Ultimate guide: Transactional email explained (what, why and how)
Transactional emails are the silent workhorses of customer communication, quietly doing the heavy lifting to drive engagement and shape the customer experience—and they’re finally getting the attention they deserve.
We’ve created this simple guide to help you better understand transactional email and its use cases. We’ll give you the what, why and how of transactional emails, including common examples of the different types.
What is a transactional email?
A transactional email is an automated email sent based on a specific action or trigger performed in a system or application, for example, a password reset email. These types of emails are typically HTML email templates containing personalized information relating to the action or user, like order details, subscription renewal information, or account activity summaries.
Because transactional emails are triggered by user activity, people expect to receive them. What’s more, they are time-sensitive because they usually confirm an action (like a purchase), contain next steps or instructions (like when onboarding an app), or facilitate some kind of functionality (like the ability to change password via a password reset link). This means that good deliverability is crucial.
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Transactional email vs. marketing email differences
Marketing emails are promotional, so they contain content and offers with the purpose of driving a commercial goal, like selling a newly launched product or encouraging sales with a special discount. They are usually scheduled campaigns rather than triggered by an action. (Although they can be when we’re talking about marketing automation.)
Here’s a quick comparison of transactional vs. marketing emails:
Transactional emails | Marketing emails |
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Types of transactional emails
As transactional emails are triggered by various user actions on a system or app, you can imagine how many different types there are. We’ve listed some of the main ones below. You can also check this article for more examples of transactional emails.
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1. Confirmation and invoice emails
3. Event-driven notification emails
5. Account notification emails
6. Feedback and support emails
Confirmation and invoice emails
Confirmation emails are triggered by a transaction (like a purchase, registration, or RVSP) with the purpose of—you guessed it—confirming it. This type of email is popular for e-commerce.
Examples:
Event RSVPs
Subscription renewals
Booking/reservation confirmations
These automated email confirmations should contain information that’s useful for the customer, such as:
Information about the product or service
CTA to track the purchase, view the order or reservation in the browser, etc.
Payment and pricing details
Shipping details
Optional: Instructions or next steps
Specific request emails
These time-sensitive emails are triggered by a request or action the user takes, which must be completed via the email. Request emails are popular with SaaS, e-commerce, and fintech.
Examples:
Two-factor authentication emails (2FA)
One-time password emails (OTPs)
These types of emails are super important because without them, the user can’t complete whatever they are trying to do, like access their account. They should include:
A unique URL that recipients can click on to enter a new password
The randomly generated 2FA code or OTP
What to do when the recipient didn’t request a reset or try to log in
How long the link or code is valid for
Optional: Instructions on how to update the password
Event-driven notification emails
These types of emails are triggered by events in your app, and the transactional email is used to notify the recipient.
You’ll find these types of emails used with social media or online communities, SaaS, and e-commerce.
Examples:
Social media notifications (friend requests, likes, follows, tags, mentions, etc.)
Shipment updates (shipped, delivered, delayed, canceled, etc.)
Project status updates
Event-driven notifications should include:
Information about the event that triggered the email, for example, a preview of a comment or the updated status of a task
A CTA to respond, view more information, or open the relevant page
Behavioral emails
These transactional emails are triggered by a user’s behavior or interaction with your company’s app or website. This can be anything from requesting information to leaving items in the online shopping cart. The main goal of behavioral emails is relationship-building and re-engaging with customers.
Examples:
Registration-related, like welcome and onboarding emails, verification emails
Site activity-based, like abandoned cart emails, viewed products
App or email activity, like inactivity notifications, emails celebrating engagement (“you’ve used our language-learning app 5 times this week, well done!”)
You can set up welcome emails in both your transactional email platform and your email marketing software. Marketing welcome emails will lean more promotional, while transactional emails will contain information and content necessary to help the user get started.
A good welcome email will include:
A link or CTA to get started with the next step or confirm the email address
Important information about their account and your product or service
Tips, FAQs and documentation that will help the user
Account-based notification emails
These emails are sent every time something happens in the user’s account. You’ll often see this type of email sent from SaaS and fintech organizations.
Examples:
Overdue invoices
Like request emails, account notifications usually contain super important information, so deliverability is key. If users fail to receive invoices, expiration notices, or updates about plan changes, it will have a significant impact on the customer experience.
Feedback and support emails
After a customer completes an order or talks 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 and encouraging online reviews to simply informing people that their support request was received.
Examples:
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
Transactional email best practices
An exceptional transactional email experience builds trust and increases customer satisfaction. Satisfied customers are more likely to engage with your brand repeatedly and recommend it to their peers. Here are some best practices you can follow when creating your transactional emails.
1. Align your emails with your brand voice and design.
2. Use a recognizable email address and avoid using a non-reply email.
3. Be clear and concise in the subject line, preheader and body of your email. Get straight to the point and avoid any fluff.
4. Structure your email so that it’s easy to scan and find the most important information straight away. Use short paragraphs, headings, bullet points, lists, and dividers.
5. Keep promotional emails separate, and send them from another server/platform if possible.
6. Use clear CTAs.
7. Include any important legal information and policies, such as terms and conditions, privacy policy, returns policy, etc.
