Blog Entry

Email marketing deep-dive: What is a transactional email?

This question is more challenging than you think. And how a company answers it has a major impact on the size of the audience it’s able to reach with that message.

That’s because transactional messages can be sent to all customers for whom you have email addresses. This includes those who haven’t opted in to receive your promotional messages, as well as those who have unsubscribed from receiving your promotional emails. Under the United States’ anti-spam law, the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act, these emails also don’t need to include an unsubscribe link.

But be sure to properly identify your emails as transactional because CAN-SPAM, the Canadian Anti-Spam Legislation (CASL), the General Data Protection Regulation (GDPR), and the California Consumer Privacy Act (CCPA) can impose hefty fines if a company falsely sends promotional emails as transactional.

Let’s start with a closer look at what these laws say.

How laws define transactional emails

While their definitions vary slightly, generally speaking, CAN-SPAM, CASL, and GDPR define transactional messages as necessary:

  • To complete a transaction or facilitate an ongoing subscription or membership.
  • For the performance of a contract or compliance with a legal obligation.
  • As part of an employment relationship.
  • To alert recipients to safety and security issues related to their purchase or account.
  • For “relationship messaging” or for the communication of “legitimate interests.”

That umbrella covers a wide range of messaging that’s necessary for your email marketing and cross-channel strategies, including purchase receipts, shipping and delivery notifications, and much more.

However, many companies mistakenly believe that umbrella covers other types of messages that don’t actually qualify. Much of the confusion stems from the “relationship messaging” referred to in CAN-SPAM and the “legitimate interests” clause in GDPR. Another thing that can make the lines even fuzzier: mixed messages.

‘Mixed messages’

Businesses know a 100% promotional email when they see one, but what if you add a little promotional content to a transactional email? Is it still considered transactional?

Here, the laws offer fairly clear guidance, says Heather Goff, Strategic Director of Email Deliverability Services at Oracle Marketing Consulting.

“CAN-SPAM allows for ‘mixed messages’,” she says, “and marketers have generated great results by adding cross-sell messaging to their transactional messages. With open rates on transactional messages being exceptionally high—25-35% or higher on average based on our experience with clients—the opportunities to upsell or cross-sell are much higher and more profitable.”

Brian Sullivan, Strategy Director of Email Deliverability Services at Oracle Marketing Consulting, adds that while promotional content can be included in a transactional message, the primary purpose of the message must be transactional. To avoid overdoing it on the promotional content, he recommends:

  1. Focusing the subject line 100% on the transactional content.
  2. Always positioning promotional content after the transactional content.
  3. Limiting promotional content to no more than 20% of the total email content.

While the U.S. allows mixed messages, Canada does not, says Goff. “CASL has a zero tolerance for any content that has a purpose of garnering more commerce or profit within transactional messages. Senders can only include details about the specific transaction. And if they chose to include a navigation bar, for example, the message might be considered commercial and have to be sent as promotional.” Plus, CASL requires senders to have a promotional email unsubscribe link in transactional messages.

How email marketing experts define transactional emails

With CAN-SPAM allowing mixed messages and the term “relationship messages” being part of the legal definitions, it’s no wonder some companies struggle to properly identify their transactional messages.

To hopefully bring some clarity to things, here’s how our consultants talk about transactional emails with our clients:

“If you’re wondering if a message is transactional,” says Daniel Deneweth, Head of Email Deliverability Services at Oracle Marketing Consulting, “ask yourself this: Would a person call to complain or separately request the information if they didn’t receive the email message?”

That’s the very definition of critical and essential messaging, which is the spirit of what a transactional email is supposed to be.

Goff suggests to her clients marketing inside the U.S. to ask themselves if a “recipient reasonably interpreting” the email would think it was transactional. That’s how CAN-SPAM talks about mixed messages. “In the U.S., brands must strike a balance with transactional messages between tapping the sales potential of these emails and the risk of legal action,” she says. “If a reasonable recipient doesn’t feel a message is transactional, it most likely isn’t.”

Don’t let that definition give you false comfort because consumer expectations for email marketing have shifted dramatically over time. After all, over the past two decades, consumers have expanded the definition of spam to include email they no longer want from brands for which they opted in to receive promotional messages.

Which messages are most often misclassified as transactional

While companies correctly classify most of their messages as either promotional or transactional, some messages routinely mix them up. Here are some promotional messages that our consultants have found routinely misclassified as transactional:

Abandonment triggers. These messages are triggered when a person abandons a web session, shopping cart, or checkout process.

Welcome messages. When someone signs up to receive promotional campaigns from a brand, the welcome message that follows is by its very nature promotional—or at least it should be. These welcomes should be asking subscribers to do something that’s high-value, not simply confirming that they signed up successfully.

Product review requests. While this clearly is about a transaction, there’s little to no benefit to the customer, and it’s not required to complete a transaction. These emails are promotional.

Short-supply, re-order, and replenishment campaigns. While these are triggered based on a past purchase and how much time it takes for the consumable product to be used up, the purpose of these campaigns is to generate additional sales, not to service the previous sale.

“Often, the reason to send those emails as transactional is to avoid including an unsubscribe link in order to reduce list attrition,” says Sullivan. “This can have the opposite effect, aggravating users who want to opt out of promotional messages, forcing them to use the complaint button in the absence of an unsubscribe link. And if there’s any chance a message could be legally ruled as promotional when it was sent as transactional, the fines can be significant.”

A list of common transactional emails

While some transactional emails are broadcast, many are triggered. Transactional emails are well represented in our Automated Campaign Ideas to Explore checklist. In fact, 50 of the more than 110 automated campaigns identified in the checklist are transactional, each of which are flagged with an asterisk.

Use that checklist to help build out your automated campaigns within Oracle Responsys, which gives you powerful and intelligent tools to help you react to your customers’ behaviors and guide them along their customer journeys.

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Need help with your transactional emails or other email marketing needs? Oracle Marketing Consulting has more than 500 of the leading marketing minds ready to help you achieve more with the leading marketing cloud, including a Database Management & Compliance Services team to help you follow the law and a Campaign Automation Services team to help you optimize your triggered campaigns. To learn more, reach out to us at CXMconsulting_ww@oracle.com.