It's Time to Require Email Addresses as Part of Account Opening Process

I have been in banking long enough to remember the roadblocks that stood in the way of collecting birth dates from customers before the government required this information as part of the customer account file. New account representatives complained that collecting the information was intrusive and impacted the privacy of the customer even though the information was already collected as part of other financial institution transactions (insurance and investments). Once the government required collection of this insight, the barriers came down overnight and marketers were immediately armed with an important tool in modeling households and targeting messages.

While it is doubtful that the government will ever mandate the collection of email addresses, now is the time to add this to the information your bank requires as part of the new account opening process. While some people won't have an email address to provide, this communication option is beneficial for both the customer and the bank.


With an email address on file, the customer can be informed immediately if there is potential fraud or identity theft on their account. They can also be informed of special offers and can help reduce the environmental impact of postal mail.

From the bank's perspective, the cost of mandatory and promotional communication is reduced immediately, while the ability to react to time sensitive opportunities and threats is enhanced. For instance, there is a western bank that can communicate with up to 60% of their customer base right after financial results are released, answering any questions that may be of concern. They can also immediately respond to competitive opportunities ranging from rate changes to mergers and acquisitions.

I am aware of at least two large financial institutions that are now requiring the collection of email addresses from customers with minimal negative impact. In fact, since communication includes community announcements and financial education opportunities, the opt-out rate on email is minimal.

The ability to collect (and effectively use) customer email addresses is already a competitive differentiator for some progressive institutions. How long will it take for other banks to catch up?

Comparing Results to Industry Norms

I am frequently asked about what response rate a client should expect based on 'industry standards' or results from similar programs at other financial institutions. While the DMA does compile statistics and reports on direct marketing response rates with their Response Rate Trends Report, and there are other tools available from alternative sources such as MarketingSherpa, there are significant flaws to using general standards or even the results from another bank's program as a guide for setting expectations.

It is difficult to find comparable benchmark results since you will need to find programs with the same or similar:

• Target audience
• Product features and benefits
• Offer
• Channel mix (were there other marketing channels used to support the program)
• Timing (not only to reflect seasonality, but overall environment conditions at the time of the program)
• Brand strength
• Competition

After more than 30 years of marketing services experience within the banking industry, I have found that the best benchmark against which you can measure the success of a current or future campaign is the results from previous programs at your financial institution. While the timing of the previous program may be different, far more of the variables described above stay the same. Sometimes developing this benchmark may require analyzing a program that had not been previously measured, but this guidepost will be far more accurate than an industry or competitor result.

Banks Can Accelerate Revenue Growth by Managing Digital Experience

According to the March issue of the McKinsey Quarterly, digital channels can assist companies in unifying the customer experience and help move customers from interest to loyalty. In the article, "Four Ways to Get More Value From Digital Marketing", David C. Edelman discusses how companies can increase revenues through a better coordination of the digital end-to-end experience (see exhibit).

By focusing on the capture of a larger amount of Internet traffic through improved mass media key word positioning and SEO, increasing customer engagement through easy to navigate sites and targeted messaging, converting more of the digital leads to sales with strong offers and building digital loyalty through online and offline channels, revenues can be optimized.

The article discusses how marketing investments need to be proportional to the influence they will have on the consumer's purchasing decision. But any shift in investment will only yield results if the channels are integrated and coordinated and if the appropriate metrics are established linking investment to performance. This may require marketers to move out of their comfort zone and to step back from tactical, day-to-day execution and take a more strategic view of where to invest and make changes.

Ten Steps to Onboarding Success

Later today, I am presenting at the Oregon Bankers Association 105th Anniversary Convention at Sunriver Resort on the topic, Stemming Attrition and Building Relationships Through Effective Onboarding.

In addition to sharing recent statistics from J.D. Power and Associates around the positive impact of increased attention early in a new relationship and the positive impact of using multiple communication channels from case studies across the banking industry, I will be sharing the ten key steps to onboarding success that I have seen over the past five years.


These ten steps are:

1. Acquire the right customers: The most important component of a successful onboarding program is to acquire customers that have a greater liklihood of future value based on modeling and geographic targeting.
2. Communicate early and often: The sooner you can build dialogue with the customer and the more often you can connect in the first 90 days, the more successful you will be in retaining and building relationships.
3. Integrate across multiple channels: Reaching out to the new customer using phone, direct mail, email and personal 1:1 communication will greatly improve the success of an onboarding program. We have seen lifts of 25-50% when multiple channels are used.
4. Build in learning from day one: An onboarding program should not run on auto pilot. The competitive environment, customer behaviors and transaction trends change all the time. Your onboarding program also needs to adjust on a dynamic basis.
5. Engagement is key: Cross-selling the new customer should not begin until after you encourage engagement with the new account. This can include direct deposit, online banking and bill payment, autosave, credit utilization, debit/credit card utilization, etc.
6. Build a cadence of communication: A successful onboarding program uses a sequence of communication to improve the customer experience by helping the customer understand their new account, get to know the bank brand and eventually build trust and a stronger relationship.
7. Develop personalized offers: Once the customer has demonstrated a satisfactory level of engagement with their new account, offers targeted to the specific needs of the customer should be communicated.
8. Use a test and learn mentality: Testing should always be done with an onboarding program to determine the right offers, timing, channels and cadence for each customer segment.
9. Measure results: Results should be measured consistently against a control group. Common metrics include changes in attrition, engagement, cross-selling, balances and satisfaction on both a customer and household basis.
10. Provide a single point of responsibility: Since most banks do not have Directors of Cross-Selling or VP of Retention, it is important to assign the onboarding process to a single person who will 'own' the development and impact of the onboarding process. This person will work with segments, product managers and marketing teams to ensure the success of your program.

There has never been a more important time to develop a successful onboarding program. With fee income being attacked by Reg E and net interest margins at historical low levels, it is imperative that financial organizations attract and keep customers with the highest potential lifetime value.