5 reasons transactional emails are unsung heroes of the customer experience

Our new report, Email and the customer experience, includes a survey of more than 2,000 consumers from five countries. 74% of those consumers told us they prefer email for transactional messages.

This is transactional email

The late writer David Foster Wallace gave a famous commencement address known as “This is Water.” In it, he tells a parable about two young fish swimming through the ocean. They pass an older fish who greets them.

“Morning, boys. How’s the water?” he asks. The two young fish just swim along for a little while until one finally turns to the other and says, “What the hell is water?”

Now, that metaphor might be too deep to use for something like email, and Wallace would probably hate us for making this comparison. But the point is, sometimes we don’t notice or appreciate the things that surround us every day. Transactional email is like that.

Even though consumers know the inbox is an ideal place to receive transactional messages, they don’t exactly have a huge appreciation for those kinds of emails.

When our survey asked people what they value most about email content from brands, only 23.3% selected Transactional information. Consumers were more likely to say they get value from exclusive deals, contests, and personalized recommendations. As they say, consumers gonna consume.

62.8% of our survey takers told us they value deals more than transactional information. We think this is a case of you don’t know what you’ve got ‘til it’s gone. Ask yourself this – what would put a greater strain on your customer support resources, removing deals? Or removing transactional messaging like shipping confirmations and package tracking?

When it comes to a rock-solid customer experience, you can’t make it happen without transactional emails. In fact, they just might be the most valuable thing hitting consumers’ inboxes. We need them almost like we need water.

5 reasons to sing the praises of transactional emails

There are some big differences between promotional and transactional emails. For one thing, you’d never batch-and-blast a transactional email. They’re sent to individual people, at a certain time, and for a specific purpose.

Under privacy laws like GDPR, you also don’t need explicit consent to send transactional emails as long as the recipient shows “legitimate interest” in getting the message. People expect to receive these emails because they did something to trigger it, such as requesting a password reset, making a reservation, or placing an order.

That brings us to the first reason why transactional emails are an irreplaceable part of the customer experience:

1. Transactional emails are anticipated, personal, and relevant

Back in the late ‘90s, Seth Godin got himself kicked out of the Direct Marketing Association for suggesting there was a new way for brands to communicate with consumers. He wrote about it in the book Permission Marketing, which states that the best approach is to let people opt-in and then send messages that are anticipated, personal, and relevant.

Transactional emails check all three of those boxes:

• They are anticipated because people expect to receive them (almost immediately, in fact).

• They are personal because they are meant for an individual and contain details that are unique to the recipient.

• They are relevant because the information inside of a transactional email is often time-sensitive and connected to something the recipient is trying to achieve.

This is why transactional emails get better engagement rates than most marketing emails. It’s also highly unlikely that someone would get upset about a transactional message and mark it as spam.

Transactional emails don’t have to be cold and unfeeling either. They are another opportunity to show people your brand is human. Here’s an example of a B2C email that lightens the customer experience around password recovery by making it feel friendly and more personal.

By the way, after Seth Godin laid the groundwork for ethical email marketing, folks at the Direct Marketing Association changed their minds about kicking him out. They put him in their hall of fame in 2013.

2. Transactional messages take care of business

Promotional emails may drive sales and revenue, but transactional messages are the ones greasing the gears of your business, keeping things working together, flowing, and making everything more efficient.

Transactional emails are a win-win for businesses and consumers because both sides benefit from them. Let’s take a closer look with some of the most common transactional emails:

• Password reset emails ensure SaaS users or customers with accounts on your website can continue logging in. It serves them by making it easy to log in and control account security, and ensures people keep using your platform.

• Order confirmation emails serve as digital receipts that verify a transaction has taken place. These are contracts between the buyer and the brand. They help build trust with customers and create a record of the transaction that keeps both parties accountable.

• Shipping update emails keep people from calling customer service to ask when an order is arriving. They provide peace of mind while reducing questions and complaints.

• Double opt-in emails confirm an individual’s intent to subscribe to your marketing emails. This keeps your contact list clean and keeps people from getting emails they don’t want.

• Important reminder emails keep people on track, so they show up on time for things like doctors' appointments and flight reservations.

Keep in mind, transactional emails don’t have to be boring just because they are fulfilling a specific function. While many of them are nothing but plain text, you can enhance the customer experience with branded transactional messages. Here’s an example from a health and wellness company:

Transactional emails don’t scream for your attention, but they serve important purposes that get taken for granted. Since most transactional messages are triggered and automated, it’s easy to forget that they're working hard for your organization in the background.

3. Transactional messages keep the holidays happy

A big benefit of email is the way it helps consumers stay organized. Unlike other messaging channels, you can use tabs and folders in your email inbox to sort and file brand communications. The holidays are a time when keeping track of transactions is extra important.

