Transactional and operational messaging: Marketing when it matters most An Experian CheetahMail white paper May 2005
Executive summary Triggered, real-time messages are a vital component of a comprehensive and successful email marketing program In this era of ever-changing buying habits and newly regulated telemarketing and email solicitation, it has become increasingly difficult to deliver the right message to the right customer at the right time. Gone are the days of marketing to the masses through one discernible channel, when customers were forever loyal and retention was virtually guaranteed. Today, the task of engaging customers is far more arduous, often requiring non-traditional email tools that enable you to market precisely when it matters most. Transactional and operational messaging, also called triggered or event-based messaging, is as powerful a tool as it is underappreciated. Simply put, every order confirmation, shipping notice, receipt, cancellation, order change, warranty reminder, registration confirmation, abandoned shopping cart, subscription expiration, and profile change becomes an HTML marketing vehicle to personalize, brand, promote, cross-sell and up-sell other products and services to an attentive and already engaged customer. The impact of transactional/operational messaging on response and revenue statistics has been dramatic. According to Forrester Research, event-based emails are 17% more likely to be opened than newsletter or promotional emails, and customers are 20% more likely to click through on them. They are often read multiple times, and are usually last to be deleted. Additionally, Jupiter reports that transactional and operational messages result in 3% conversion rates (of those with open rates of less than 22%), well over the conversion average of other direct marketing programs. CheetahMail response data from transactional/ operational campaigns supports these findings, as you will see in the recent case of a Fortune 500 resort and entertainment provider (see Opportunities section). However, even with these proven results, only 20% of marketers say they use transactional/operational messaging as part of their overall strategy (Jupiter, Effective Email Marketing 2004). The document highlights the marketing opportunities in HTML transactional and operational messaging, explains how the event-based messaging process works, and gives recommendations for optimal deployment. According to Forrester Research, eventbased emails are 17% more likely to be opened than newsletter or promotional emails, and customers are 20% more likely to click through on them.
Opportunities Looking at appropriate scenarios for implementing transactional messages If executed correctly, transactional and operational messaging can be one of your most effective marketing tools. Below are just a few examples of how CheetahMail s event-based messaging (EventMailer) can be implemented: Order confirmations and shipping notices Sending highly personalized HTML order confirmations in real-time can create additional revenue opportunities from already engaged customers. Order confirmations and shipping notices list not only the details of each order, but also dynamically generate the customer s name, inserts complementary product offerings and discounts related to the purchase, and relevant brand equity (taglines, logos, descriptions, etc). When the product is shipped, another similar marketing message is triggered and delivered in the form of a shipping notice. Below is a comparison of a generic confirmation vs. a CheetahMail-enabled one:
Abandoned shopping cart Event-based messaging gives companies an opportunity to re-engage shopping cart abandoners. Yankee Group estimates that as many as 77% of users have abandoned a shopping cart at least once in their lives. With CheetahMail, an abandoned shopping cart can trigger a real-time email (which could also include a survey) to the prospect that promotes the product and offers him/her an incentive to purchase. It also provides an opportunity for the marketer to reinforce the benefits of the abandoned item encouraging the completion of the transaction. Lost/forgot password Since immediacy is vital for lost password requests, event-based messaging system must be robust in its delivery. Failing to send real-time lost password requests often results in lost opportunity and revenue, as prospects click over to other sites rather than waiting. As with order confirmations, lost password requests can pitch complementary offers. Other uses include: Registration/Subscriber Confirmations Cancellations and Updates Profile Changes Warranty notices Personalization can be much more than simply inserting a recipient s first or last name. For example, it can be tied to geography, as in the case of a retailer who wants to include an in-store promotion (using zip codes for proximity). Personalization Personalization has been a marketing buzzword for several years, and with good reason. According to AMR Research, personalization in direct marketing accounts for a 30% uplift in sales as compared to the average uplift of less than 1%. Personalization can be much more than simply inserting a recipient s first or last name. For example, it can be tied to geography, as in the case of a retailer who wants to include an in-store promotion as part of an online registration expiration notice (using zip codes for proximity). It can also be tied to the cross-sell offer and the sales pitch. With CheetahMail s dynamic content capabilities, customers receive the content, images and offers that are most relevant to them. Revenue generation The ability to cross-sell and up-sell is probably the most important attribute of transactional/ operational messaging. Unlike direct mail, which could take weeks to arrive on your doorstep, event-based messaging is instantaneous and performed while customers are still connected and in buying mode (with credit card in hand). Reaching these customers at this point in time with graphicallyintense cross-sell/up-sell offers has proven itself to be a low-cost revenue generator. The following real-life scenarios exemplify a couple of the many cross-sell and up-sell opportunities available to email marketers: Leading online electronics retailer sends an HTML order confirmation in real-time to a digital camera purchaser. Using variable dynamic content and CheetahMail s EventMailer, the retailer includes an offer on camera accessories, such as storage cards, camera cases and printers. Additionally, the email contains different discount offers on each accessory. Upscale fashion retailer sends a triggered shipping confirmation to a customer who recently purchased an overcoat. The HTML email thanks the patron for their business, and includes a 15% discount on designer gloves and hats.
