Targeted E-mail: A Case in Point: Page 2
Quris ramped up informative e-mail products as they took over from the other service providers. In April 2000 the first of these were sent after careful design and testing recalls Funk. "The first launch was in April of 2000. We sent four products that were similar in content with the smallest populations, 30,000 to 40,000 subscribers. New products were added in the summer of 2000 with another dozen since."
In 2001 a special product was added to inform customers of when the equity rankings in any holding of their portfolio drop. Alerts with triggers immediately kick in and the e-mail is generated. These reports are integrated with other channels so that the branches serving the customers are aware of the downgrade alert.
Nail points to the upside and value to both Schwab and their customer. "In financial services, the customer asks, 'whom am I going to trust in these difficult times?' Schwab demonstrated that they really are doing something new and different to help." The relationship has been one that has steadily evolved, with Quris handling most everything initially, then some being handed off back to Schwab as explained by Raneri. "Initially Quris did secure e-mail and then we brought it in-house. We let them go through all of the pain of the early stage development and get the kinks out of it. Quris stays a few steps ahead of us on the leading edge of technology. We let them do all of R&D (research and development) as when you are sending millions messages, changes to the system can impact performance."
A system is in place for incoming e-mail replies to messages as explained by Raneri. "We have a sophisticated system that handles replies. The inbound system essentially reads the inbound e-mail with sophisticated algorithms and categorizes them. It is then put into a queue for the most appropriate representative to answer it."
The targeted permission-based e-mail program has been very successful and now serves over 1.6 million subscribers with a monthly unsubscribe rate of less than one percent. An increased understanding of the customer has benefited Schwab, according to Raneri. "We have been able to understand customer behavior by tracking these e-mails. We have become more intelligent on how to bundle the e-mails and keep open rates and readership high. We also have been able to understand not only what clients want from the e-mail but also where they go from the e-mail on the Web site. This has helped us to improve design of the Web site to guide clients down relevant paths."
Nail imparts the wisdom of truly understanding the shift in consumer attitudes and the impact on e-mail marketing. "The danger is in the changing definition of spam. Consumers are defining spam as anything that they are not interested in. Permission does not any longer mean that it is not spam. We asked a series of questions about attitudes towards e-mail. In the last four years we have seen every attitude deteriorate dramatically." This is illustrated in the figure below from the March 2003 Forrester Research report surveying 9,788 American and Canadian respondents, "Media & Marketing North America: Consumer Technographics Data Overview."
The e-mail efforts have had a very positive effect says Raneri. "By having customers subscribe to one or more e-mail alert products, we increase the net profitability of net user customers by over thirty percent. That pertains to customer revenue in trading and assets as well as reduction in attrition." Within that statistic is the savings from the lessening of phone calls. "We have been able to eliminate a number of phone calls that cost between five and ten dollars per call. We have reduced the news type calls by half." With the huge number of Schwab subscribers, that is not chump change.
The progressive and successful utilization of targeted e-mail has demonstrated the effectiveness of the new medium in a way that offers lessons to be learned according to Nail. "It is not about having a million names on a list because there are a million individuals in there. It is about understanding consumers in a much more granular way. For traditional marketers that are used to one message, one ad, they have a lot of learning to do. If you don't build a strong relationship with consumers, that channel will fail for you."
Bruce McCracken is a business writer with specialization in outsourcing. His coverage areas are primarily in IT, eCommerce, CRM, HR, and supply chain/distribution with focus on small to mid-sized companies. He may be emailed at firstname.lastname@example.org.