Insight Center ARCHIVES

Industry knowledge to help you grow your business

2007 1st Quarter:

Not on the E-mail Bandwagon?

What are you waiting for?

Reach your best accountholders with three little words: “You’ve Got Mail”

Harland Email LogoIt’s a situation that strikes without warning: Your institution is alerted to a security breach involving the sales transactions of a major retail chain. As a result, the debit cards of many of your accountholders may have been compromised. Notifying them quickly and efficiently is paramount.

“This is a perfect case for including e-mail in the communications mix,” said Mary Beth Wilcher, chief marketing officer at Erie Federal Credit Union in Erie, Pa., and a Harland e-mail client. “Putting a paper alert in an envelope and into the mail is important, but it’s slow. E-mail lets us reach everyone within 24 hours.” Harland’s e-mail service enables Erie to quickly and inexpensively reach members not only with security alerts, but also with promotions and other marketing messages.

Yet the majority of banks and credit unions—particularly smaller local ones—simply do not realize the power and flexibility of e-mail as a vehicle for reaching accountholders, according to Dale Kaasa, strategic advisor for Harland Marketing Services. “It’s a tremendous product with an untold story,” he said. Of some 45 financial institutions attending an e-mail marketing workshop hosted by Harland in 2006, only two were actively using email. Although most large national financial institutions have e-mail programs in place for marketing and communications, there are three reasons the rest of the industry has been slow to hop on the bandwagon, according to Kaasa.

If it ain’t broke, don’t fix it: Many institutions are satisfied with their current communication efforts and do not see a need to change or diversify. “That mind set is somewhat short-sighted,” Kaasa said. “Competition is always lurking around the corner, and it’s vital to be prepared by periodically reevaluating your marketing vehicles.”

Email Accountholders ChartWe don’t have everyone’s e-mail address: Typically, financial institutions only have e-mail addresses for a quarter to one-third of their customers, according to Kaasa. “That may be a small segment, but it’s a valuable one. Most financial institutions don’t realize just how much weight those accountholders carry,” he said. A December 2005 analysis of nearly 200,000 members of four credit unions in Minnesota, Tennessee, Michigan and California compared the 27.6 percent with an e-mail address to those without. The e-mail group generated 39 percent of all loans and more than 35 percent of total profit. (141 percent and 127 percent higher performances respectively.) Furthermore, they were more likely to have checking accounts (83 percent versus 60 percent) as well as at least two deposit products (81 percent versus 60 percent).1

Incentive campaigns can help boost the number of addresses on file. “Our staff gets paid for capturing members’ e-mails,” said Wilcher at Erie. Over at Heritage Federal Credit Union in Newburgh, Ind., marketing director Lisa Toelle agrees. “We had quarterly drawings that members could enter when they gave us permission to contact them via e-mail, phone or both. We’ve also offered incentives to employees to encourage them to ask for the e-mail addresses,” she said. Using Harland e-mail, she produces a monthly electronic newsletter, eNews, which encourages members to access the credit union’s web site. “Within the past year, we’ve greatly increased our newsletter’s distribution.”

Complying with security regulations is too time-consuming: “This is one of the major reasons smaller institutions shy away from e-mail,” Kaasa said. Regardless of size, banks and credit unions must comply with the regulations stipulated in the Gramm-Leach-Bliley Act, that ensure the privacy of an individual’s financial data in e-mails. This holds whether they manage their e-mail campaign internally or via an outside e-mail service provider (ESP). Likewise, the CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act) establishes requirements for all commercial e-mail, penalizes spammers, and gives recipients the right to opt-out.

In general, all but the largest banks may find this difficult to administer in-house. “Credit unions and community banks need to feel confident that an external vendor is knowledgeable and compliant in these matters,” said Kaasa, who runs Harland’s e-mail marketing program. “There are dozens of ESPs out there, but few focus exclusively on the financial services industry.”

It’s All About Results

Harland utilizes a cutting-edge e-mail application that financial institutions can count on to handle several key issues, among them data management and tracking.

Data management ensures that lists are “clean” and up-to-date, reducing costs and assisting in regulatory compliance. Clients receive versatile tracking reports, which include the number of e-mails mailed, delivered and undelivered as well as the number of opens, clicks, opt-outs and replies.

“What makes tracking so powerful is that you can determine who took what action,” Kaasa explained. “Our clients can see who clicked on a specific link, allowing for follow-up. For example, if an e-mail included an article on building a deck, everyone who clicks on that link can be targeted for a home equity product solicitation.”

Finally, banks and credit unions may underestimate the need to test the deliverability of an e-mail. “No matter how good your e-mail is, it’s useless if it doesn’t get into the right inbox or if the design of the e-mail doesn’t accommodate blocked images or changes in the way different computers format text,” Kaasa said. “Like the tree falling in the proverbial empty forest, nobody will notice.”

Deliverability is one of the factors affecting the success of e-mail campaigns. A recent e-mail from Heritage to its members had an “open rate” (how many people actually opened the e-mail divided by the number of e-mails delivered) of nearly 49 percent, more than twice the financial services industry average of 23 percent,2 according to Kaasa. The higher the open rate, the lower the overall cost to communicate per individual.

Keys to Effective E-mail

Any bank or credit union considering an e-mail campaign must keep in mind two maxims: (1) content is king and (2) the subject line must accurately reflect the message. But even more important is the “From” line, as people generally open e-mail only if they know it’s from someone who delivers something of value. “When we send e-mails on behalf of a client, we can ensure that the ‘From’ line shows a local branch or a specific department,” Kaasa said. “It makes the sender more relevant to the recipient.”

More information on e-mail campaigns is available from the Direct Marketing Association’s E-Mail Marketing Council (EMC), formerly known as the Council for Responsible E-Mail (, from Harland’s E-mail Solution Web page ( and by contacting Dale Kaasa at (800) 607-2435, extension 7252 or

“The biggest mistake financial institutions make regarding e-mail,” Kaasa said, “is simply not using it.”

1 Harland Research, E-mail vs. Non-E-mail Accountholder Analysis, January 2006
2 Bronto Soft ware Industry E-mail Statistics, (February 2007)