White Paper Financial Services & Lifestages: Unlocking New ...€¦ · Financial Services & Lifestages: Unlocking New Success in Your Email Marketing | 2 Overview Today, it’s no

Financial Services & Lifestages: Unlocking New Success in Your Email Marketing

White Paper

Financial Services & Lifestages: Unlocking New Success in Your Email Marketing | www.responsemedia.com 2

OverviewToday, it’s no secret that implementing and maintaining an effective email

marketing strategy is absolutely necessary to financial services providers’

marketing success and ongoing business growth. However, the operative

word here is “effective.” While most financial service providers already have

this essential marketing program in place (about 95% of them), we will cite

examples of and explore reasons why the current email strategy status quo

is falling far short in terms of customer engagement.

This paper will examine in detail the potential cause behind and impact of

this lost marketing opportunity within the financial services industry and

explore the relevant research on consumer email and digital content usage,

email marketing tactics currently being used, and our recommendation on

how to maximize the value of email marketing across consumer lifestage

segments and multiple marketing channels.

Email and Financial Services Consumers

Most, if not all, research shows that today’s consumers rely heavily on the

internet for information when doing research on financial services and

products. In particular, financial services customers prefer email as their

number one method of learning about new products and services, and

the correlation is growing stronger every year. For example, over a third of

financial services customers preferred email in late 2013, and a September

2015 study almost two years later shows that customers still prefer email


and even more overwhelmingly so. In a related study, half of all smartphone

owners in the United States (don’t forget - that’s the great majority of people

between the ages of 18 and 54) want to have an email sent to them in regard

to new financial products, such as mobile wallet offers.

However, not all consumers are alike when it comes to consuming financial

information. According to an AOL survey conducted in November 2015,

one-third of online Millennials in particular watch videos on financial news,

recommend services to others, or make financial decisions based in part

on an article or blog post they read. The same survey showed that these

respondents were regularly checking their balances and monitoring financial

asset performance online (77% and 37%, respectively). Still, even though they

are consuming video content and relying on word of mouth for information,

when it comes to communication from financial services institutions

themselves, 59% of Millennials prefer it to be through email.

Source: Mintel


Generally speaking, financial services customers are digitally active and

receptive to digital marketing communications from their institutions, and

the research shows that email is a safe bet when it comes to their contact

method of choice.

Is Our Email Marketing Working?This is not an easy “yes” or “no” answer – more of a “sort of.” As mentioned

above, at the bare minimum, almost all financial service providers are using

email, and that’s a great start. Better yet, the industry even has some pretty

strong results to show for it. Movable Ink published a report in late 2014 that

revealed financial services as a leading industry whose customers spent

the most time reading marketing emails, with 50% of readers spending 15+

seconds doing so. Financial service providers also enjoy some of the highest

open rates (38-48%) across all industry verticals, though one could argue

that this is a byproduct of the higher importance of financial transactions

and related email to customers.

Additionally, customers inherently trust financial services brands more than

those in other industries. In fact, Vision Critical reports that 9 out of 10 adults

(18+) surveyed said they have trusted at least one financial services brand

in the past 12 months, which is greater than any other industry. These are all

excellent indicators of success…until you consider what happens after these

openers and readers are done opening and reading.


2What’s Happening After We Send the Email?Looking deeper into a recent Epsilon study on email marketing metrics, we

found a surprising and possibly alarming insight regarding financial services

email marketing results versus other industries. Using other industries as

an example, it would be reasonable to assume that with higher open rates

would come higher (or certainly at least comparable) click rates. Yet financial

services providers’ click-to-open rate (CTOR) metrics are not achieving the

same level of results. In fact, they are actually much lower.

Click-to-open vs. Click-throughWhen evaluating the effectiveness of their email marketing campaigns,

financial services providers have historically relied on a few standard metrics

such as deliverability, bounce rate, open rate, and click-through rate (CTR).

But CTOR is one key metric many financial services providers are overlooking.

