Email marketing and customer retention in the financial services industry
Brands that leverage email marketing will continue to build lasting customer relationships while thwarting the new fintech players from capturing market share.
It was surprising to learn that more than two in five financial services customers say they rarely or never receive relevant marketing communications from financial services companies they’ve used before or are currently using, according to a new Yes Marketing study.
Additionally, nearly a quarter (22%) of consumers say they hear from companies across channels including email, SMS, push notifications, social media and display ads too frequently, while 8% say they do not hear from companies on those same channels often enough. In the “too frequent” group, the GenZers (18-21 year-olds) were most likely across almost all channels to report brands communicated with them too frequently.
As fintech brands like Venmo, Stripe, Square, CashApp, etc. grow more popular with consumers and niche institutions (e.g., investment firms, credit unions, etc.) expand their services and offerings, the pressure is on for all financial services companies to improve communications strategies with current customers.
How financial institutions can use email marketing to improve customer retention
Across industries, leading companies recognize the importance of customer retention and continue to invest heavily and the financial services sector this is no different. However, retention in the space is now tougher to maintain as customers encounter more options than ever in the financial marketplace.
On the plus side, the same Yes Marketing study found that 72% of customers say they are not considering switching to a new financial services company — a number that seems high on face value. However, when you consider the significant amount of research and processes that go into switching banks or other financial services companies, it’s shocking that 27% of consumers are considering jumping ship.
Brands that leverage email marketing properly will continue to build lasting customer relationships while thwarting the new fintech players from capturing market share. Here are four ways top brands are improving customer retention with email today.
1. Incorporate educational content
You’re probably already using email marketing to communicate with customers, but be careful about using email to self-promote. Instead, create educational content that indirectly relates to your offerings and positions your company as a valuable resource for financial advice.
For instance, you could offer budget tips, guides to paying off student loans, or timelines for saving for retirement. Fidelity, for example, provides customers with an interactive timeline that projects how much money they would save by adjusting their 401k contributions. Also, Capital One provides a “Learning Center” with answers to common questions customers may have.
2. Personalize email messages based on age
In the financial services industry, a consumer’s age significantly influences the services and information he or she needs. Use smart tools and dynamic content modules to deliver the right content to your customers as they reach certain ages. For instance, a 30-year-old might be interested in content about how to save for buying his or her first home. Relevant content based on age builds trust among customers and keeps them coming back for more content and services.
It’s also important to remember that consumers’ financial situations change significantly as they age. Life changes, such as a new job, a marriage or a changing family situation, directly impact the offerings a consumer needs from his or her financial services provider. Companies should embrace customer lifecycle and journey mapping strategies to ensure they understand when consumers are likely to change institutions and use that as an opportunity to re-engage.
3. Be convenient
Convenience is a major factor in consumers’ decisions to engage with any brand or organization — and financial services companies are no exception. Using a bank or financial institution should be an easy part of everyday life for consumers. If it’s not, they’ll switch to a provider that offers greater convenience.
What does this have to do with email? Financial brands can use email to not only communicate convenient offerings (e.g., easy cash transfers using PayPal or Zelle) but also to keep customers up to date with the status of their accounts so they don’t have to log in elsewhere, switch apps or call their bank for updates. Venmo, for instance, sends emails after a customer sends or receives money, with a link to easily access the transaction within the app.
4. Show you care about their preferences
One way to keep customers around is by showing that you truly care about what they want from your company when it comes to marketing communications. Consumers don’t want to feel like a number, and asking about their individual preferences gives them the VIP treatment.
Use preference centers to directly ask customers how frequently they want to hear from you, their interests, financial goals, upcoming life events, and/or on which channels they want to interact with your company — whether by email, text messages, your app or through other channels.
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