Engaging Financial Customers via

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1 Engaging Financial Customers via Financial Institution Metrics Report Is your program engaging customers to stay in touch with you? How do you measure engagement and leverage it for breakthrough results? This report provides insights and opportunities to maximize the most important channel in your digital strategy.

2 SUMMARY: This study measured more than 11,500 campaigns from 102 banks and credit unions over a 13-month period. The goal was to measure the degree to which customers engaged with their financial institution s messages. The results show above-average levels of subscriber engagement, while identifying potential strategies and opportunities for growth and success. Introduction With s continued effectiveness in the digital marketing spectrum, every month seems to bring a new study from vendors, industry groups and analysts. While these are useful in promoting in general, most studies include boarder definitions of financial services and they tend to feature larger scale programs than found with most financial institutions. As an industry-specific provider, ClickRSVP also regularly releases its Metrics Report for Financial Institutions, which provides deeper insight on what happens specifically with bank and credit union programs. For 2015, we opted for a different set of metrics that would help answer the question: How well do financial institutions engage with their customers via ? Therefore, this year s study looks at cumulative statistics to take a deeper dive at how drives Customer Engagement in this age of digital domination. Sure, open rates and click ratios are important, but is also a long-term, customer retention channel. How your customers interact with your s over the long run is just as important as how well individual campaigns perform. Study Components Our study this year includes messages and campaigns sent from 102 institutions over 13 months (August 2014 August 2015). The 13 th month adds some Year-over-Year metrics. Campaign activity was bucketed into three segments: - Low: 4-12 sends per year - Medium: sends per year) - High: more than 52 sends per year (these include automated and recurring operations messages such e-statement notices, onboarding series, etc.) ClickRSVP Page 1

3 What Cumulative Data Reveals metrics tend to aggregate vertical activity: that is, how do individual campaigns measure against each other? What s the average open and click rate? For most sophisticated marketers, typical direct response data such as order value and campaign ROI (Return on Investment) are also key numbers to track. Aggregating individual campaigns can provide a glimpse of this information. However, a longitudinal view of activity over time offers some new and surprising insights about subscriber behavior. Our process was to count every unique subscriber that either opened a message and/or clicked on a link, over a period of 13 months. This enabled us to identify subscribers that not only engaged with their bank / credit union, but also did so in varying degrees. Given that many clients use a combination of broad topical content, as well as targeted lists, looking back over a 13-month span provided a holistic view of the overall program over time, as different campaigns reached various customer segments. Of course, the caveat is that, with any aggregated statistics, the individual outcomes vary within the group. So, while the following metrics provide some insight for this particular group, individual institutions all experienced some variance over the mean. In other words: your mileage may vary. KEY FINDINGS The Importance of Engagement While there are plenty of tips on how to increase or retain engagement (we ll get to that later), most don t address the benefits of higher engagement. From the technical side, higher subscriber engagement propagates higher inbox delivery and, thus, potentially still higher engagement. ISPs (Internet Service Providers) are gradually implementing algorithms that triage incoming messages according to how recipients have interacted with the sender in the past. Senders whose messages that are repeatedly deleted without reading will eventually find themselves with a lower sender reputation - which means lower inbox placement. Gmail, has led the way with its tabbed inbox that categorizes incoming according to its content, intent and recipient preferences. Others are following that lead. And mobile users have access to dozens of apps to organize and better handle volume. Making sure you remain -engaged will go a long way towards staying digitally connected with your customer. And that can be crucial for time-sensitive notifications such as fraud and system alerts, weather closings and the like. ClickRSVP Page 2

4 Defining Engagement From the marketing and branding side, every positive impression you make with your customers is a plus. When your customer sees you in their inbox, and recognizes your brand, and is drawn in to open the message (by the nature and timing of the subject line), you ve connected, if even for a few seconds. At the granular level, engagement is typically broken down into three segments: Scan / Delete: < 2 seconds Skim: 3-7 seconds Read: 8-15 seconds Source: ClickRSVP / on Acid Post-open engagement breakdowns will vary based on accuracy of targeting, timing, the attractiveness of the subject line and other variables. (That s a topic unto itself to be covered in future studies.) The key takeaway is that, given the further dilution of active engagement that happens once an is opened it becomes vitally important to maintain consistently solid open rates, while retaining the highest number of active subscribers. Engagement Leads to Conversion The next step beyond the Scan / Skim / Read distribution is engaging recipients with a Call-to- Action (CTA), or a click-through. This will typically (and ideally) lead to a website or landing page where the conversion process begins. This may take the form of more information, a pure call to action ( Click Here to Enroll in e-statements ), or a lead nurturing process where the conversation shifts towards closing the sale. Either way, the higher the engagement level, the more opportunity there is to deliver a Call to Action. CTA's Click Link Visit Website Visit Branch Call Center Conversion Nurtutre Convert Onboard Re-engage ClickRSVP Page 3

