The Ultimate Guide to Effective Transactional Emails

Introduction

While marketing emails often take the spotlight with flashy, promotional charm, there's another kind of email that plays a vital role behind the scenes: transactional emails. These messages quietly facilitate countless online transactions every day, helping customers confirm their orders, track packages, reset passwords, and more. 

When done right, transactional emails can share timely information with your recipients, build trust with your customers, improve user engagement, and reduce the number of customer support inquiries your business receives.

In this guide, we're delving into the world of transactional emails. We'll explore what transactional emails are, why they matter, and how you can leverage them to enhance your communication strategy and build stronger relationships with your audiences. Whether you're a seasoned email marketer or just building out your email program, understanding the art of transactional emails is essential. 

Let's get started.

What are transactional emails?

A transactional email is an email sent to a recipient following an action they took on your website or application. Alternatively, the CAN-SPAM Act defines it as any message in which the primary purpose is to “facilitate an already agreed upon transaction.”

Common examples of transactional emails include:

• Order confirmations

• Shipping notifications

• Delivery confirmations

• Password resets

• Double opt-in messages

• Legal updates

• Account notifications

Triggered by a user action, these emails typically have high engagement rates and are thus expected by the recipient. Additionally, these emails typically contain critical information (like a summary of charges, delivery date estimates, or a password reset button), so users are more likely to open and click on the content within them than, say, a mass marketing email. 

Why are transactional emails important?

Transactional emails are a vital communications channel between your business and your customers. These emails help your customers verify that they took the action they intended, like purchasing the right item and quantity, creating an account, and more. Plus, these messages share critical information regarding your customers’ purchases and shipments, so your users know when to expect their products to arrive or their services to occur. The timely delivery of these messages can play a significant role in building customer trust and loyalty.

Your business can also use these messages to engage users further, like by including related products in an order confirmation email to try to entice them to purchase complementary products. We’ll share a few examples later on that showcase how to upsell customers using transaction emails.  

Key elements of effective transactional emails

Subject lines

Your subject line is typically the first thing that catches your recipients’ attention, so keep it concise and straightforward. In fact, 71% of global respondents said a subject line strongly or somewhat strongly influences their decision to open an email. So if you ensure yours are clear and to the point, you’ll likely see favorable open rates. 

Sender name and email address

To inspire trust, pick a clear sender name (like your company name) and email address to help your recipients quickly tell the message is from your brand. 

Personalization

Don’t underestimate the power of personalization. In Twilio’s The State of Customer Engagement 2023 report, 66% of consumers admitted they’ll leave a brand that doesn’t provide them with a personalized experience. Luckily, there are plenty of ways to personalize email content, like using the recipient’s name in the subject line or email body or catering content to their gender, job title, past purchases, and more. You can even use more complex forms of personalization, like audience segmentation and behavioral-based workflows, to send targeted content to specific users.

Content

While there’s some room for fun messaging and visuals, transactional emails should include a clear summary of the action your customers took and well-defined next steps. For example, if the email confirms their recent purchase, share the estimated shipping timeline and a call to action (CTA) to view their order status. Or if they’ve requested a password reset, explain what steps they’ll need to take to set up a new password and include a link to begin that process. 

Call to action

Every email should have a single CTA with the action you intend your customers to take, and transactional messages are no exception. Think about what your recipient’s logical next step would be and translate that to a CTA. For example, if a customer’s package just shipped, they might want to track it so they know when to expect it. In this case, a CTA to real-time shipping updates would be relevant and helpful—and likely most appreciated. 

Transactional email best practices

Before you get sending, here are a few best practices to follow to send highly engaging and customer-centric transactional emails: 

Use automation

Timeliness is imperative when delivering transactional emails. So use automation to ensure these messages reach your customers within seconds of their completed action. This is key to building trust and ensuring your users see and open your message while your brand and their action is still top of mind.

Maintain consistency

Transactional emails should still have the same branding and messaging tone that you use across your products, website, mobile app, social media channels, and more. This consistency can build trust with consumers, especially when they can open a message and instantly tell it’s from your brand. 

Lean into your branding

Just because transactional messages contain critical information doesn’t mean these emails can’t have personality. If your brand has a fun and flirty tone, feel free to sprinkle that into your transactional messages too. Of course, this won’t make sense for all brands or transactional messages, but if your brand has this flexibility, feel free to make these messages memorable for your audiences. 

Use responsive design

Since modern customers are on the go, they might not open every email you send on a computer screen. That’s why it's critical to use responsive design and ensure your messages are mobile-friendly. This way, your recipients can reference their emails from any device and quickly find the information they need.

Use a separate IP address

Most businesses use separate IP addresses for sending marketing and transactional emails. Here’s why you should too: 

• Improved deliverability: Marketing messages have a higher likelihood of getting classified as spam compared to transactional emails. Therefore, using separate IP addresses can safeguard the positive sending reputation of your transactional IP address, ensuring the sustained high deliverability rates of your transactional emails. 

