🗞 What's New: Transactional emails are wildly underrated

Transactional emails happen as a result of what a user does:

• Transactional emails can be an amazing way to increase your revenue. This guide shows you how to make the most of them!
• What exactly is "ramen profitable," and how do you get there? The tips below can help you determine your ramen profitability goal.
• Founder Nathan Ganser's third business was the charm. Here's how he applied lessons learned from previous businesses to successfully build, launch, and monetize Magic Heidi, an invoicing app, in just 60 days.

Want to share something with over 110,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

📧 Transactional Emails Are Underrated Opportunities

by James Fleischmann

Transactional emails happen as a result of what a user does. Therefore, the user expects to receive them, making open rates way higher. We're talking 40%-50% open rates, with click-through rates often hitting 10%-20%.

Your transactional emails include important content, so you want your users to read them. They can also be a powerful method for increasing your revenue.

Here's how to do transactional emails right, and capitalize on some lesser-known opportunities!

Transaction action

Transactional emails are automated emails that are sent to individual users when triggered by specific actions. They can be loosely categorized into four types:

1. Welcome emails: Triggers a welcome or thank you email.
2. Confirmation emails: Asks the user to confirm something, like their email address. It can also address something that they did, like confirmation of payment.
3. Notification emails: Notifies a user about, well...just about anything. It includes important account-specific happenings, password resets, usage reports, etc. These are highly dependent upon the functionality of your product.
4. Reminder emails: Sends a reminder about things like subscription renewals, incomplete account verification, etc.

Best practices

Here are the basics of sending a stellar transactional email:

1. Set your sender up right:

Conventional wisdom advises sending your transactional emails from a different email address than your marketing emails. Some people even send them from different domains or subdomains. The logic is that marketing emails often get flagged as spam, and you don't want that to affect your transactional emails.

That's good advice for most. But indie hackers have a rare opportunity to foster a direct line of contact from founder to customer, and that shouldn't be taken for granted. In the early stages, it's best to send both types of emails from your own business email. Follow conventional wisdom later, when you start outsourcing support.

Regardless of whether you agree with what I just said, never use a "no reply" email address. It's best to give your users a direct line of communication. After all, it's important to hear what they have to say.

Make sure to use your business domain; no personal Gmail accounts, please. As far as the display name, go with "[your name] at [business]."

Don't forget your avatar or profile image. It can increase opens by as much as 25%. Do this by implementing Brand Indicators for Message Identification (BIMI) so that your brand’s logo displays. Here’s how to do it! Alternatively, set up your own avatar through Google and Gravatar. Personally, I'd opt for a personal photo over a logo in the beginning.

2. Writing good copy:

Good copy is make or break. Let's start with the subject line:

• Keep the subject line short (<60 characters), less cutesy, and more direct. Save the cutesy stuff for the body of the email.
• Include every crucial detail, like the purpose of the email, and details related to it.

The preview is also very important:

• Either apply specific preview text, or make sure that the first 40-140 characters of the email can also work as the preview. That will be what displays automatically.
• Include only the need-to-know information, and hints as to why they should open the email.

Then comes the body of the email:

• Keep it concise and direct.
• Identify the purpose of the email clearly and prominently.
• Clearly identify any action items.
• Use typography and design to your advantage so the recipients get the gist of the email at a glance.
• Personalize the content with their first name, business name, and anything else that might be relevant.
• Maintain your brand voice. If it's a casual voice, add some delight with humor.
• Write like a human, not a robot.
• Let the recipient know what to do if they need help. Ideally, this is just clicking reply.
• If there are action items, use a strong CTA that harks back to the value they receive from doing what you want them to do.
• Don't use friction words.
• Avoid spam trigger words.

And, a few general pointers:

• Design for mobile first. Nearly half of email opens happen on mobile these days.
• Send the email right away when it is triggered. The exception here is the reminder email.
• Send only when it is necessary and valuable to the user.
• Keep an eye on your deliverability rate.
• Consider using a double opt-in to reduce your bounce rate.

Opportunities for transactional emails

1. Increasing revenue:

Since transactional emails get such great engagement, they're a perfect opportunity for promotion. Maybe that means upgrades to new tiers, upsells to new features, or cross-sells to other products.

But, you've got to be careful with this one. Don't overdo it. A good rule of thumb is 80/20; make sure that 20% or less is promotional. After all, the primary content of your transactional email is usually pretty important, so distracting from it is a bad idea, particularly for confirmation emails.

