Transactional Emails in 2024: Best Practices, Advantages & Challenges

Transactional emails are essential for building trust between the user and the company. These emails facilitate communication by allowing users to stay up to date about the changes in their accounts, track the status of their purchases and be informed when their account is accessed.

We will delve into best practices, advantages and challenges to give you a comprehensive outlook on the transactional emails.

For a list of providers, see transactional email services.

What are transactional emails?

Transactional emails are automated and personalized informational messages that are triggered based on specific user activity. From welcome emails to password reset messages, account updates, order confirmations and payment updates, these transactional messages provide event-based notifications to boost customer experience and high open rates.

• Transactional email services offer automated messages tailored to individual users, while supporting API integration for seamless connectivity.
• These emails employ SMTP relay services to guarantee email delivery across different systems, while also providing IP warm-up and dedicated IP address options to enhance reputation and mitigate security risks.
• Furthermore, transactional email providers ensure secure email transmission through DomainKeys Identified Mail signature (DKIM) and Sender Policy Framework (SPF) authentication.
• Detailed reporting and analytics enable monitoring of email performance metrics such as click-through rates, delivery rates, inbox placement, and identification of errors or spam issues.

To learn more about the differences between transactional and marketing emails, the process of sending transactional emails and their industry-based use cases, check out our transactional email article.

12 transactional email best practices for more efficient email delivery

1. Use clear and descriptive subject lines

Ensure that the email subject lines are concise, relevant, and straightforward and ideally not more than 50 characters.

Aim to convey the key message directly in the subject line to enable users to understand the email’s content without opening it. This practice can be particularly useful for shipping notifications, which would allow customers to get only the essential information at a glance.

2. Avoid “no-reply” email addresses

Avoid sending your transactional emails from a “no-reply” email address and ensure that your emails allow for customer replies.

These “no-reply” email addresses can communicate to your customers that their feedback or responses are not needed, although it’s important that they have a channel to reach out to you.

Engaging in email exchanges can enhance your email deliverability. Using a “no-reply” address can damage overall engagement and the effectiveness of your email communications.

3. Personalize

To increase user engagement, transactional emails should be tailored based on the expectations of the targeted user. With relevant user information, you can leverage:

• recommendation systems to offer relevant products or services.
• use email personalization solutions for a more personalized and engaging user experience.

4. Be consistent with your brand voice

To make your transactional email more recognizable, ensure that the design and the tone of your message align with your brand. This approach includes implementing your brand’s logo, color scheme, and brand voice to your transactional emails.

5. Mobile application responsiveness

Many users will read emails on their mobile devices, so it’s crucial to ensure that the email design is responsive on all screen sizes.

6. Ensure secure email communication

Transactional emails usually deal with sensitive information such as password reset, purchase receipts and user delivery information. Avoid sending sensitive data like full credit card numbers or passwords. Use secure links for actions requiring sensitive information.

Adopt email authentication: It is important to guard your sending reputation to support high email deliverability. Set up authentication protocols such as DomainKeys Identified Mail signature (DKIM), Sender Policy Framework (SPF), Domain-based Message, Authentication, Reporting, and Conformance (DMARC) to avoid potential security breaches.

Build trust by showing your company’s logo in emails: Integrate Brand Indicators for Message Identification (BIMI) to your email messages to enhance email security and brand visibility. BIMI allows displaying brand logos next to your authenticated emails and increases inbox security by assisting users to identify and trust authenticated messages. 

Separate IP addresses or domains: Using different IP addresses for your transactional and marketing emails ensure that your transactional emails would not get flagged as spam. Marketing emails, especially cold outreach emails have a high rate of being flagged by users. Therefore, they can hurt the email delivery rates if they are sent from the same IP or domain that sends transactional emails.

7. Clear Call-to-Action (CTA)

Some transactional emails such as subscription confirmation or cancellation messages, require the user to take an action with a call-to-action button. For these emails, the button should be clearly visible for the user to find it easily.

8. Use social media links and icons

Integrating your business’ social media icons and links into your transactional emails allow your customers to be more informed on the recent developments of your brand and would eventually increase customer engagement.

9. Include all necessary information

For order confirmations, shipping notifications, or payment receipts, include all relevant information such as purchasing and order numbers, expected time of delivery, and customer support contact information to resolve customer related issues.

10. Legal compliance

By obtaining necessary permissions and providing clear sender information, ensure that your emails comply with email regulations, such as GDPR in Europe or CAN-SPAM Act in the United States.

