E-mail marketing
Financial services organisations are behind the times when it comes to e-mail marketing. Charlotte Goddard looks at the reasons why.
Anyone sorting through the pile of envelopes on their doormat will know that financial services companies are among the heaviest spenders on direct marketing in the UK. Nielsen Media Research found that of the top ten direct mail spenders in the UK, six are financial services organisations. According to the Royal Mail, 42% of marketers using direct mail also use e-mail marketing. However, many financial services companies have been trailing behind when it comes to e-mail, despite the benefits which the medium offers.
“I have received e-mails from credit card companies but never from banks and I have two online bank accounts,” says Mel Stanley, Head of Planning at Inbox Media, an agency which has created e-mail campaigns for clients such as Vodafone and BMW. “First Direct still send me masses of brochures about mortgages, but never an e-mail, which is a huge waste of money,” she adds.
Caution
Tim Rivett, Head of Advertising at the Royal Mail, believes that a natural caution
is behind financial services firms’ reluctance to use e-mail marketing.
“They are concerned about the potential damage to their brand which could
arise from taking it into a new environment,” he suggests. Certainly companies
which may already be taking some criticism on the amount of “junk mail”
they send do not also want to be associated with a medium which has become related
in people’s minds to the spam, or unsolicited commercial e-mails, which
jams their inboxes.
Logistical problems
Another potential obstacle for financial services firms, particularly banks,
is their existing computer systems. Lloyds TSB, for example, admits that its
current database system cannot hold customer e-mail addresses.
In addition, security-conscious financial services firms may not have full employee e-mail access. “If a bank limits its employees’ access to e-mail, then even if they are sending out marketing e-mails, if a customer replies in the same medium the staff cannot respond,” states Ruth Phypers, Managing Director of digital agency Hyper.
Digital signatures
A lot of the mail which financial services companies send out includes forms
requiring a signature. The “digital signature”, which involves encryption,
has been given legal recognition, under the Electronic Communications Act 2000,
but most financial services firms are reluctant to adopt it at present. “I
suspect e-mail marketing will become a more important tool for us when digital
signatures are more universally adopted,” says David Baughan, Senior Campaign
Manager at Lloyds TSB.
Benefits
The reluctance to adopt e-mail marketing means that financial services firms
are missing out on many benefits. “The cost benefit of e-mail versus print
is huge,” explains Inbox’s Ms Stanley. “An e-mail might cost
as much as a brochure pack to produce creatively but, even so, the cost per
e-mail sent might be ten pence, whereas with direct mail the cost is at least
50 pence if not more.”
Other benefits include targeting – it is much easier to create personalised e-mails by drawing in different content that is of interest to a particular customer segment than it is to create a number of different brochures – and tracking. E-mail marketers can tell who has opened the email and who hasn’t, as well as track which items in the e-mail were of interest to which recipients.
Not all financial services firms are lagging behind. NatWest, for example, is currently encouraging students to apply for bank accounts by sending them e-mails and even text messages. “The SMS is being used as a follow-up reminder to the e-mail,” says Andy Detheridge, Head of Internet Marketing at NatWest. “We are trying to talk to the students while they are in transition between school and university so e-mail and SMS, which they can access wherever they are, is a real benefit.”
Charlotte Goddard – Features Editor, Revolution