8. Make your emails accessible and responsive. Your emails should be easy to read and formatted correctly on all devices. Plus, be sure to use descriptive CTAs and alt text so that recipients using assistive technology can easily read your content.
How to stay legally compliant
Since anti-spam laws, such as the CAN-SPAM act, don’t apply to transactional emails, it’s not necessary to collect opt-in consent to send them as long as you have a lawful base to do so. For transactional emails, this falls under legitimate interest.
To send any promotional content, you must receive opt-in consent. You’ve probably noticed that a lot of transactional emails, especially from e-commerce businesses, contain commercial content such as recommended products or discount codes (Amazon comes to mind).
While the Federal Trade Commission could deem these messages to be commercial and issue a penalty, there are a few guidelines you can follow to avoid this while still including offers in your transactional emails.
1. The majority of the email content should be transactional and fall under the lawful base of legitimate interest.
2. Commercial content should be placed at the end of the message, with all important information placed above it.
3. The subject line should be clear about the main intent of the email. Any reference to offers, promos or recommended products should be avoided.
Why are transactional emails important for businesses?
Transactional emails are important because they perform numerous functions that are crucial for a good customer experience:
1. They provide certainty that the order we just placed or the subscription we just upgraded has been processed. Removing any feelings of uncertainty or anxiety helps to build trust.
2. They are features of your service that help guide people through the customer journey and provide the functionality to complete key actions and make your platform more secure.
3. They keep users and customers up to date and increase engagement by providing timely notifications about account or app activity.
4. They reinforce your brand recognition with consistent messaging.
5. They allow for regulatory compliance by providing critical information where necessary.
Plus, transactional email presents opportunities for generating revenue via cross-selling and upselling—just make sure you follow best practices and don’t overdo it!
Why email deliverability is crucial for transactional emails
Speedy delivery is important for transactional messaging because a lot of the time, they contain time-sensitive information. It’s frustrating for customers if they want to do something but need to wait for a password reset or next steps or if they don’t receive an order confirmation right away. Email delivery should be instant or your brand image may suffer.
For this, you’ll want to use an advanced sending infrastructure built to reliably send high volumes of email messages. This will ensure that your messages quickly arrive in recipients’ inboxes. For this reason, it’s super important to pick a transactional email service provider that’s known for its impeccable email deliverability.
Check out Email Tool Testers’ comparison of the best SMTP service providers for deliverability, including MailerSend.
KPIs to measure transactional email performance
Finally, Key Performance Indicators (KPIs) for transactional emails allow you to analyze how effective your communication strategy is. They also allow you to monitor deliverability and identify potential issues.
Open rate
Open rate gives you the percentage of emails that have been opened, allowing you to evaluate the effectiveness of your sender name, subject line and preheader.
It can also help you to flag potential deliverability issues; if your open rate has suddenly decreased, it could indicate that your emails are landing in the spam/junk folder.
Click rate
Click-through rate (CTR) is the percentage of sent emails that was clicked. Tracking CTR for certain types of emails can help you understand if your email flow, design and experience are effective.
Bounces
Bounces indicate the percentage of emails that couldn’t be delivered. This is an important metric to track as it gives you some insight into the health of your recipient list—a high percentage of bounces can negatively impact your sender reputation and deliverability. The accepted benchmark is 2%, so you could aim for anything lower than this.
Soft bounces occur when the email is temporarily undeliverable. For example, when the recipient’s mailbox is full. Hard bounces are more significant. These are the emails that can permanently not be delivered, usually because the mailbox doesn’t exist. You can find and remove invalid email addresses that bounce by using an email verification tool, like MailerSend’s.
Spam complaints and unsubscribes
Spam complaints and unsubscribes are inevitable. Since both are taken into account by Internet Service Providers (ISPs) and can affect your deliverability, it’s important to track them. Unusual spikes in spam complaints or unsubscribes may indicate issues such as unauthorized use of your email for spam or phishing purposes.
Emails processed and delivered
Monitoring sent and delivered emails helps you to understand how ISPs handle emails from your server. If there is a large discrepancy between the two, there could be an issue with your email service provider that is affecting your deliverability.
How to start sending transactional emails
The best approach is to use an email service provider that specializes in transactional emails. (In case you didn’t know, it’s really important to keep transactional emails and promotional emails separate, you can read why in our article.)
MailerSend is one such solution. You can sign up for free and start sending immediately with a trial domain to test out the capabilities. Send emails via the API (developers’ choice) for more advanced features like transactional email templates, bulk sending, webhooks and inbound routing, or get the same high rates of deliverability with a more simple setup using SMTP.
Check out the following guides and resources to learn more (or share them with your technical team!).
How to send emails with Node.js
How to send emails with Laravel
How to send emails with Python
How to send emails in WordPress
Giddy up: Time to employ those workhorses
For SaaS, e-commerce stores, and financial services, transactional emails are non-negotiable. Not only are they essential to running your business smoothly, but they also help to boost your brand image and enhance the customer journey. When done right, transactional emails present lots of opportunities to increase conversions and grow customer relationships.
Ready to see how personalization and industry-leading deliverability can transform your transactional emails?
Join MailerSend for free today and get 3,000 emails/month.
Let's talk about transactional emails. We'd love to hear which types of emails are most useful for your business. Sound off in the comments!