11. Avoid using unnecessary promotional content

While it’s useful to include some promotional content such as social media links to your transactional emails, it is essential not to overload the email with marketing details.

Unlike marketing emails, transactional emails do not aim to promote a product or a service to increase sales. Therefore, it is crucial to keep the focus on the transactional message without using unnecessary marketing content.

12. Feedback loop

Encourage your users to provide feedback about the information or service provided in the email. This would allow you to improve your open rates in time.

What are the advantages of transactional emails?

Personalization

Transactional emails inherently involve personalization as they are triggered by specific user actions or behaviors. This allows for highly relevant and customized content and it can take various forms:

Targeted content: Emails can be tailored to the specific action taken by the user, such as a purchase confirmation, account update, or password reset. This would provide information that is directly relevant to the individual’s interaction with the brand.

Custom recommendations: Based on the transaction or user behavior, businesses can include personalized product recommendations, tips, or related content that might interest the user. This would enhance engagement and potentially drive additional sales.

Dynamic content: Utilizing dynamic content that changes based on the user data such as recent browsing history or preferences, improves the user’s connection with the brand.

Security and privacy

Transactional emails play a crucial role in maintaining the security and privacy of user accounts and transactions:

Confidential communication: These emails provide a secure channel to communicate sensitive information, such as order details, account changes, and password resets, directly to the user’s inbox.

Verification and authentication: Transactional emails often include verification links or codes for account creation and email address verification. These processes would enhance security by ensuring that the action was initiated by the rightful account owner.

Transparency: Sending timely notifications about account activities such as logins from new devices or locations, allows early detection of unauthorized access while building trust in the brand’s commitment to user privacy and security.

Customer Experience

Effective use of transactional emails contributes to a positive customer experience:

Immediate acknowledgment: Sending an instant email after a transaction or account action reassures the customer that their action was successful and provides a record of their activity.

Support and guidance: Including helpful information, such as FAQs, guides, or customer support contacts, can empower users to solve issues on their own and improve their overall experience.

Feedback opportunities: Transactional emails can be used to solicit feedback on the customer’s experience, demonstrating the brand’s commitment to improvement and further personalizing the customer journey.

Brand visibility

You can utilize transactional emails as an opportunity to reinforce brand identity and visibility:

Consistent branding: Including your logo, brand colors, and other elements in transactional emails contributes to brand recognition and familiarity.

Cross-Promotion: While the primary focus is on the transaction or account action, the subtle inclusion of promotional content or related products can increase visibility and interest without being intrusive.

Trust building: Regular, reliable, and useful transactional communications can strengthen the user’s perception of the brand as trustworthy and customer-centric.

What are the challenges of transactional emails?

It is important for businesses to keep in mind these possible challenges that may arise while sending transactional messages:

Poor email deliverability

Poor email deliverability happens when the emails do not successfully reach the recipient’s inbox. They can be filtered into spam folders or blocked entirely. These issues can be caused by:

Sender domain reputation: When the sending domain or IP has a history of sending spam, email providers can block or filter the messages sent from that domain.

Email content and formatting: Transactional emails that appear spammy, have misleading subject lines, or contain certain keywords can trigger spam filters.

Recipient engagement: Low engagement rates (e.g., opens, clicks) can negatively affect deliverability.

Authentication issues: When email authentication protocols such as SPF, DKIM, and DMARC are not configured correctly, email deliverability issues might occur.

Inconsistent or incorrect information

Inaccuracies in transactional emails can undermine trust between the sender and the recipient. Common issues include:

Data sync errors: Outdated information might be delivered to users if the data is not synchronized in real-time with user actions or updates.

System errors: Glitches or bugs in the email server can lead to delivering incorrect information, such as inaccurate order details or account information.

Limited personalization

High personalization is the key for boosting customer engagement. Lack of personalization can be caused by:

Limited data utilization: Using only generic data may cause poor personalization.

Segmentation issues: Lack of proper segmentation can result in sending irrelevant information to the users, which would lead to low user engagement and satisfaction.

Dynamic content: Limitations in incorporating dynamic content based on user behavior or preferences can damage personalization efforts.

Slow response times

Punctuality is critical for sending effective transactional emails. Slow responses may lead to frustration and confusion and can be caused by:

System latency: Delays in the email server while processing transactions,

Queueing issues: If the email server has poor queue management,

Third-party delays: Third-party providers with downtime or performance issues.