Cracking the FTC Code: What You Can and Can't Do With Transactional E-mail

August 22, 2008 By Spencer Kollas

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There's been a lot of buzz lately about how marketers should consider integrating transactional e-mail into their overall e-mail marketing programs.

The allure of using transactional e-mail comes down to its ability to generate impressive response rates compared to traditional promotional messages. A 2007 consumer survey by MarketingSherpa found that 75 percent of respondents "Frequently" or "Very Often/Always" opened and read transactional messages versus 45 percent who opened or read other permission mailings with the same frequency.

That's not surprising given that the nature of these service-based messages means that they contain highly relevant information that typically is expected by the recipient.

Of course, the topic of what is and isn't allowed under CAN-SPAM almost always comes up during any discussion about using transactional e-mail for marketing purposes. While it's always a good idea to verify that you're in compliance with CAN-SPAM laws, the good news is that when done properly, this potentially lucrative and brand-building practice is allowed. The key comes down to knowing the law and acting accordingly.

While deciphering a Federal Trade Commission regulation like CAN-SPAM might appear to be a daunting process, its stipulations for transactional e-mail are pretty straightforward and completely in line with responsible e-mail marketing practices.

Cracking the code
The first step in cracking the code is to recognize a transactional e-mail in all of its forms. CAN-SPAM outlines five various types in great detail, but they essentially boil down to the following:

• Purchase confirmations
• Notice of delivery of goods or services
• Warranty, product recall or safety information
• Changes to a subscription, membership, account or other ongoing commercial relationship
• Employer communications regarding employment or related benefits

Next, CAN-SPAM stipulates that the main focus of the message must be about the transaction or service message at hand, which includes both content areas -- subject line and e-mail body.

In other words, you need to treat this as a transactional message that just happens to include some helpful information or promotional offers as a secondary element.

Therefore, the subject line of a purchase confirmation e-mail needs to clearly and exclusively reference the transaction -- with no mention of a commercial promotion. The same goes for the body of the e-mail.

Essentially, CAN-SPAM dictates that if a recipient could reasonably interpret the primary purpose of the e-mail to be commercial, then it is commercial and must follow all the provisions outlined for commercial messages under CAN-SPAM, such as opt-out and address requirements.

It all boils down to this: Don't let there be any confusion about the primary purpose of the message. You're adding promotional content to a transactional e-mail, not vice versa.

Respect the customer
These transactional messages are important communications with your customers, and you should meet their expectations by providing the transactional information in a clear way.

Any promotional information should be perceived as relevant and included in a way that doesn't distract from the main message. Erring on the side of caution will help you gain the respect of your customers, which will pay dividends down the road in follow-up purchases and brand loyalty.

In fact, while you need to make sure you're compliant, in many ways, CAN-SPAM is the low bar of e-mail marketing.

Adhering to a higher standard of established e-mail marketing best practices, in effect, will help ensure that you maintain your customers' trust across all communications -- whether marketing or transactional. Respecting customers by meeting their expectations and delivering relevant content is the No. 1 rule.

One caveat: The information discussed here should not be construed as legal advice. After following this advice, have a legal expert do a final review for CAN-SPAM compliance.

Spencer Kollas is director of delivery services for StrongMail Systems, a Redwood City, Calif.-based e-mail marketing solutions provider. Reach Spencer at skollas@strongmail.com.

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