Payment failure emails are a good idea too, as this type of churn is often unintentional, and you can recapture some of that revenue if you're proactive. The same goes for end-of-trial reminders.

2. Increasing your following:

I'd be willing to bet that most of your users are not following you on social media. Include links to your socials, and encourage people to get involved and stay up-to-date by following you.

3. Boosting brand recognition:

By always using the same voice, colors, logos, and so forth, you can cement your brand in the minds of your email recipients.

4. Reminding recipients of the value you provide:

Hopefully, your users are well aware of how much value you're providing, but it doesn't hurt to remind them. Show them statistics about their usage and what they've achieved. Talk about the benefits of your product, and your value proposition. Link to case studies. Include social proof. Show off your product and its newest features.

This is particularly important when confirming receipt of payments. It's good to let users know that you've received a payment, but while you're at it, remind them of why they're paying you in the first place.

It's also helpful in welcome emails, as it can encourage users to explore the product further. Include links to FAQs, documentation, and support.

Tools

The email delivery service you use is important, as it can affect the deliverability of your emails. Here are some options I've seen recommended a lot on Indie Hackers. Most have a free plan or trial, but I'll include their cheapest paid tiers below for comparison:

• Mailgun: $35 per month.
• SendGrid: $19.95 per month.
• Postmark: $15 per month.
• Sidemail: $14.25 per month.
• Sendinblue: $25 per month.
• Amazon SES: $0.10 per 1K emails + $0.12 per GB of attachments.
• Mailchimp: $13 per month, and they include transactional emails.

Here are a few templates to get you started, and here's some great inspo!

Have you had success with transactional emails? Share in the comments!

Discuss this story.

📰 In the News

from the Growth Trends newsletter by Darko

🔎 Twitter has updated its policy to pursue more transparency in brand deals.

✅ Facebook's Certified Company program has launched globally.

🛣 Retool's path to product-market fit.

📲 TikTok's DM settings now let users choose who can message them.

🔌 Five tips to power your 2023 marketing strategy.

Check out Growth Trends for more curated news items focused on user acquisition and new product ideas.

🍜 Determining Your Ramen Profitability Goal

from the Hustle Newsletter by Oliver Meakings

Before you start working towards ramen profitability, you should understand what it means for you, and what your goals are.

In the spirit of build in public, I'll share some of the discussions and decisions that me and my cofounder, Wilson, have had about ramen profitability at Senja.

What is ramen profitability?

Ramen profitability is the amount of money you have to make to cover your business and personal expenses. It's the point where you can invest all of your time into your business without have to take other work or outside investment.

Does ramen profitability include revenue from freelance and other work?

No. Navigating across projects and client work can kill your productivity.

Is ramen profitability after expenses?

Yes. It's after taxes and business expenses. It is a profit goal, not a revenue one.

How long can we live at ramen?

You should consider how aggressively you need to reduce your living standards.

It's not just about hitting the ramen goal, but the opportunity cost of not working on other ideas, projects, and career goals. For example, I charge $300 an hour for my marketing consultancy work. How long can I give up work like that? What might that mean for a mortgage application, or for my savings?

We decided to commit to a ramen standard of living for six months if the signals were strong that we would break past it.

What will we have to sacrifice on both ends for profitability?

I've given up booze, eating out, my gym membership, my personal trainer, and my co-working membership, which made up about 80% of my disposable income spending.

Wilson's biggest concern is that he has no savings. When he had a job, he was saving steadily, but he hasn't done that since we started building Senja.

Ramen profitability when cofounders have different expense levels

This is a complex one for us. I live in England, and am committed to around $3K per month in rent and bills for the next 10 months. Wilson lives in Nigeria with family, and is currently able to live on around $500 per month.

Is ramen profitability the combination of our individual expenses? Or, for fairness, should we both take the higher amount?

We decided that Wilson's ramen profitability goal should include living on his own. We thought having a similar quality of life was fair, even if the costs to sustain it are very different.

Note: Me and Wilson were able to have open, frank conversations about our lifestyles and spending habits. For some, these discussions may be difficult to navigate, as they become quite personal. Make sure that you and your cofounder can be transparent with each other.