Leading financial services firm shows a prospect who abandons a shopping cart right before he confirms the opening of a Roth IRA. This abandonment immediately triggers an email that explains the tax benefits of Roth IRA compared to other investment choices, as well as the advantages offered by the financial services firm itself (no fees, etc). Revenue generation case study One CheetahMail client, a Fortune 500 hotel management company, recorded an open rate of well over 100% with transactional and operational messaging, as guests were found to refer back to their email confirmation for room details and days. Each time a guest opened the confirmation was another opportunity to up-sell additional nights and cross-sell amenities, such as entertainment at the specific property, restaurants and spa activities. As a result, the client sold an additional 500 rooms per month, generating nearly $300,000 in additional monthly revenue all from what used to be simple text-based order confirmations and lost password reminders. Brand reinforcement Every communication with customers should always reinforce your company s brand and message, particularly in the case of order/shipping confirmations, cancellations, and forgot password requests, as they are widely opened and read. Colors, fonts, taglines, and logos should remain consistent with the website or offline marketing campaign. HTML creative enables this kind of branding in your email communications. Using text-based emails for these important messages costs marketers opportunities to emphasize their brand during the entire customer lifecycle. HMV s optimized order confirmation messages had a conversion rate that was 19X higher than its standard promotional messages. Reduced call volume Reducing call volume is a priority for many organizations, as it contributes to a considerable percentage of CRM costs. Since transactional and operational messaging is fully automated and sent in real time through CheetahMail s EventMailer, the sales order process is greatly improved and customer service costs are reduced. Customers can be immediately informed that their order has been placed, when it has shipped, and when to expect delivery. This realtime communication process reduces the number of customer service calls and inquiries. Other Benefits Dynamic messaging With the CheetahMail EventMailer and dynamic content integration, repetitive tasks, such as making sure the appropriate complementary offer is delivered and the correct customer name is listed, are now fully automated and dynamic, saving considerable development time and eliminating any chance for human error. A completely automated process also decreases the amount of Marketing and IT resources required to handle data uploads and modifications. These valuable resources can now be reallocated to other revenue-generating projects. Call-center integration CheetahMail s API/EventMailer system can also be seamlessly integrated with a client s call center to minimize the resource time required to address customer inquiries related to products and services. For instance, as in the case of one CheetahMail client, the EventMailer system automatically sends customized product quotes to prospects who have just spoken with a customer service rep in the call center.
Reporting All of the reporting metrics and testing offered through CheetahMail s standard system are made available for transactional and operational messaging, including sent, bounce, open, click-through and transaction activity. In regards to testing, each event can be assigned to one of n different sets of mailing content ( A/B/ split ) for the purpose of testing the relative effectiveness of new content. Delivery monitoring As event-based messages are often the most important email messages sent, CheetahMail uses delivery reporting to track delivery on each message. This allows CheetahMail clients to know if each message was not delivered and then utilize other methods to contact this customer (i.e. call and ask for an updated email address). Right offer at the right time Finally, transactional/operational messaging enables marketers to collect business intelligence, make content relevant, test marketing promotions, and deliver the right offer to the right person at the right time.
How does it work? Explaining the nuts and bolts behind CheetahMail s transactional messaging system EventMailer / API Diagram Customer 1 2 4 Website 3 CM Event Mailer 1. Customer makes online purchase (event occurs) 2. Website returns Thank You page 3. Website generates API call to CM Event Mailer 4. CheetahMail sends response (confirmation) to customer based on preset parameters Customer receives email and responds (opens, clicks, etc) All response and delivery data is tracked and reported in real-time The EventMailer, part of CheetahMail s comprehensive emarketing platform, is comprised of a proprietary lightweight API system. An API, or Application Program Interface, is a set of functions that define the way in which one piece of software communicates with another. In this case, the communication is between the CheetahMail database, the client s website and the customer. The process of setting up an event-based mailing consists of four steps: Definition of an event (order, ship, etc) in the CheetahMail system Definition of mailing content in the CheetahMail system Setting up the API call to trigger the event Associating the event with the mailing content to generate a mailing Definition of an event Every event has a name and unique identifier (event ID), which connects API calls to mailing content. The specific event is identified in the API call, and mailing content is associated to an event in the CheetahMail system. Therefore, when an API call is received by the system, it looks up the associated content and uses it to generate the message. This mapping allows the client to change the mailing content without having to change the API call. When an API call is received by the system, it looks up the associated content and uses it to generate the message. This mapping allows the client to change the mailing content without having to change the API call.