• Clearer monitoring and reporting: Keeping your marketing and transactional email types separate can also make monitoring and reporting the health and success of your email programs smoother. This way, you can more effortlessly identify and resolve issues and track email performance. 

• Transparent compliance: Using separate IP addresses help your business to remain compliant because marketing and transactional emails adhere to different rules and opt-in/out mechanisms. For example, unlike marketing messages, your transactional emails don’t have to include unsubscribe links at the bottom of every email. 

Need help separating your IP addresses? Both SendGrid Pro and Premier offer IP pools, allowing you to group your dedicated Twilio SendGrid IP addresses together for more control over your deliverability, and as a result, your sender reputation. Learn more on our pricing page. 

Run A/B tests

A/B tests aren’t only for marketing emails. So experiment with your transactional emails to see how you can drive better engagement or more sales.

Here are a few testing tips to keep in mind:

1. Don’t make assumptions. When creating any new test, keep an open mind—you might not know your recipients as well as you think you do. Before you write something off, test it. The results may surprise you.

2. Test one element at a time. Testing multiple factors at one time can give you inconclusive results. So be patient and let each test inform your next. 

3. Remember that testing is an iterative, ongoing process. Your subscribers and product(s) are always changing, so you’ll never run out of elements to test.

Avoid dead-end emails

Dead-end emails are any emails without a CTA or a clear next step for your recipients. This can be common with transactional emails, like an order receipt summary with no further action required or a shipping confirmation with no clear CTA. These emails tend to create a discontinuous experience for your subscribers and missed opportunities for your customers to engage with your brand.

Even something like a payment receipt can have a CTA that makes sense for your customer. For example, you could recommend related products, include a link to FAQs, or encourage customers to view their order status and shipping information on your website. This allows them to continue on their customer journey, even after a purchase. 

How to pick an email service provider for your transactional emails

Partnering with the right email service provider (ESP) is crucial to the success of your email program. Your ESP should provide the full picture of your customer engagement, allowing you to send targeted messages to the right people. From improving cross-functional collaboration to prioritizing deliverability, here’s what you should keep in mind when beginning the search for a great email partner (and what you should ask vendors during your conversations):

1. Deliverability

Your email delivery rate—the rate at which your emails actually make it to the inbox—is the most important metric for your email program's success. That’s why choosing an ESP with proven email deliverability is crucial for any sized business. You’ll need a partner who can deliver your messages reliably and consistently, so inquire about an ESP's email deliverability track record and process/strategies to help senders manage their IP reputation during your search. 

At SendGrid, we offer everything our customers need to maximize deliverability, improve inbox placement, and protect sender reputation, including:

• Our Delivery Insights dashboard which helps customers understand overall email program health and pinpoint where they can improve deliverability. 

• Our partnerships with Inbox Monster and Valimail help customers monitor deliverability and next-gen DMARC (plus, DKIM and SPF) authentication, respectively.

• Our dedicated IP address and shared IP pool offerings give your brand more control over your sender reputation and deliverability.

• Our SendGrid Quality Score (SEQ) helps customers measure the performance and status of a sender’s reputation based on cues from mailbox providers (like opens, bounces, blocks, spam complaints and engagement recency). 

2. Scalability

While you might send 100 or 10,000 daily emails, that number could multiply in the coming years, months, or weeks as your business grows. In that case, choose a provider that can scale alongside your business and add features as your needs grow. 

Therefore, inquire about the vendor's ability to accommodate your current and future needs. This proactive approach will help you steer clear of problems such as deliverability issues, throttling, and outages if your email program becomes too much for the provider to handle. It also gives you peace of mind, knowing you picked a solution that can meet your changing business needs—so you won’t have to restart your search for a new ESP in another year.

With SendGrid’s Email API, you can upgrade your plan depending on sending volume and unlock tools and features like:

• Additional webhooks

• Email validations

• Dedicated IP addresses

• Automated, dedicated IP warm-ups

• Reverse DNS

• And more

Check out our pricing page to learn more about SendGrid plans and features. 

3. Security and compliance

An ESP that prioritizes the safety of your business and your customers is crucial. Ask what security precautions and systems a vendor has to better understand if their platform is secure enough for your business. You can view SendGrid’s approach to security on our trust and security page. 

4. Reliability

You want an ESP that can deliver your message to recipients every time you hit send, without fail. To understand how reliable a platform is, be sure to have the vendor elaborate on their uptime and reliability guarantees. You don’t want to pick a solution that can’t deliver your messages on your most important campaigns of the year. 

With 99.999% platform and API uptime, SendGrid’s custom mail transfer agent can support your business. Processing an average of over 135 billion emails every month, our reliable Email API has everything you need to orchestrate tailored customer engagement and maximize connections with behavior-triggered emails. Plus, we recently surpassed our record, processing over eight trillion emails.