5 frequency increases engagement - but only to a point. As the chart shows, increasing message frequency from quarterly/monthly to times per year has the most impact on engagement. While this is somewhat predictable, the longitudinal approach measures incremental engagement of unique subscribers. Interestingly, opens and clicks remain steady even as frequency increases to hundreds of messages per year. An increase in opens corresponds with an exponential increase in click-through activity. This chart demonstrates how open rates grow cumulatively over time, with an average increase of +77% Year over Year. At the same time, these institutions experience a proportionately higher increase in click-through activity % Year over Year. The lesson here: engagement breeds more engagement. Combine that with optimized frequency, and you have the foundation for success. More than half of subscribers have opened at least three messages during the period. While 30% of active subscribers have viewed only one message during the period, more than half (52%) have opened at least three messages, and 26% have opened at least six messages. ClickRSVP Page 4

6 One-third of active subscribers have clicked on at least two messages during the year. This chart shows the distribution of clickthrough activity. While the majority (67%) has clicked-through only once, one-third has recorded at least two separate click-throughs over the period. This presents an additional opportunity to profile and segment subscribers by how much they interact with your messages. 75% of the institutions in the study have engagement / open rates of more than 50%. Although this number is higher than typical campaign open rates it should be. And it support the often-repeated mantra that remains the favorite marketing channel for financial institution customers. Modeling Your Database Using a distribution profile can help you quantify and segment the engagement level of your subscribers. This can help you identify the most productive segments for promotions, as well as those that need some extra TLC to bring up their engagement. The accompanying chart shows the distribution of averages for both opens and click-throughs. By measuring and monitoring these statistics over time (at least annually), you can track the effectiveness of changes to program elements such as frequency, content track, segmentation and other profile elements. What It Means Most metrics focus on direct response-type campaign performance. This doesn t always work for financial institutions, as accurate sales attribution can be difficult. However, by using proven techniques such as segmentation, testing, and conversion tracking, s role in generating and supporting marketing ROI can be enhanced and made even more accountable. It all starts with having an engaged subscriber audience. ClickRSVP Page 5

7 What You Can Do Prepare an calendar. This can be based on informational content, planned promotions, scheduled events and seasonality. Study your upcoming marketing plan and incorporate into promotions where appropriate. For content, look to your website for repurposing material such as financial tips. (Note: using teasers and links to specific web pages is also a great way to identify customers interests while building website traffic.) Don t over-promote. Use a blend of informational, educational and other nonpromotional messages as part of your calendar. A good rule of thumb ratio is one promotional for every three or four messages. That s not to say you can t promote a service within a newsletter, but that should be reserved for general type promotions. Prepare Ready-to-Go templates for non-marketing communications. These include alerts and other operational messages. They should be simple and reflect only the business at hand. This is not the time to try and cross-sell. Important messages like these help to build trust. Always welcome new customers via - even if you use other onboarding processes. This helps you identify undeliverable addresses, sets expectation and starts the dialogue. Use automation to facilitate frequency, but include processes for targeting, as well as updating statuses such as delivery (bounce-outs) and No Longer Qualified (NLQ). Test: subject lines, offers, other variables are easy and quick to test with . For example, plan a few extra days in your promotion schedule to test subject line open rates and roll out the winner after 24 hours. Activate your dormant subscribers. This may entail some research as to source, date enrolled, product usage and send history. By treating this subset differently with interesting subject lines, special offers or engaging content, you ll add leverage to your program. Target with precision. Don t send product offers to customers who already have that product. This may sound like a no-brainer (it is), but the fastest way to get someone to opt-out and treat your messages as spam is to send them something that says You re my customer but I don t know you. Batch and blast won t cut it for long in an already cluttered inbox. The beauty of is that it s scalable in both directions; small, qualified numbers can bring big results. One client targeted some 3,000 customers for an exclusive home equity campaign and brought in $1.5 million in new loan volume. Use your data intelligence to improve your chances. Measure ROI by sourcing your new accounts and connecting the dots. Use Google Analytics, response tracking or list matching to identify and quantify who responded and actually generated new business. ClickRSVP is a full-service provider specializing in working with financial institutions for more than 15 years. This study is part of a continuing series of insights applicable to bank and credit union marketing. ClickRSVP Page 6