Brian Paulson Vice President, FIS Payment Output Solutions 800.822.6758
The payments industry is undergoing historic change due to emerging technologies, deregulation and financial market innovation. For several decades, banks controlled the payments industry, but today they face growing challenges from non-bank processors, product-focused financial services firms and major retailers. In the current, unsettled financial services environment, it s more critical than ever for financial institutions to grow deposits and increase revenues, particularly with their best clients. One of the great truisms of the business world is that it costs less to retain an existing customer than to acquire a new client particularly in today s market, where financial institutions are focused on cost containment, operational efficiency, and optimizing resources. Locking in customer loyalty, through deeper engagement and share of wallet, continues to be a critical priority for financial institutions. However, the current difficult economic climate makes finding additional investment dollars to improve cross selling a big challenge. How can financial institutions cost-effectively cross sell the most profitable products across the most dependable distribution channels to their best clients while at the same time expanding market share and earnings? TransPromo techniques combine with direct mail and e-mail for the optimum means of outreach and marketing opportunities in an increasingly digital world. A Game-Changing Communications Delivery Model TransPromo is a form of business-to-consumer direct marketing that leverages the power of personalization (oneto-one marketing) on transactional documents. The name comes from the combination of "transactional" and "promotional." Personalized messages and offers are added to must-read customer documents, such as monthly statements, invoices, policy notifications and delivery documents. Today's printing technology allows financial institutions to deliver more effective trans-promotional documents than ever before, as full color variable data printing and variable data document composition software can be deployed to match existing customers with personalized offers that are most likely to trigger a positive response. 2
TransPromo has emerged as a gamechanging communications and delivery model for every financial institution interested in designing and generating a broad array of customized documents, letters, notices, bills and statements with one-to-one marketing messages. TransPromo is disrupting traditional business models by creating personalized communications that connect with customers to promote new offerings, boost sales, increase revenue, strengthen branding, and solidify the connection between a financial institution and its valued customers. TransPromo is driven by breakthrough technology that is changing the way financial institutions conduct direct marketing and cross-sell campaigns. TransPromo techniques begin with the recognition that each customer represents a qualified cross-sell or upsell opportunity. The key is relevant, dynamic, personalized content delivered on targeted, must-read documents such as monthly statements. Combining TransPromo with Direct Mail Why does TransPromo work so well with direct mail campaigns? Because, TransPromo blends must-read documents with personalized marketing messages designed to drive cross selling. Direct mail industry statistics Customers are getting an average of 10.87 transaction documents per month TransPromo techniques will ensure yours is the one that means the most. Consumer surveys indicate a high preference for highly personalized direct mail. (PIWorld.com) 3
Sixty-nine percent of respondents prefer mail over e-mail or telemarketing. (PIWorld.com) Because 95 percent of transaction documents (such as statements) are opened and read, they provide an excellent vehicle for reaching customers with other types of messages and information. (PIWorld.com) Studies show that on average, a consumer will spend one to three minutes reviewing a bill or statement. That is how much time the marketer has to capture a recipient s attention when using the transactional document as a marketing tool. (PIWorld.com) Adding E-mail to the Equation E-mail is now a major channel for marketing and, according to industry sources, it outperforms all other media in terms of ROI. By being a highly cost-effective communications tool, it is an optimal channel to integrate into already stretched marketing budgets. When used in parallel with targeted direct mail messages, it can reinforce the message and improve response rates. The Direct Marketing Association anticipates that e-mail marketing will generate a return of $43.52 for every dollar invested in the medium in 2009. In today s challenging economy, it's more important than ever to ensure that every marketing dollar you spend can be maximized to its full potential. TransPromo marketing messages are just as easily embedded into e-mail correspondence as they are with direct mail. 3
Improving Cross-sell Ratios for Market Leadership Financial institutions are scrambling to attract retail deposits in a shrinking economy. Cross-sell ratios and brand loyalty are down, with savvy customers shopping for the best products and services available at the lowest price. These cross-sell ratios have long been key yardsticks by which financial institutions measure the success of their retail banking franchises. Cross selling increases revenues and broadens relationships while taking advantage of a financial institution s investment in a diversified product set. More importantly, increasing the number of products with a customer acts as a psychological barrier to a potential client exit. TransPromo marketing techniques become the centerpiece of your institution s direct marketing campaigns. Targeted marketing messages provide the personalized information and attention that encourage customers to entrust more of their assets to the financial institution as their needs change. TransPromo is ideal for driving adoption of many products and services. We ll examine four of them online bill payment, electronic statements, credit cards and debit card reward programs. Driving Online Bill Pay Adoption Many financial institution customers use bill pay providers other than their financial institution. TransPromo can promote the benefits of your institution s bill pay program, as well as the advantages of consolidating payments. Promoting the Adoption of Electronic Statements Printed statements are often the main points of contact between a financial institution and its customers. Statements, unlike other forms of mail, are