There is hardly any doubt that email marketing still works. According to Pantea and Pop (2010) 80% of retail companies use this strategy to retain customers and reach out for new ones and following an investigation by Matt McGee (2012) 77% of consumers like to receive marketing messages via email.

According to Dave Chaffey (2018) across all industries in the UK, the open rate of marketing emails in 2017 was 24.79%, click-through rate 4.19% and the unsubscription rate 0.49%. Considering just the ‘Business and Finance’ industry sector, the open rate was at 20.79%, click-through rate 2.73% and unsubscription rate 0.23%.

(Smart Insights, 2018)

According to Fariborzi and Zahedifard (2012) the reasons for companies to follow this strategy are the advantages that come with this marketing tool. These include: Good measurability by being able to keep track of delivery rate, open rate and click-through rate, fast and efficient, easy to create and the high return on investment (Jenkins, 2009).

So considering the response statistics by Dave Chaffey and the advantages of the tool, banks should include email marketing campaigns in their digital marketing strategy. However to run an email marketing campaign successfully in this specific sector, certain aspects need to fulfilled. Besides the aspects of knowing your goal and your audience and plan the emails and follow-up on them (Hall, 2017), banks should remember the following key points specifically identified for the banking industry by Richard Cowdery (2016) to be able to engage with, inform and retain their customers:

• Mobile Access: According to a research by Litmus (2018) around 50% of emails are being read on a mobile device. This means that the emails must be suitable to the screen of smaller devices otherwise infographics, images or tables might not work well. Therefore the email must be presented mobile-friendly and should direct the reader to the landing page which can be displayed by mobile devices a lot easier.

(Litmus, 2018)

• Simplicity: The email should be kept very simple and have a single purpose to direct the reader to the landing page where the person can get more information on the product that was promoted in the email. The design should not be too complicated, a strong message is needed and a clearly visible call-to-action button must exist. According to Richard Cowdery (2016) the only exception where more information should be provided in the email is in an email newsletter or a blog summary.
• Data segmentation: Since not every customer is the same, they should not all get the same message. A bank will have to segment its data about its customers and provide each with content that is more relevant to them. Common segmentation of data include:
  • Geography – people in different location might need different products/services.
  • Product/Service – some people might be interested in loans whereas other people are interested in a savings account.
  • Stage in cycle – what stage of the buying process are the customers? Have they recently decided on a product? Are they about to order a product/service or are they completely new to the bank?
  • Behaviour – Are they using the products/services of the bank frequently

After segmenting the customer data, the bank may decide to group customers into ‘personas’ based on the segmented data.

• Personalise: The email should start with a first name personalisation and make the email sound personal to enhance their engagement with the bank. However not too much information that is known about the person should be included.
• Analysing and Optimising: To find out whether the email campaign is working, the bank needs to use analytics. Delivery rate, open rate, click-through rate and unsubscription rate must be analysed and need to be benchmarked to other data in order to judge whether it is successful. Analysing the data will help to understand where in the path people stopped and why this was the case. Maybe the content was good but the subject line was poor? Knowing that will make it easier to optimise the next email.

If these aspects are not fulfilled then there are risks involved which are namely:

• Spamming: If the email is marked as spam by the reader, then this email will be seen as ‘abuse’. The average rate of abuse in the ‘business and finance’ industry sector is 0.2% (Chaffey, 2018) which is equal to the average of all industries. Following an abuse report it can lead to the bank’s email being blacklisted. (Hudson, 2017).
• Reputation: If false or misleading information is presented in the email, then this can affect the bank’s reputation (Hudson, 2017) which can hurt the bank’s business as it operates in a highly competitive market.
• Expenses: The actual cost of an email marketing campaign might be low but the cost can wind up a lot higher if the customers judge the emails as junk and get annoyed by the emails (Fariborzi and Zahedifard, 2012). This can again affect the bank’s reputation.

Example of a good marketing campaign by Bank of Tennessee:

(Campaign Monitor, 2018)

This email is letting the customer know about a new way of depositing money. It is kept short and simple, has an attractive and uncomplicated design, is accessible on mobile devices, has a strong message and a clear call-to-action button. However it is missing the personalisation.

We can conclude that there are good reasons for a bank to include email marketing campaigns in their digital marketing strategy. Aspects specifically concerning the banking industry such as mobile access, simplicity, data segmentation, personalisation, analysis and optimisation need to be fulfilled for a an email marketing campaign in the banking industry to be successful. If these aspects are not well enough taken care off, then the bank might face the risk of its email being blacklisted because of abuse reports, the expenses of annoyed customers and the reputation being damaged.

 

References:

• Campaign Monitor (2018) Bank of Tennessee. [online] Available at: https://www.campaignmonitor.com/best-email-marketing-campaigns/announcements/bank-of-tennessee/ [Accessed 18^th March 2018]
• Chaffey, D. (2018). Email marketing statistics 2017. [online]  Smartinsights. Available at: https://www.smartinsights.com/email-marketing/email-communications-strategy/statistics-sources-for-email-marketing/ [Accessed 18^th March 2018].
• Cowdery, R. (2016) Email marketing best practices in financial services. [online] Available at: https://www.talisman.co.uk/blog/email-marketing-financial-services/ [Accessed 18^th March 2018]
• Fariborzi, E. and Zahedifard, M. (2012). E-mail Marketing: Advantages, Disadvantages and Improving Techniques.International Journal of e-Education, e-Business, e-Management and e-Learning, [online] 2(3), pp.232-235. Available at: https://s3.amazonaws.com/academia.edu.documents/38363813/116-CZ02024.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1516984482&Signature=v31fBBKDXxCQrI8E5ntq5BpMT2Q%3D&response-content-disposition=inline%3B%20filename%3DE-mail_Marketing_Advantages_Disadvantage.pdf [Accessed 18^th March 2018].
• Hall, S. (2017).How to Run a Successful Email Marketing Campaign (Step by Step). [online] OptinMonster. Available at: https://optinmonster.com/how-to-run-a-successful-email-marketing-campaign/ [Accessed 18^th March 2018].
• Jenkins, S. (2009) “The Truth about Email Marketing”. USA: FT Press, pp 2-4, pp. 104-106
• Litmus (2018) Email Client Market Share. [online] Available at: https://litmus.com/blog/the-2017-email-client-market-share-infographic [Accessed 18^th March]
• McGee, M. (2012).77 Percent Of Us Want To Get Marketing Messages Via Email & There’s No Close Second Place, Study Says. [online] Marketing Land. Available at: https://marketingland.com/77-percent-of-us-want-to-get-marketing-messages-via-email-theres-no-close-second-place-study-says-9420 [Accessed 18^th March 2018].
• Pantea, C. and Pop, N. (2010). EMAIL MARKETING CAMPAIGNS: THE EASIEST PATH FROM ORGANIZATIONS TO CONSUMERS.Annals of the University of Oradea: Economic Science, [online] 1(1), pp.737-742. Available at: http://anale.steconomiceuoradea.ro/volume/2010/n1/116.pdf [Accessed 18^th March 2018].
• Smart Insights (2018) Email marketing statistics 2017. [online] Available at: https://www.smartinsights.com/email-marketing/email-communications-strategy/statistics-sources-for-email-marketing/ [Accessed 18^th March 2018].