What we decided

• At $7K revenue and $1K expenses, we have $6K in profit.
• My ramen profitability is $4.5K.
• Wilson's ramen profitability is $1.5K.

Wilson agreed that I could take three times more money from the company so that we could both fully commit to its development and growth. How is this fair? We're cofounders with 50% equity each. We decided that our company will pay for my higher living expenses in the short term. But the transactions are recorded, and each of us will ultimately receive exactly the same amount from the company in the long run.

These are the thoughts and talking points we went through when discussing ramen profitability at Senja. Whether you are a cofounder or solo founder, I hope this helps you when it comes to setting your own ramen goal!

How did you arrive at your ramen profitability goal? Let's chat below!

Discuss this story.

🌐 Best Around the Web: Posts Submitted to Indie Hackers This Week

💵 How I used reviews to grow to seven figures. Posted by Justin Ferriman.

🤔 Is The Mom Test wrong? Posted by Ryan Randall.

📰 I grew my newsletter to a media business. Posted by Dylan R..

👀 Followers don't necessarily mean revenue. Posted by Zach Ang.

😶‍🌫️ How do you deal with being average? Posted by Hugo Hamel.

🙅‍♀️ Your competitors don't matter. Posted by Rmondo.

Want a shout-out in next week's Best of Indie Hackers? Submit an article or link post on Indie Hackers whenever you come across something you think other indie hackers will enjoy.

🪄 Nathan Ganser Went From Idea to Revenue in 60 Days

by Nathan Ganser

Hi, founders! I'm Nathan Ganser, and I finally have a success story to share. I've been working on bootstrapped businesses for the past several years, struggling to find users, pleading for friends to try my app, and hoping someone would subscribe.

This time, things have been different:

1. It took me a month to go from idea to MVP.
2. It took only a few days for users to find me and sign up.
3. A few days after launching a paywall, I got my first subscriber.

In hindsight, it really is a story of simply doing everything the way I was told I should do it. Here, I'm reviewing my past businesses, and demonstrating how this new business is a great example of following the bootstrapped business handbook!

Throwback to previous ventures

My first business, a personal CRM, took years to launch. It also wasn't solving a clear problem. It was a web app, so only SEO could save me, and I struggled to find users. Churn was super high for users who did subscribe, and most of the revenue came from users who didn't use the app and had forgotten to unsubscribe.

Still, I reached $500 MRR.

For my second business, an app to send voice notes through email, I did things better. I launched on the Chrome store, which made user acquisition easier, and I built an MVP in a month.

At the time of writing, it is growing on average by $30 per month, and is about to reach $500 MRR as well. Still, it isn't solving a clear problem. Sending voice notes through email is nice to have, but is not a necessity for most people.

The new business

Switzerland recently made it mandatory for all invoices to have a QR code that replaces the older payment slips.

This means that all non-Swiss invoicing apps have become obsolete. I realized that there wasn't a single invoicing app for Switzerland in the App Store or the Play Store.

I quickly built an invoicing app with Flutter, and released it on all the stores and the web. Magic Heidi has been out for only 30 days, and it's already crossed 100 downloads and four paid customers.

I'm literally the only option if you want to create a Swiss invoice in the app stores. The alternatives are web-based only.

Key elements for a successful bootstrapped business

Every startup and business book preaches these elements, and I'm breaking them down to show their relevance in my businesses:

1. You need to solve a clear problem: Keeping in touch with friends was meh. Sending voice notes over email was okay(ish?). Sending an invoice? Now, that's a clear, solid problem that people will pay to solve.
2. You need a reliable way to acquire users: When it comes to having a clear user acquisition strategy, SEO didn't work in my first business. Now, I'm in the App Store and Play Store without competition. Solid!
3. Your customers need to be willing to pay for what you offer: In my first business, I had 50% churn. Obviously, that's not good. It was okay in my second business, at 17%. But, in my current business, churn is very low (though, in some ways, it's still too early to say).
4. Because you're bootstrapped, you need a niche: My app is not just an invoicing app, it's an invoicing app specifically for Switzerland.
5. Because you're bootstrapped, you need high margins: It is still very early, and I'm not ramen profitable yet, but the path to get there is very clear. I'll post an update this spring!

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

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Special thanks to Jay Avery for editing this issue, to Gabriella Federico for the illustrations, and to James Fleischmann, Darko, Oliver Meakings, and Nathan Ganser for contributing posts. —Channing