Definition of mailing content Mailing content is defined in the CheetahMail event mailer system in a manner very similar to that used for setting up mailing content for other promotional communications or newsletters in CheetahMail s Standard Bulk Mail system. Setup of API call The API call follows the standard CheetahMail API conventions. Access credentials in the form of a cookie are required. The call to the system also specifies an event ID, target email address, optional source (affiliate) identifier, and optional personalization/variable content parameters. Association of event with content An event is associated with mailing content in the CheetahMail System. Optionally, the events can be assigned to one of n different sets of mailing content based on a pseudorandom function ( A/B/ split ), e.g. for the purpose of testing the relative effectiveness of new content. Advantages of CheetahMail EventMailer system Dynamically inserted content for precise targeting Formatted messages (HTML, etc.) multipart Text, HTML, multipart, and AOL-adapted formats supported Marketing (cross-sell, up-sell) within message (marketing when it matters) Link tracking Open tracking Full reporting (including roll-up and delivery at the customer level) Testing capabilities (nth-ing) and comparison reports Easily change and tweak message/product/offer/creative for optimal results To maximize security, variable/personalization data is transmitted to CheetahMail using an encrypted link (SSL/HTTPS), and removed from the system as soon as the email is sent
CAN SPAM compliance issues While CheetahMail encourages you to review these definitions and differentiations with your legal counsel before engaging in event-based messaging, we can offer some guiding principles for you to consider when deploying these types of messages. Transactional messaging only The CAN SPAM Act exempts transactional messaging from the law s commercial compliance requirements, such as the need for a commercial or postal identifier as well as the need for an opt-out request. CheetahMail s flexible event based-mailer system respects these exemptions for transactional messaging clients and enables clients to choose whether to include these elements in their transactional messages. Of course, all of other CAN SPAM Act messaging requirements of transmission and sender integrity remain and are maintained throughout our processes. Mixed transactional/commercial messaging In December of 2004, the Federal Trade Commission clarified the definition of commercial email by its primary purpose. With respect to transactional or relationship messages combined with commercial content, the compliance requirements for dual purpose messages include three main elements: 1. If any part of the subject line of an email includes commercial content, then the email message is a commercial message. Here s an example: One important element of the CAN SPAM Act of 2003 is that it clearly defines and differentiates between transactional or relationship messaging and commercial messaging. Transactional subject line: Shipping notification from Merchant.com Commercial subject line: Shipping notification and a great offer from Merchant.com 2. If the transactional or relationship messaging content is not at or near the beginning of the body of the message and is significantly preceded by commercial content, then the message would be considered commercial. Note that it is still perfectly acceptable for a transactional message to include rich HTML templates and content, including the use of a sidebar with commercial cross-sell and up-sell offers as previously indicated in the whitepaper. 3. Finally, if the commercial content of an email message overwhelms the transactional or relationship content, then the message could be considered commercial. Each of these three principles comes with the understanding that it is up to the reasonable recipient to determine if the subject line, header, or overall message s primary purpose is commercial or otherwise. Please consult with counsel or email privacy@cheetahmail.com with respect to complete CAN SPAM Act interpretations and commercial compliance requirements.
29 Broadway, 6th Floor New York, NY 10006 (1) 212 809 0825 T (1) 212 809 6378 F www.cheetahmail.com About Experian CheetahMail Experian CheetahMail is the trusted service provider of online marketing solutions for top enterprises worldwide. Offering industry-leading email marketing and customer intelligence solutions, as well as providing a broad range of client services, Experian CheetahMail enables clients to build data-driven, relevant relationships with their customers. Servicing the world s most recognizable brands, Experian CheetahMail s globally diverse client base includes Barclays, Borders Books, Discovery Communications, H&R Block, KLM, Sears Holdings Corporation and Wyndham Hotels. Experian CheetahMail, a business unit of Experian Group plc (LSE:EXPN), was founded in 1998 and is headquartered in New York City with offices in Los Angeles, San Francisco, London, Dublin, Amsterdam, Paris, Barcelona and Melbourne. Experian plc All rights reserved. The word Experian is a registered trademark in the EU and other countries and is owned by Experian plc and/or its associated companies.