CTOR measures the relevancy and context of an email by telling you how

many consumers who actually opened the email clicked through. To more

clearly demonstrate this, it’s important to understand the difference between

CTR and CTOR. One is not universally more telling or important than the

other, but in the context of this conversation, CTOR is more relevant. CTR is a

measure of clicks from all emails delivered, but CTOR takes into account only

clicks from emails that were opened, i.e., whether customers engaged with

content in the email after opening.


8.2%Credit Card & Banks CTOR of

is less than half of that found with CPG emails

13.1%overall industry CTOR average

The data shows that although the financial services industry enjoys a significantly higher open rate than other industries, as

much as 200% higher, its click-to-open rate is falling far short. For example, the Credit Card & Banks CTOR of 8.2% is less

than half of that found with CPG emails and 37% less than the overall industry average of 13.1%. Despite high open rates,

the financial services industry is failing at getting customers to follow through and engage with their email content, which

illustrates both a major challenge and opportunity for the financial services providers who address it.

37%less than the overall industry average

Financial Services Industry


So Why Is Our Email Not Resonating?

One reason behind this discrepancy in email relevancy and

engagement is illustrated in a January 2016 study from

Mintel on Lifestage Marketing in Financial Services. The

study examines by generation, age, marital status, and

parental status the differences in how people get their

financial information and the media channels most likely to

elicit a response. Two of the key findings include:

• Different generations use different media channels for

financial information

• Younger generations are getting their financial

information from a wider variety of media channels than

older generations

For example, Millennials are utilizing to a greater degree

social media, video, and TV to educate themselves than,

say, Baby Boomers who are accessing traditional financial

advisors for their needs. It also showed that Millennial

women are harder to reach digitally than Millennial men.

And regarding targeting Hispanics and African Americans,

the same research shows that the former are easier to

reach, both male and female, due to their usage of a greater

variety of media, and the latter are more easily reached

through television, as they are less likely to use any medium

for financial information than anybody else.


Our key takeaway from the Mintel study is the fact that different generations

of consumers rely on a differing combination of sources of financial

information, making it imperative that financial services providers carefully

deploy and integrate email among their other consumer marketing channels

and touchpoints. Additionally, financial services providers must strategically

design their email content first to meet the unique needs of each lifestage

audience segment and second to support and enhance their content across

all sources of information.

Based on this research, we believe the financial services industry as a whole

is failing to take this more nuanced and strategic approach in their email

marketing efforts and is instead relying on a dated mass media strategy of

sending blanket email messages that may not reach the intended audience,

and the email is not used in the manner intended. This in turn causes the


resulting low CTOR results versus other industries that are fully utilizing

lifestage-based email strategies and achieving greater levels of email

relevancy with their customers.

How to Turn This Challenge into Email Success

Making the most out of your financial services email marketing requires a

change in perspective. The goal should not be just to use email as a primary

communications channel but also as a supporting channel based on your

campaign objectives and your customers’ lifestage segments.

To accomplish this, you first have to identify and tag your customer email list

into the appropriate lifestage segments using existing file data, appended

data, and/or behavioral data. During this process, including and correlating

any additional information you have on your customers should be a priority,

as it will give you more granularity and allow for more precise targeting.

Once you have your in-house files updated and in order, you can implement

a series of email tests to ascertain the right mix of both primary email

communications and secondary or supporting email communications to

achieve your specific goals.

For example, the Mintel study shows that Millennials and the younger iGens

are gleaning financial information through more modern forms of marketing,

such as social media and word of mouth or “friends and family.” As a result,

financial service providers could target these lifestage segments with

relevant refer-a-friend program tests, each supported with robust email

marketing campaigns. This strategy effectively leverages unique lifestage

“Making the most out of your financial services email marketing requires a change in perspective.”


behaviors by introducing young people to new products and services via word of mouth while simultaneously

strengthening the relationship with the existing customer. Email, in this case, acts as an integrated supporting channel

rather than a primary educational channel.

