Ultimate guide: Transactional email explained (what, why and how)
You most definitely know what a transactional email is. Your inbox is probably full of them! Look for the emails verifying your accounts, confirming your orders or resetting your password. Those are transactional emails.
While you are familiar with these emails, you might wonder how these transactional emails work. And, as a developer, manager or agency, should I be sending transactional emails too?
To help you understand and dive into transactional emails quickly, we’ve created this simple guide.
We’ll give you the what, why and how of transactional emails including common examples of the different types. After you’ve gained this new knowledge, you can check out the glossary of terms so you can talk confidently about transactional emails.
What are transactional emails?
Transactional emails are notification emails that are automatically sent after a trigger is activated by a user. Just think of your typical e-commerce transactions: invoices for recent purchases, abandoned cart reminders and delivery updates.
Transactional messages are timely and contain valuable information for recipients. They are typically HTML templates filled with dynamic content and sent using an automation workflow. In many cases, people expect the email to come their way (they might even refresh their inbox until it has arrived!).
The difference: Transactional email vs marketing email
Marketing emails are often sent in bulk at a time the sender decides on. Transactional emails, on the other hand, are notifications sent to a person when they interact with your website, landing page or app (and thus trigger the message themselves).
This is why you’ll see much higher open rates for transactional emails than for promotional emails.
Another difference is that the content of transactional emails is primarily informational and functional. Where marketing emails are promotional in nature, transactional emails share information or offer steps to move a transaction forward (such as account verification emails).
For this reason, people do not need to opt-in for transactional emails. If a customer orders something from your store, you’re allowed to send an automated email purchase confirmation.
For marketing campaigns, you need permission for sending. And once you do, you need to give people the opportunity to opt-out by providing an unsubscribe link in each email.
To get a better understanding of the different transactional emails your business can send, let’s look at each type in depth.
Different types of transactional emails
Transactional emails are emails that are triggered by the recipient, so you can imagine there are many different types (in this article we’re showing some transactional email examples).
To make your life a little easier, we’ve categorized all the transactional emails so you get a better understanding of which types there are, and how they work.
Jump to a category of your choice
Confirmation and invoice emails
Specific request emails
Event-driven notification emails
Account-based notification emails
Feedback and support emails
Confirmation and invoice emails
How it works: These emails are triggered after a completed purchase, registration or RSVP. The trigger can be a sign-up or order button on a website, or when the user’s email is verified (and the sign-up process is thereby completed).
Invoice receipt emails
Tracking code emails
Tell me more: Let’s take the order confirmation email. For these emails, the number one rule is: the sooner it arrives, the better. When customers make an online purchase, they want to receive their receipt fast and straight into their inbox (not their spam folder). Any delays or mishaps can result in a poor user experience and affect their impression of your brand.
These virtual email receipts should contain information that’s useful for the purchaser, such as:
Product information (with or without product pictures)
Call to action with a link to track the purchase, view the order in the browser, rate the order, etc.
Payment and pricing details
Optional: Instructions or next steps
Optional: Other product recommendations
Specific requests emails
How it works: These time-sensitive emails are triggered by a specific action the user takes. The email content contains the requested information (such as a password reset link).
Password reset emails
Two-factor authentication emails
Any emails about retrieving lost account information
Tell me more: The most important type in this category is the password reset email. These emails must include:
A unique URL readers can click on to enter a new password
What to do when the reader didn’t request a reset
Optional: Instructions on how to update the password
Optional: If the reset link is only valid for a limited time, mention the expiration time
Event-driven notification emails
How it works: Where many transactional emails are triggered by the recipient, event-driven notification emails work a little differently. These events are performed by other people and the transactional email is used to notify the recipient.
You’ll find these types of emails used with social media or online community websites. Event-driven emails are sent in instances where someone sends a friend request or tags you in a post.
Social media notifications (friend requests, likes, follows, tags, mentions, reminders, etc)
Shipment updates (shipped, delivered, delayed, canceled, etc)
Tell me more: Let’s look at this automated comment notification from Disqus. Each time someone leaves a blog comment, the admins or authors are automatically notified (if this setting is turned on). The button link redirects to the Disqus dashboard, where blog admins can manage comments and reply to them.
How it works: As the name suggests, these transactional emails are triggered by a user’s behavior or interaction with your company’s app, website, etc. This can be anything from requesting information to leaving items in the online shopping cart. The main goal of these behavioral emails is relationship-building and re-engaging with customers.
Registration-related: Welcome and onboarding emails, FAQ emails
Site activity: Abandoned cart emails, viewed products, shared posts, site comments, watched videos, or web pages, etc
App or email activity: Inactivity notifications, emails celebrating engagement (“you’ve used our language-learning app 5 times this week, well done!”)
Tell me more: Let’s have a closer look at welcome emails. You can set up welcome emails both in your transactional tool and in your email software. In both situations, the email campaign will be triggered as soon as a subscriber joins a group or completes a form/step (such as clicking the register button or verifying their account).
Welcome emails typically contain information about your business and what to expect. It’s a great chance to leave a lasting impression and start building a relationship. Get people familiar with your business and make them excited about what’s to come!
Below you can see Grammarly’s welcome email. It shares quick links to the online editor, different browser extensions and subscriber email preferences. Note too how the email ends with a CTA to learn more about their premium plan—a subtle way to upsell.