5. Customer support

There’s never a good time to have an email issue, but it’s generally better to have one when your ESP’s customer support agents are around and ready to help. Of course, 24/7 coverage would be nice, but don’t expect every ESP will offer it. So during your software evaluations, ask the provider to share:

• What support options they offer (like email, chat, video, or phone) 

• If any of these options are limited based on account tier

• Their hours of operations 

• Their average response times

You might also want to take a peek at their knowledge base to get a feel for the platform and the self-serve resources available to customers. 

At SendGrid, we prioritize around-the-clock customer support, bringing you 24/7 access to our team on the following channels and platforms: 

• Web ticket

• Social support on X

• Chat support (for paying customers)

• Phone support (for customers with a Pro or higher account) 

Of course, if you require ongoing, personalized help optimizing your email program, our Expert Services team is always here to help. Our dedicated team of email experts can help you tackle your biggest email challenges, whether building a program from the ground up, restoring lost results, or taking your performance to the next level. 

6. Template customization

What good is an ESP if it’s hard to use? So ask about template customization during your evaluations to get a feel for how flexible (or inflexible) the tool is. Depending on your email needs, you might be able to get away with basic customization, or you might require a more robust tool that can meet your requirements. 

Don’t forget to ask about personalization as well. Email personalization is essential to engaging recipients, so make sure the solutions you consider not only accommodate the level of personalization you require but also integrate seamlessly with whatever platforms you use to store customer data. 

SendGrid’s dynamic email templates help designers, developers, and marketers to edit templates, collaborate on content, and send programmatically effortlessly. You can import your own HTML or start with our email template library. Plus, customize content with HTML editing or our WYSIWYG editor, so anyone in your company can build and send messages.

7. Analytics and reporting

You’ll want to know how your email program fairs, so ensure it’s quick and straightforward to pull metrics with your chosen provider. From tracking data in real time on insight-rich dashboards to running custom analyses using data exports, ask your ESP candidates to show you their analytics offerings to see if they meet your needs. 

Want to prove the power of your email program? SendGrid’s Deliverability Insights has everything you need to monitor and improve email health from a single dashboard. You can track the delivery, open, click, bounce, and spam report rates of your transactions emails effortlessly to diagnose issues and optimize your campaigns as needed. 

8. Ease of integration

While email is a powerful channel on its own, you unearth its real potential when your ESP seamlessly integrates with other solutions in your tech stack. By connecting your ESP to a customer data platform or customer relationship management system, your business can send more targeted and personalized messages to your audiences. Or if you’re an e-commerce company, integrating your ESP with your Shopify system or shipping provider can help you send automated transactional emails to your customers. In other words, if you know there are certain systems you’ll need to power your email program, ensure your ESP can work alongside them. 

Transactional email examples

Ready to revolutionize your transactional emails? Here are a few best-in-class examples to help inspire your email creation: 

Shipment confirmation from Recess 

Canned beverage company Recess shows how even transactional emails can have personality. While the email still includes key information, like the recipient’s shipping and billing addresses, the message playfully declares carrier pigeons will deliver the order. 

Order confirmation with Ipsy Refreshments

Beauty membership service Ipsy Refreshments delivers personal care products directly to your doorstep. Since a subscription model can be a little more complex than a one-time purchase, Ipsy Refreshments spells out exactly what consumers should expect post-order, like:

• Adding and removing products from future orders

• Understanding shipment schedules

• Skipping or canceling shipments at any time 

When customers know exactly how to manage their subscriptions, they’re less likely to reach out to support, helping reduce the ticket volume for the Ipsy Refreshments customer service team and leaving customers happy and informed about their orders. 

Cancellation confirmation with OpenTable

Online restaurant-reservation service OpenTable sends this email to confirm that a user has canceled their reservation. The CTA provides clear next steps for the customer to take: book a new table. 

Reservation upsell with citizenM hotels

Boutique hotel company citizenM sends this email to confirm a recipient's recent booking and ensure they have all the details of their stay. Not only does the message summarize their reservation, but it also offers a few upsell opportunities for the hotel, like adding breakfast, late checkout, and overnight parking to their stay. This allows the customer to customize their stay while allowing citizenM to receive additional revenue. 

Conclusion

Want to uplevel your transactional messages? Guarantee your business-critical emails reach your recipients with Twilio SendGrid’s Email API. 

When it comes to delivering account sign-up emails, usage notifications, password resets, purchase receipts, and more, SendGrid has you covered. You can: 

• Integrate and deliver your messages in minutes using our RESTful APIs and SMTP, libraries, and interactive documentation.

• Achieve optimal inbox placement with our purpose-built mail transfer agent.

• Run real-time email activity, analytics, and reporting.

Ready to start sending? Create a free SendGrid account and start building more effective transactional emails today.