In contrast, sending this same “refer a friend” email to the older Baby Boomer audience would fall flat as the Mintel study

showed they prefer sourcing financial information more directly from a financial advisor. Here, a savvy financial services

provider could deploy a series of educational email tests that dynamically add the appropriate advisor’s name, picture,

and contact info and achieve much greater results over time.

We haven’t forgotten about Generation X, either. Along with Millennials, they show the strongest interest in accessing

financial services information through video content. A smart financial services provider could deploy emails tests to this

audience with enhanced call-outs to video links and video-enabled landing pages. By measuring the video engagement

and usage patterns across the tests, you can then identify the optimal video content for larger scale email deployments

and success with this audience.


These are just a few examples of how lifestage strategies can be leveraged

for greater levels of email marketing success. However, the general

messaging and content of your emails is only the beginning of what you

can customize according to lifestage. What about the imagery used in your

emails? Do you think different hero images would appeal to customers at

different lifestages? These are practical elements to test and determine the

effect. You can do the same with any and all aspects of your emails. You

can test different subject line and preheader copy to see what resonates

with customers at different lifestages to optimize your open rates. Perhaps

some age groups would prefer seeing different parts of your email higher or

lower on the screen, or perhaps customers in later lifestages would prefer if

the font size in your emails were increased and the text thus easier to read.

You can test all of these and more, and once you determine your customer’s

preferences based on lifestage, you can reformat your emails to render

accordingly by default.

The potential for customization and personalization in your emails is limited

only by the robustness of your data and your willingness to experiment and

test. This is where being able to tie related customer data into your email

list really pays off. For example, is there a difference between single versus

married Millennials in their email preferences? What about between Baby

Boomers with grandchildren versus no grandchildren? The possibilities for

testing, customizing, and improving your emails according to lifestage are

endless.


Parting Thoughts

The rapid expansion of media channels has changed the way we access

financial information. People of every generation and lifestage utilize

different combinations of media to get the information they want. While

email marketing by itself can be expected to deliver a consistent level of

success, financial services institutions have an enormous opportunity to

develop new integrated email marketing strategies that are finely tuned to

their customers’ lifestages and generate significantly higher ROI. At the end

of the day, your holistic email marketing strategy has to ensure that you’re

spending time and resources on the right channels and targeting the right

people within them.

Alex OravitzBusiness Development Manager

Alex’s daily focus at Response Media is on business development, researching prospects and determining opportunities to help brands and organizations acquire new customers and grow their businesses. To support business development efforts, he also co-manages the agency’s content marketing program, helping to provide reliable industry insights to prospective clients and further drive inbound leads.

Doug BreuerChief Operating Officer

With 25 years of business management and marketing experience as an entrepreneur, consultant and senior-level executive, Doug has worked with a diverse range of world-class clients – including Procter & Gamble, IBM, The Home Depot, AT&T and Nokia – across numerous industries. He currently oversees Response Media’s operations, financial systems, human resources and marketing disciplines. Previously, Doug served as a partner and director of Ketchum, Atlanta, overseeing the Technology, Consumer Brand, Healthcare, and Interactive Services practice groups. He has also held executive positions in the fields of technology marketing and software development.

Authors

Quentin BlasingameDeveloper

Quentin’s work at Response Media includes managing email marketing programs as well as front-end development for both emails and landing pages. He also manages Response Media’s content marketing efforts and administrates the agency web site. Prior to joining Response Media, Quentin was part of a major publisher’s digital ad operations team and has been part of web development teams for various corporations, universities, and government agencies in both the United States and Canada.

Alex Oravitz

Business Development Manager

[email protected]

(770) 220-5064

3155 Medlock Bridge Rd.,

Atlanta, GA 30071

P: 770.451.5478

responsemedia.com

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White Paper Financial Services & Lifestages: Unlocking New ...€¦ · Financial Services & Lifestages: Unlocking New Success in Your Email Marketing | 2 Overview Today, it’s no