Maximizing technology: The five 'E's of e-mail marketing practices

Northwestern Financial Review, Feb 15-Feb 28, 2003 by Parenteau, Ray

E-mail has become a popular (and sometimes unpopular) medium for marketing. So how can financial institutions use e-mail to gain a competitive edge without their communications falling into the "unpopular" category? By doing what they've always done best: building and maintaining a trust relationship before even one e-mail hits a customer's in-box.

Financial institutions are in the best place possible when it comes to communicating with their customers. The good ones have an established trust relationship with their customers and the communities they serve. This is a perfect platform upon which to build an e-mail campaign.

E-mail is a personal medium. That's why people get so emotionally charged about spam. All of us are besieged with too much of it and, as a result only those who have a trusted relationship get through. The rest end up in the delete box, often discarded by filters before they are seen.

Communications from someone's own bank don't get filtered out if the relationship is a positive one. As a result, financial institutions are in a prime position to use e-mail as a communication vehicle.

People are used to getting one-on-one online communications from their banks because the product of financial institutions is primarily information - rates, how to use money, account balances, etc.

In' addition, consumer acceptance of online financial transactions is growing. In fact, e-mail is quickly becoming the communications channel of choice for many borrowers. This is quite unlike a store where the clerk is the communications channel. The speedy, timely delivery of information, in itself, becomes part of the value proposition.

So, how can your financial institution make the most of this new and very personal media? Make sure your e-mails follow the five `E's: Marketing e-mail should be Expected, Exceptional, Evolving, Enabling and Effective. Here's more:

Expected - If you're going to communicate with the customer via e-mail, make sure it's expected. You need to get permission (we call it an "opt-in") from the customer. If they know it's coming and they recognize who it's from, they will have no problem with you sending it.

How do you get opt-in from your customers? Request their e-mail address at various contact points with the customer. Have a sign-up form on your Web site. You should specifically ask for an e-mail address and offer the Web site visitor the opportunity to specify what they would be interested in receiving and how often. For instance, you could offer a newsletter, rate alerts or specific information about financial services (retirement planning, educational planning, etc.).

Exceptional - Deliver something of value to the recipient when you e-mail them. Make it relevant, exciting, enticing and timely. E-mail is especially effective at delivering timely information like rate changes, or product offers that depend on rate movements.

Communications should be relevant to the recipient, not the sender. So, don't use e-mail for things like announcing new employees or donations to local charities. (Save that for your e-newsletter.)

Evolving - Every e-mail message should build your relationship with your customer or prospect. For financial institutions this could be things like rate information, market updates, product updates, usage tips and other .service" information. These help cement the relationship. Every e-mail message from a financial institution should contain information that opens up a new facet of the relationship between it and its customers.

For example, if a bank knows that its target is homeowners, e-mailing these customers with information on home values and declining interest rates would be a way of evolving the relationship, while encouraging them to refinance their homes.

Enabling - An e-mail that enables the relationship provides a mechanism for your customer or prospect to act on the message. The beauty of e-mail is that recipients can respond on-the-spot without doing anything other than click.

Effective - E-mail provides some of the best tracking mechanisms to measure effectiveness of any marketing tool. Analyzing response patterns to e-mails can help bankers to sharpen their promotions, even while they are in progress. Also, because the send/response cycle is so short (we're talking a matter of hours), offers and promotions can be tested with small portions of your audience before a complete campaign rollout.

Ray Parenteau is president of ClickRSVP, a marketing partner of Integrated Loan Services.