Column: Tap Potential of Transactional E-Mails

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In today's environment of rising revenue goals it's hard to imagine the majority of direct marketers overlooking an obvious source of incremental revenue. Given the budget pressure under which most companies operate, it's unbelievable that most direct marketers miss a potential sales resource that is already in place -- a revenue opportunity that is virtually free. Yet that is indeed the case. The highest potential e-mails sent by most companies, literally billions of them, are wasted each year.

Transactional e-mails (purchase confirmations, shipping notifications, monthly statements, service notices, etc.) offer the perfect chance to provide service and sell products at the same time. Recipients are customers by definition and have often just made a purchase -- the best predictor of readiness to purchase again in most industries. They anticipate, open and read transactional e-mail more than any other form of e-mail, sometimes revisiting the same e-mail multiple times. When was the last time your company sent a weekly promotional e-mail with an 80 percent open rate?

As an added benefit, transactional e-mails are rarely, if ever, perceived as spam. They generate the lowest complaint rates and are most likely to generate a coveted 'add-to-address-book' action. Recipients are slow to delete them and don't unsubscribe -- and they can't.

Yet virtually all of these opportunities go unrealized. The vast majority of transactional e-mails, even from the world's best direct marketing companies, are sent in plain text, with little or no branding, no tracking, no add-to-address-book request, and no cross-sell or up-sell offers. If they do contain some kind of offer, it's completely generic and static rather than dynamic and linked to the specific products purchased, size ordered, items viewed but not purchased, or account levels and activity.

Two potential barriers have kept marketers from tapping the potential of their transactional messages. The first may be legal, because of the initial confusion around the CAN-SPAM Act and fear of turning transactional messages "commercial," and therefore subject to CAN-SPAM prohibitions and inclusions, including the ability to opt-out.

The second and more challenging barrier for most marketers is technical. Many transactional e-mails are generated by legacy CRM/ERP systems that are difficult to modify and marketers have no control over them.

Opportunity Realized

Today neither law nor technology stands in the way of developing a high performance transactional e-mail program that is appreciated by customers and generates direct marketing revenue. The Federal Trade Commission has clarified that an e-mail can indeed remain "transactional" under CAN-SPAM but still include promotional content as long as the primary purpose remains transactional. More specifically, the subject line must not promote a product or a service and "substantial" transactional content. But not necessarily the entire transaction must appear at the beginning of the body of the message.

Additionally, most e-mail service providers offer APIs for relatively simple real-time data transfer that can drive HTML transaction e-mails, complete with personalized offers. A few make it even easier by turning the e-mail itself into the data transfer mechanism. You can simply direct your outbound transactional e-mail to a conversion server that transforms plain text into HTML, inserts customer-specific content and offers and sends out an e-mail to be proud of.

If you think you can wait to worry about your transactional e-mail, think again. If certified e-mail (postage for guaranteed delivery) becomes a reality at major domains, transactional e-mails are the most likely to be sent with a "first class" stamp, and then you will have even greater incentive to make them sell. Besides, what kind of statement are you making to customers by sending beautifully crafted, dynamically generated HTML messages to drive sales, but boring and unbranded ASCII text e-mail once they actually purchase?

The law is clear and the technology is here. Take charge of your company's transactional e-mails and take advantage of the compelling sales opportunity they represent. If you don't, your competition certainly will.
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