Account-based notification emails
How it works: These emails are sent whenever a new user creates an account, and then every time something happens in the account—like an invoice that’s overdue or a change in the subscription. Transactional emails make it super easy to keep your admin in check, as the notifications are automatically sent according to the rules you define. There’s no need to manually keep checking subscriber accounts.
Account creation emails
Account verification emails
Failed payment emails
Trial expiration emails
Plan upgrades or changes
“Someone tried to log into your account” notifications
Tell me more: About account verification emails? Okay!
In a world of bots, catfishes and fake princes, it’s important to check whether people are really who they say they are by using an authentication email. This email makes sure people verify their account before it’s marked as completed (and unlocks further features). It’s an easy step that people are used to doing, and it gives you better-quality subscribers.
Don’t overthink the copy. Just keep it short and simple, instructing readers to click the verify button—like Discord does below.
Feedback and support emails
How it works: After customers complete an order or talk to your team, it’s nice to follow up and see whether they were satisfied with their experience. The goal of these emails can range from collecting feedback, to stimulating online reviews, or simply informing people their support request was received.
Post-purchase feedback emails asking for a review
Post-service feedback emails after contacting support
Confirmation emails that tell the recipient their support request has been received
Tell me more: Feedback emails are the easiest way to collect information that helps you to improve your services or product. You can make the survey as long as you’d like, though we recommend keeping it short to improve the reply rate.
Booking.com automatically sends transactional emails with one simple question: How would you rate your stay in one simple click? The answer automatically leads to their review landing page, where customers can elaborate on their answer.
Why email deliverability is crucial for transactional emails
Transactional email messages can make or break the customer experience. Because they are sent in real time, the email delivery needs to happen quickly when a customer triggers the action. When someone places an order, the email should send out instantly, or your brand image may suffer.
This is why it’s super important to pick an email provider and tool that can deliver this promise. Look for a transactional email service provider that’s known for its impeccable email deliverability. You’ll want to use advanced sending infrastructure so that your messaging arrives directly into the reader’s inbox.
When choosing your email and/or transactional service, make sure to separate your marketing emails from your transactional emails (for example by using a different account for each purpose). The main reason is to make sure your most important emails like transactional emails get delivered, and fast!
Speedy delivery is important as customers request specific information or wait for the next action to take—hence the email delivery should be instant. If you mix your marketing emails with transactional emails, it can negatively impact the deliverability, as marketing emails can get blocked by spam filters or receive spam complaints.
This will speed up the sending process and makes it easier for people to unsubscribe from your marketing newsletter, but remain subscribed to transactional emails. Some people don’t want to receive your newsletter, but they should still get their order confirmations.
And on a last note: To improve the email deliverability of your transaction messages, make sure that you adhere to the CAN-SPAM Act guidelines. This Act is explained in the glossary further down.
A short glossary on transactional email terms
Now that you know a lot more about transactional email terms and how they work, it’s time to up your vocabulary and get familiar with the terminology. We’ll finish this guide with a short glossary of terms to remember.
Let’s start with the term API, short for Application Programming Interface. In this context, we’re not talking about beer, but about a software intermediary that makes it possible for two different applications to communicate.
An API gives a better user and developer experience by allowing you to automate the data transfer between the applications and optimize the process. For example, you can get all the data about your recipients from your CRM in real-time.
API tokens, or access tokens, are used for authentication when sending emails or accessing server-specific endpoints. They are preferred to using a username and password because you can revoke an API token any time and assign different permissions.
To regulate spam and set a national standard for sending commercial e-mail in the United States, the CAN-SPAM Act was introduced in 2003. In its entirety, the name stands for Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003. The act includes requirements for commercial message sending, the right for subscribers to unsubscribe and penalties for violations. More details can be found here.
Dedicated IP address
A dedicated IP means it’s unique to your website. Unlike shared IP addresses where hundreds of websites can join, this type of IP is dedicated to you. With email sending this is important, as you’re the only person reliable for the quality and reputation of the IP. The better the quality, the better your email deliverability. A dedicated IP keeps potential scammers out of the door.
A domain is the address that people see in the “From” field of the email header. To ensure that your transactional emails reach the inbox of your recipients, you will need to verify your domain’s DNS records before sending emails.
Email API is an advanced version of email sending. Usually, two simple protocols are used to send emails: SMTP and POP3. They get the job done by allowing you to authenticate and send an email message from one person to another.
Today, email API has all the features of SMTP and more. It allows you to send emails in a more efficient way, it has better personalization features, and has better server side feedback.
SMTP relay server
Let’s first decipher SMTP, which means Simple Mail Transfer Protocol—the protocol for delivering outgoing emails (also, getting them from one email server to the other).
Then there are SMTP relay servers, third-parties that you can use to send your bulk email to mail servers. These servers are a trusted third-party that can help you deliver high-volume sending and transactional emails. An SMTP server its job is to provide the technology and expertise to relay email over SMTP.
A suppressions list contains email addresses that have been rejected during the sending process. It is required by the CAN-SPAM Act to identify recipients who have unsubscribed or marked your email as spam. The list also includes bounces and other emails and domains that you have blocked.
Webhooks are a way to get real-time notifications about various events without having to constantly poll the API. It uses HTTP callbacks to listen for events at your URL endpoint so that you can automatically trigger a reaction.
PHEW! We know this was a complex topic but you’ve made it through. Well done!
Hopefully, this article helped you to better understand what transactional emails are, and the different types you can implement in your email strategy. The quality of your transaction messages all starts with the delivery time, so remember to pick a transactional email tool that guarantees lightning fast delivery.