marketing technology provider
applications incorporate reply-handling software in the solution.
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FIGURE 11: Opt in Requests
STUDY
FIGURE 12: Inclusion of Phone Number or Email Address
Conclusions
Transactional emails can be a powerful tool for marketers. By taking
advantage of the high open rates of transactional emails and establishing brand loyalty at the time customers are most likely thinking about the
company, top online retailers strengthen relationships with customers
and drive revenue growth. In reviewing how top online retailers utilize this
powerful communications channel, Silverpop found the following best
practices:
Silverpop Engage Transact converts
transactional emails into powerful
marketing communications
• Send transactional messages within seconds of the purchase.
Silverpop Engage Transact turns static, transactional email into a
powerful tool for marketers. By bringing this important messaging
channel out of the IT department and into your marketing organization, you are able to exert more control over corporate branding and
content while ensuring a higher level of customer satisfaction.
• Include the company name in the subject line.
Silverpop Engage Transact enables marketers to:
• Send HTML messages to enhance branding and showcase other items
• Easily generate rich HTML messages for receipts, notifications
and alerts
the customer might consider.
• Ensure that each message includes appropriate branding elements
• Personalize messages.
• Include important and relevant cross- and up-sell messaging
• Photos help sell products and can work well in transactional emails.
• Track opens, clicks and other recipient actions
• Include a link to your Web site.
• Increase deliverability rates
• Use transactional messages to cross-sell and up-sell products and
services.
• Ensure CAN-SPAM compliance
Seamless integration of customer data
Silverpop Engage Transact allows for easy, seamless integration
with existing IT systems using our XML API set. Messages can be
sent immediately or batched for bulk processing at a scheduled
time. Whether you’re sending a few messages at a time or millions,
Silverpop can handle the load of high-volume sends. Messages are
created in real time and personalized based on your company’s
unique business rules.
Silverpop helps ensure messages reach your customers’ inboxes and
provides detailed tracking reports to monitor opens and clicks.
continued on page 8
FIGURE 13: Example of Message with Both Phone Number and Email Address
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FOOTNOTES:
Buy.com Inc.
1 . “E-Mail Marketing: How to Improve
ROI,” eMarketer, May 2005
Cabela’s Inc.
2. “Optimizing Transactional E-mail
Messages,” JupiterResearch, May
2005
CDW Corp.
3. “Top 500 Guide,” Internet Retailer,
2006
CaféPress.com
Circuit City Stores Inc.
Coldwater Creek Inc.
CompUSA Inc.
4. “Email Creative That Works,” Silverpop, October 2006
Costco Wholesale Corp.
5. “Effective E-mail Marketing,” JupiterResearch, Volume 3, 2004
Crutchfield Corp.
6. “E-Mail Marketing: How to Improve
ROI,” e-Marketer, Bigfoot Interactive,
NOP World, Roper ASW, 2005
Crate & Barrel
CVS Corp.
dELiA*s Inc.
Dell Inc.
Disney Direct Marketing
FIGURES:
1. How Long It Took to Receive
Transactional Messages
Drs. Foster & Smith Inc.
Drugstore.com Inc.
2. Personalization
eBags.com
3. HTML vs. Text
eCOST.com Inc.
4. Side Bars with Promotional Content
Eddie Bauer
5. Transactional Email with Logos
Etronics Inc.
6. Links to Web Site
Federated Department Stores Inc.
(Macy’s)
7. Transactional Emails with
Navigation Bars
8. Percentage of Transactional Emails
with Promotional Content
Follett Higher Education Group (Emory
University Bookstore)
Foot Locker Inc.
9. Examples of Transactional Emails
with Promotional Content
Gap Inc.
10. Images to Cross-sell and Up-sell
Harry and David Holdings Inc.
11. Opt-in Requests
HP Home and Home Office Store
(Hewlett-Packard Co.)
12. Inclusion of Phone Number or
Email Address
Gateway Inc.
STUDY
continued from page 7
Two Ways to Generate Transactional Messages
Only Silverpop Engage Transact allows marketers to take into
consideration the various business requirements of the company’s
transactional emails and select the method best suited to generate
messages. Both methods are equally simple yet effective.
Use templates with dynamic content fields. Creating a template
within the Transact system requires the marketer only to deliver the personalized elements for each dynamic field within the message. Simply
submit a recipient data file and the content for each personalized field
within the template, and your message is assembled and delivered.
> This type of message construction is best suited for receipts and
other materials with consistent layouts and structures.
Send Silverpop the entire, preassembled message body. Marketers
with complex business rules or existing in-house systems may choose
to deliver the entire, preassembled HTML body for each message. This
type of message construction offers the marketer complete flexibility.
Using this approach, marketers can use internal rules engines to assemble each message with as much personalization as necessary.
> Preassembled message body transactional emails would be most
appropriate for itineraries or other materials that require completely
personalized content for each message sent.
Leverage relevancy and deliverability to boost ROI
Marketers who want to gain control over opportunities to reach out to
customers with the right product at the right time will want to learn
more about Silverpop Engage Transact. Don’t delay in reaping the
benefits of maximizing transactional emails with improved deliverability,
enhanced branding and the inclusion of relevant marketing messages.
IAC/InterActiveCorp. (HSN)
13. Examples of Messages with Both
Phone Number and Email Address
IBuyDigital.com Inc.
Omaha Steaks
Spiegel Brands Inc.
APPENDIX A:
J. Crew Group Inc.
Overstock.com Inc.
Staples Inc.
J.C. Penney Co. Inc.
Palm Inc.
Systemax Inc
Companies included in the study
J.C. Whitney & Co.
PC Connection Inc.
Target Corp.
1-800-Flowers.com Inc.
L.L. Bean Inc.
PC Mall Inc.
The Home Depot Inc.
Abercrombie & Fitch Co.
Lillian Vernon Corp.
Quixtar Inc.
The Neiman Marcus Group Inc.
Amazon.com Inc.
Limited Brands Inc. (Victoria’s Secret)
QVC Inc.
The Sharper Image
Apple Computer Inc.
Lowe’s Cos. Inc.
Recreational Equipment Inc. (REI)
The Sportsman’s Guide Inc.
Art.com Inc.
Musician’s Friend Inc. (Guitar Center Inc.)
Redcats USA (Chadwick’s)
The Talbots Inc.
Avon Products Inc.
Netflix Inc.
Saks Fifth Avenue
Toys “R” Us Inc.
BarnesandNoble.com Inc.
Newegg.com
Scholastic Corp.
VistaPrint
Bass Pro Outdoor Online LLC
Nordstrom Inc.
Sears Holdings Corp.
Walgreen Co.
Best Buy Co.
Northern Tool + Equipment Catalog Co.
ShopNBC.com
Wal-Mart Stores Inc.
Blair Corp.
Office Depot Inc.
SmartBargains.com
Williams-Sonoma Inc.
Blue Nile Inc.
OfficeMax Inc.
SonyStyle.com
Zappos.com Inc.
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