We understand that there is a fine line between spam and marketing. However, banks dramatically underutilize email marketing to drive business. We highlighted a case study not too long ago where a couple simple reminders can help boost deposit balances and improve profitability.
If you fall into the camp of being scared to bother your customers via email, consider this – what if we told you that quantitatively, your customers would be better off if you marketed to them? This is the case for a class of marketing emails called “transactional emails.” These are emails around a specific transaction that tend to reinforce customer service, thus are openly welcomed by customers. Currently, only about 40% of large banks utilize these emails and less than 20% of community banks do, thus presenting a great opportunity.
Utilized correctly, customer satisfaction goes up when receiving these emails. Equally important is that these emails allow you entry into the attention of your most valuable prospects – your existing customers. The basics of marketing, frequency and value are never more applicable when it comes to email marketing. Here are some sub-categories of transactional emails, in order of bank use popularity, which we believe all banks should consider:
The welcome email – The welcome email is a simple email welcoming the customer to the bank or to a new product. This has a confirming quality that is an opportunity to reinforce the brand and your attention to customer service.
The transactional receipt – Few customers will ever complain that you are helping them better keep informed and helping them with record keeping. Sending an email after the posting of interest, closing a loan, opening/closing a deposit account or any other activity is helpful and welcomed.
Reminder instructions – This email probably has the most potential. For customers that are not depositing to their savings accounts, not utilizing their line of credit or similar, sending a simple reminder of how to utilize the product is helpful and serves to not only keep your brand active, but usually increases transaction activity by about 15% to 30%.
The Thank You – Any major milestone deserves honest thanks, and customers appreciate you remembering. Anniversaries with the bank, referrals, trying new products, hitting certain deposit balances (like going up in tiers), all serve to help drive business.
Countdown and date reminders – Tax day, new regulations, new financial related laws, health savings account cut offs, etc. all serve a purpose to keep your customer better informed and organized. Brokerage firms like Charles Schwab and Fidelity have been doing this effectively for years.
Putting It Into Action
The above emails are examples of emails that do not intrude, but serve to increase customer satisfaction and promote your customer service oriented culture. In fact, customers are tolerant of even an intelligent cross-sales pitch within the email.
A good example of this is that if you can work in a related call to action – “Here is a confirmation that your checking balance just hit X – way to build the cash balances! Now might be the time to move some funds into a longer term (retirement savings account, building maintenance account, equipment depreciation account, etc.).” This is proactive, anticipatory banking at its finest and is the key to creating long run value for both your clients and shareholders.
Being more active with transactional emails is not without its challenges. We have worked with several automation systems to make this operationally easy so that analytics can be obtained, CAN-SPAM compliance can be managed and effectiveness optimized. A commitment to monitoring open rates and clicks is imperative so you can optimize your effort and better deliver emails that have value and meaning.
We believe every bank should increase their email marketing. Using effective transactional emails is a great place to start building balances, satisfaction and engagement.
Submitted by Chris Nichols on April 26, 2016