usually opened, read, kept, and retained, making them an attractive marketing vehicle. However, with the cost of postage on the rise and with financial institutions looking for ways to reduce operational costs, including time (printing, sorting, packing) and materials costs associated with the printing of statements, there is no better time to move customers from print to electronic statements. The cost to produce and mail monthly paper statements generally exceeds $1 per statement in printing, postage and handling costs. Industry studies indicate that more and more customers are embracing electronic statements as a green alternative that benefits the environment by reducing paper consumption and waste. TransPromo can help financial institutions deliver the message of the green banking benefits of electronic statements to clients and significantly improve the adoption rate. Ironically, the best communications vehicle to market the adoption of electronic statements is the paper statement. Today s technology will allow the financial institution to create a message campaign that ensures messages and the statement flow seamlessly from paper to electronic communications. This approach is shown to ease the transition for the customer and prevent a retraction to paper. The Growing Trend of estatement Adoption According a recent Forrester Research North American Technographics Financial Services survey taken online among 5,000 consumers in the United States and Canada in May of 2008, e-statement adoption will 4
continue to grow, particularly with younger consumers likely to say no to paper statements because of environmental considerations. The Forrester survey found that financial service e-statement adoption had risen 11 percent over the past year, accounting for more than half of all statements processed. This stands in sharp contrast to the 40 percent figure recorded by a similar study back in 2006. In fact, 55 percent of those surveyed in Forrester s 2008 online survey indicated that they receive online versus paper statements for their banking, savings and/or credit card accounts. These figures point to the beginning signs of significant potential return on investment in e-statements for financial institutions. Electronic statements also encourage more active links to customer relationship endeavors, including the selling of additional banking services. TransPromo becomes the perfect complementary tool to influence buying decisions in this environment. TransPromo for Revitalizing a Credit Card Program TransPromo is ideal for turning a stagnant credit card program into a highly prized product, even in the midst of a sagging economy. An effective TransPromo campaign can be used to revitalize the credit card portfolio, with personalized communications designed to increase card applications, usage, and interchange income. TransPromo can be used to communicate with high value cardholders and communicate lower rates and better products, which can improve risk management capabilities. TransPromo can be used to promote transfer balances from high-interest accounts. TransPromo Galvanizing Rewards Programs Rewards programs have become a ubiquitous component of the consumer financial services industry, but how can you be sure they are having a positive impact and helping to create a sustainable, profitable relationship between the account holder and the financial institution? Most reward programs return sufficient income account growth and retention value to justify their substantial investments. But even greater growth and profits may result if the marketing campaign is re-framed from being program-specific to becoming brand-specific. TransPromo techniques can help financial institutions galvanize their loyalty and rewards programs to serve not just as retention tools, but to become the institution s most important competitive weapon. With consumer spending down and consumer credit contracting for the first time in decades, financial institutions can deploy a TransPromo campaign that will fundamentally change consumers' investment in their institution. TransPromo messaging can be used to enrich the range of reward offerings to appeal to specific consumer interests. 5
TransPromo messaging can relate news about new reward programs or rewards accrued as donations to charities. TransPromo messaging can help mesh the interests and identities of the bank, the brand, and the consumer to withstand a competitive onslaught by new financial services providers and channels. Optimizing the Benefits of estatements with Digital Statement Archiving Image statement creation represents the first half of e-statement equation. The complementary offering is a statement archiving and presentation solution that stores electronic statements in a digital format for quick and easy Web-based retrieval and research. Document Image Archive systems digitally store monthly statements and streamline back-office research inquiries by locating check image statements through a few short keystrokes. With the rapid growth of electronic statements, financial institutions can provide customers with faster delivery and the convenience of online storage and access to past statements and transactions. Capabilities exist to allow transaction sorting. Customers can quickly view all debit transactions, or all spending at specific retail stores. Document Image Archive offers another environmentally friendly solution as financial institutions deal with the growing public awareness around global climate change. The storage of electronic statements provides lower electrical usage and carbon output rather than handling all the paper. TransPromo Changing Client Communications TransPromo techniques are changing marketing and client communications. Financial institutions that delay looking at TransPromo adoption will risk losing out on a mountain of untapped opportunity. What everyone seems to agree on is this: TransPromo is the ideal marketing tool for any financial institution that expects to survive this tough economic environment and thrive when conditions improve. There s no upside to waiting around. Now is the time to invest in your TransPromo strategy. FIS is an industry leader in the field of TransPromo direct marketing. Our CSF software is the premier customer communications tool for more than 300 clients in diverse industries from banking and financial services to utilities and insurance. CSF Designer software has experienced particular success with targeted messages on monthly print and electronic statements for financial institutions. For more information on FIS Payment Output Solutions, call 800.822.6758 or visit us online at www.fisglobal.com. 6