With new digital marketing channels empowering consumers and heightening expectations more than ever before, brands are now forced to deliver more relevant, consistent and personalized experiences across the entire customer lifecycle. For marketers, this means tearing down silos and orchestrating targeted messages across a growing spectrum of channels including email, direct mail, website, mobile apps, point of sale, call center and social media.
To date, marketers’ primary focus has been on integrating promotional messages spanning various marketing programs (e.g. acquisition, cross-sell, up-sell, retention and loyalty) as well as channels. However, marketers are missing out on an opportunity to increase brand loyalty and drive incremental revenue by not applying the same principles to transactional messages.
By definition, transactional messaging facilitates, completes or confirms a previously agreed upon transaction, including order confirmations, shipping notifications, delivery confirmations, statements and password requests. What many marketers have yet to realize is that these messages are a tremendous, untapped revenue source, offering an unbelievably high engagement rate.
If you’ve ever made a purchase or conducted business online, you know that transactional messages are immediately opened and read. Because of the valuable, often time-sensitive content, customers both want and expect these messages. Consequently, they enjoy unbelievably high open and click-through rates. According to Epsilon’s Q3 2011 North America Email Trends and Benchmarks Results report, transactional messages generate an average open rate of 42 percent, highest among all message types, and an average click-through rate of 8.9 percent, second only to editorial emails.
Considering there’s no better time to market to customers than when they’re actively engaged with a brand, transactional messages present a tremendous opportunity to marketers. Using average order value, transactional message volume and conversion rate, experts estimate that embedding marketing offers into transactional messages can generate millions annually in incremental revenue for the average retailer. This same logic can easily be applied to any number of industries, including travel and hospitality, media and entertainment, and financial services.
For example, by inserting personalized offers into transactional messages, online dating site Meetic increased conversion rates by 10 percent. Similarly, online photo site PhotoBox increased conversion rates by 16 percent, while in general, open rates were two-to-three times higher and reactivity rates increased by 50 percent.
Despite these impressive business results, an alarming percentage of marketers aren’t yet optimizing transactional messaging programs. According to MarketingSherpa’s 2012 Email Marketing Benchmark Report, “roughly one quarter of marketers do not include any promotional offers in transactional messages.” Many more aren’t realizing their full potential due to significant limitations with their existing infrastructure—particularly proprietary, homegrown messaging systems.
In order to exploit this revenue opportunity and transform transactional messaging into a revenue generator, three key things must happen:
1. Marketing must take ownership of transactional messaging and manage it holistically within the context of the customer experience;
2. Brands must consolidate multiple, disparate systems via a central hub that processes, enriches and routes all transactional messages via multiple channels;
3. Marketing must ensure promotional messages are personalized and relevant, and that consistency is maintained with transactional content.
Leveraging Transactional Messaging to Enhance the Customer Experience
As many marketers have realized, the bar has been raised. Customers today are more informed, more connected, and more empowered. In order to effectively monetize transactional messaging without alienating empowered customers, marketers must not only assume greater ownership of these programs but manage them as part of a holistic customer experience.
In other words, messaging must be managed at the relationship level, not by department or channel or message type. This means that transactional messages must be seamlessly coordinated across multiple departments, as well as with promotional messages. Moreover, all messages must be managed seamlessly across a growing number of channels.
By unifying transactional and promotional messaging in a cross-channel, customer-centric approaches, brands can not only deliver consistent, relevant experiences but also drive incremental revenue with coordinated, targeted offers. This unified messaging approach is crucial to building and sustaining more lasting one-to-one, personalized customer engagements. It’s what brands are increasingly referring to as conversational marketing, and it’s the fundamental key to success in the age of the customer.
The Keys to Transactional Messaging Success
If you already have a transactional messaging program in place, the following list of questions can be used to assess your current strategy and infrastructure, and determine whether your program could be optimized to reduce operational costs, increase brand consistency and generate incremental revenue.
- Are your transactional messages generated by multiple information systems, with little to no coordination or consistency? Are these systems custom, in-house developments?
- Can you insert personalized one-to-one marketing messages and offers into transactional messages, based on real-time web behavior and other customer knowledge?
- Do you have visibility into the deliverability and performance (opens, clicks) metrics of your transactional messages?
- Is the response data from transactional messages captured in a central database and leveraged for progressively better targeting/personalization across messaging programs and channels?
- Are you currently coordinating your transactional messages with promotional messages? If so, is this done manually or are you leveraging any sort of automation?
In the age of the customer, the key to transactional messaging success is balancing marketing requirements with heightened customer expectations. Consumers today demand timely, relevant and consistent communications – from transactional and promotional messages alike. Ultimately, brands that provide seamless, personalized experiences across channels and devices will be rewarded with share of mind and wallet.