How transactional e-mails drive loyalty - or not

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By: Wise Marketer Staff |

Posted on January 24, 2007

With a growing number of consumers shopping online, more marketers are expressing interest in using transactional messages in new and effective ways but few are harnessing the channel's full potential, according to a report from Silverpop.

The report, entitled 'How top retailers use transactional e-mails', reveals how some companies capitalise on using this targeted marketing channel to cross-sell and up-sell relevant products to customers, while others fail to exploit the full potential of transactional e-mail marketing.

According to Silverpop's VP of strategy, Elaine O'Gorman: "Because transactional e-mails reach customers at a time when they are most likely thinking about the company in a positive light, savvy marketers recognise the power of transactional emails to enhance customer relationships, solidify branding and cross-sell and up-sell additional products."

Key findings
Among the company's key findings concerning the use of transactional e-mails for effective marketing:

  1. Few transactional e-mails included promotional copy
    Only one in five retailers studied promoted other products within transactional emails. "Far too many companies allow their company's IT departments to send static, text-only messages," said O'Gorman. "When control over transactional messaging resides outside of the marketing function, the emails often lack cross-sell and up-sell promotional content that can boost revenue". When adding promotional content to transactional messages, she cautioned marketers to keep in mind that there are certain legal complexities to take into account. It's also wise to consult with legal counsel with respect to complete regulatory interpretations and compliance requirements.
  2. Nearly six out of ten e-mails are in HTML format
    The creativity afforded by HTML e-mails helps marketers boost returns. Lacking strong branding, 'plain text' messages generally confirmed the purchase order. According to O'Gorman, using HTML formatting that includes essential branding elements is a strong way to enhance customer loyalty and even increase revenue: not only do HTML e-mails look better but they can also include simple technology to make the e-mail opening rate measurable.
  3. Deliverability issues obstructed some retailers
    Worryingly, 6% (that's about one in fifteen) of the transactional e-mails received landed in a junk mail folder. O'Gorman suggested that, if retailers knew how many of their messages (including those critical transactional e-mails) were landing in junk mail folders, many more of them would take the time to ask recipients to white list their e-mail address.
  4. More companies focused on opt-ins than extra sales
    A larger percentage of retailers used their transactional message to promote their commercial e-mail programme than those who to cross-sell or up-sell customers. Over two-thirds (68%) of companies that offer e-mails as part of their marketing programme included a link in the transactional e-mail to opt-in. However, by taking advantage of the high open rates of transactional e-mails and establishing brand loyalty at a time when customers are very likely to be thinking about the company, top online retailers are taking this opportunity to strengthen relationships with customers and drive revenue growth.

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