During the busy holiday shopping season, ecommerce goes into high gear and transactional emails are flying into inboxes everywhere. With all those gift purchases, travel plans, events to attend, returns and exchanges, transactional emails are an absolute necessity.

When we asked people to rate the importance of transactional messages over the holiday shopping season, more than 80% called those messages either somewhat or very important.

4. Transactional messages keep your users safe and informed

There is important information, and then there is IMPORTANT information. Sometimes a transactional email can alert your customers to danger. These messages are common in the financial services sector, where money is on the line.

Fraud alerts from a financial institution, for example, let consumers know when a transaction has taken place that they potentially did not make. These emails can stop a sticky situation from getting worse.

Software as a Service (SaaS) brands also use this kind of email notification for security purposes. When something unexpected happens with a user’s account, a message is sent to notify them of potentially suspicious activity.

Here’s an example of an account access notification email from Coinbase, a cryptocurrency company that takes security seriously:

It’s easy to understand why this type of message could save the day – just like a real-life hero.

5. Transactional messages are important enough to search through spam and find

Here’s another sure sign that transactional emails matter: People will sift through their junk emails when transactional messages go missing.

Our exclusive report, Email and the customer experience, found that 71% of consumers would look for a missing transactional email in their spam folder, and another 16% would do so if the missing message was important.

Whatever you do, do not assume this survey result means there’s no need to worry about transactional email deliverability. Quite the opposite. Our study also found many consumers react negatively when emails regularly land in spam. They get annoyed, lose trust, and unsubscribe.

Transactional email deliverability in 2024

Because transactional messages are so vital to brand communications and a seamless customer experience, you need to do everything you can to make sure these emails reach the inbox.

In 2024, deliverability is getting interesting to say the least. That’s because Gmail and Yahoo announced new sender guidelines, which they started enforcing in February and will be out in full force by June. The new requirements include a one-click unsubscribe in the email header, a specific threshold for user-reported spam complaints, and stronger email authentication.

We already know that it’s unlikely recipients would mark a legitimate transactional email as spam. Representatives from Google and Yahoo have said transactional emails don’t need one-click unsubscribe. But you should send clear signals about what is transactional and what is commercial email.

Perhaps the most effective way to do that is separating transactional and promotional emails so they are sent from different subdomains or IP addresses. When commercial email traffic comes from one domain while transactional messages come from another, there’s no question about what’s what.

Separate subdomains also mean separate domain reputations, which protects transactional emails from being filtered into spam. But you also don’t want your transactional emails to contain a bunch of promotional messaging. That just might prompt customers to mark those emails as spam too.

Focus on email authentication for transactional emails

The new requirement from Gmail and Yahoo that will impact transactional email involves implementation of authentication protocols. Mailbox providers use these protocols to verify the identity of the sender and stop bad actors from reaching the inbox. This helps prevent spam as well as phishing attacks like email spoofing.

Starting this year, every sender is required to have authentication in place if they expect to reach the inboxes of Gmail and Yahoo users. If you are a bulk sender, you need to be using all three methods which are:

• Sender Policy Framework (SPF)

• Domain Keys Identified Mail (DKIM)

• Domain-based Message Authentication, Reporting and Conformance (DMARC)

If you’re a Mailgun Send user, you’ll already be using both SPF and DKIM (we require it). DMARC, however, is the most effective method for stopping spoofing, and it’s really what Gmail and Yahoo want more senders to begin adopting.

Authenticating transactional emails is extremely important. Phishing scams often try to mimic those types of messages to get consumers to visit fake landing pages. That’s where your customers may be prompted to enter sensitive personal information that could lead to identity theft.

Get more help with new sender requirements

If you have questions about meeting the new bulk sender guidelines from Gmail and Yahoo, Sinch Mailgun has answers. Check out our comprehensive resource page. There you’ll find:

• Links to a podcast and webinar with representatives from Google and Yahoo.

• A guide to email authentication in 2024.

• An email sender checklist based on the new requirements.

• A collection of helpful articles from the Sinch Mailgun blog.

Ready to get serious about email deliverability? We built Mailgun Optimize as a complete deliverability suite to help you improve inbox placement. That includes an integration with Google Postmaster Tools so you can monitor your reputation with Gmail. Plus, use Inbox Placement Testing to be sure your email authentication protocols are working as expected (and find out where your B2C emails are likely to land).

Supporting the customer experience through the inbox

An ideal customer experience is built on strong communication. Some of the most important things you’ll ever need to communicate with your customers are in transactional emails. But there are many other ways to deliver a stellar experience to the inbox.

Explore additional survey results and get actionable advice for your email program when you download the full report, Email and the customer experience. You’ll find out more about how consumers use email in their everyday lives as well as what prompts them to opt-in, open emails, and engage with what you send.