TransPromo Builds Customer Relationships
By Pat McGrew
Is your bank communicating effectively with your customers? Every bank wants to answer affirmatively, but a survey of your customers may tell a different story.
For many banks, customers are identified by account number and net worth, but little else is known about them. In fact, for many banks, so little is known about each individual customer that solicitation letters for new products and services are sent to customers who are already using them. That leaves the impression that they are not valuable assets to the bank, which leaves those customers vulnerable to the next offer that comes along from a competitor.
Take a step back and it becomes clear that bank customers are met with thousands of marketing messages every day. E-mail, pop-up ads, radio, TV, billboards and magazine advertising account for more than 3,500 messages a day for the average person.
Add to that the number of attempted telemarketing calls, which the Federal Trade Commission puts at up to 104 million per day, and it is easy to see how your relationship with your customer could become diluted in a sea of other messages.
Your challenge is to build a closer relationship with your customers by letting them know that you know who they are and what services are appropriate for them, and by making appropriate offers that let them know there is value in having a relationship with your organization.
TAKE THE FIRST STEP
The first step on the road to focusing on your customer is to carefully review the current state of what your customer receives from you. Monthly or quarterly statements and regulatory notices are the most common communication, though your marketing organization may also have campaigns that use direct mail offers and letters to try to build on the existing relationship.
Depending on the products your bank has to offer, they may be offering home loans, auto loans, retirement plans, college savings accounts or even financial planning services. Regardless of how broad or narrow your portfolio of services may be, it is likely that you have services to offer your customers that they do not currently use.
If you were a customer of your bank, would it look like all of these offers were directed to you based on what they know about you? Or would it look like they were sending out offers because they have your address and name? Bank customers want mail that informs them, but they want mail that informs them appropriately. So once you have reviewed your current marketing campaign communications and your current customer-facing transaction communications, the next step is to identify how to use the information you have about your customers to communicate with them.
KNOW THY CUSTOMER
There are five keys to this part of the strategy:
• Identify what you know about your customers and their preferences. Do you know which of your customers prefer shopping online, which travel frequently or which have school-age children? Do you know which are getting ready for retirement and which are saving for a new home?
• Using information in your customer database, plus publicly available demographic data, you should be able to build a picture of every customer and then use that information to understand how they buy and save.
• Understand why they buy and save.
• Gaining this insight will help you to build programs that speak to your customers and make it hard for them to look elsewhere when they need banking services.
• These practices also build loyalty.
Now that you know how your bank styles its current customer communications and what you know about your customers, the next step is to find a way to differentiate your bank from your competitors and to deliver value to your customers. Remember that if you can increase the business you do with a current customer by only 5 percent, you add 50 percent of that business to your bottom line. An extra value comes in a reduction of operating costs! According to the “Harvard Business Review,” a 2 percent increase in customer retention turns into a 10 percent reduction in operating costs.
Providing that value to your customers requires re-thinking how you communicate with your customers. Instead of letting the line of business and product owners dictate the look of the statements and regulatory information sent to customers, build consistent-looking customer communication that looks the same regardless of where it originates in the bank. The most effective way to do this is to begin a TransPromo campaign in your bank.
TransPromo is the industry term for coordinating the use of customer data with excellent information design techniques and the appropriate use of color and variable data to create effective customer communications that demonstrate to customers that you know who they are and you are going to market to them appropriately. One key to TransPromo is to be sure that you have control of your data and that you understand your customers. Another is to remember that your customers are increasingly looking for multi-channel communications that coordinate with their lifestyles. They do not want to give up paper communication even if they choose to pay online. For your bank, that means that communication strategies and designs must be coordinated across all channels so that they look the same and speak to the customer consistently.
The team at International Paper recently confirmed this. Its study indicates that, while 12 percent of bank statement recipients receive their statement online, 63 percent still have them delivered via the mail, and 25 percent receive them online and on paper. People like paper because it has longevity, it’s portable and for many it is easier to read. In fact, over half of the people surveyed for the study said that they would change banks if they were told that they would have to pay a fee to continue to receive their statements in the mail!
That means banks have an opportunity to use these paper statements as the basis of a new and improved conversation with each customer. The challenge is to develop a new approach and to take the time to redesign to create a more effective regular customer communication that provides both the transaction information the customer needs and marketing offers they are likely to want. That redesign should include both appropriate color and the use of customer data to drive formatting rules that create a customer-specific experience.
COLOR MY STATEMENT
Why color in banking? Because color helps us retain what we read and understand the concepts presented. It also helps increase brand identification. We are hardwired to respond to color by eons of evolution. The challenge is to take advantage of that in the design of customer communication so that we attract more interest from the customer. There is also indication that when we redesign with color there is a decrease in errors in interpretation, which can lead to fewer calls to the call center!
Why redesign? Because bank statements and regulatory notices have rarely had the advantage of good information design. Over the last 25 years of the evolving bank statement, the goal has been to pass through the transaction information and print it as quickly as possible. The design was confined to preprinted backgrounds with a company logo and sometimes a watermark. The requirement was to think about every page that was printed as a cost that should be avoided. TransPromo turns that around and proposes that marrying your transaction data to your customer data and Customer Relationship Management systems creates a new revenue opportunity.
A TEAM APPROACH
How do you go about starting a TransPromo program at your bank? The first step is to assemble the marketing and creative teams with the data center and print center teams and introduce them to each other. If your teams already work together, you are ahead of the curve. Once this group is sitting together, the goal is to help everyone understand the value of moving customer-focused communication that uses everything the bank knows about the customer to build more effective customer communications. That normally takes approval and consent of the executive management, so having an executive project owner is always a good idea.
This team should perform the audit discussed earlier and determine what the pilot project should be. It is often a good idea to engage with a design company that understands digital color printing and specializes in statement makeovers. It will also be necessary for the marketing organization to rethink its mission. In addition to developing letter campaigns and direct-mail campaigns, this is the group that will need to come up with engaging customer communication to be included in the newly designed statement communication. It may begin with just a few offers of existing bank services, but over time this group should be able to develop targeted campaigns for smaller demographic segments that offer not only bank services, but services from partners.
MAKE THEM AN OFFER
The offers require design, development and tracking. For every offer made, there is a need to track who gets the offer and what the response rates are over time. The marketing organization will need to learn to tune the offers and they will need to make a commitment to refresh the offers monthly so that their customers do not contract offer-fatigue. The goal is always to communicate to the customer in a way that makes them want to open the envelope every month, spend time reviewing the offers and respond to the offers. The value that statement redesign can bring to this process is not only the opening of a marketing portal on the statement, but the fact that the addition of graphic representations of the state of the account or charts that show growth rates for different savings plans can provide a hook that brings your customers back to you when they need a new account.
PATH TO PERSONALIZED MARKETING
Today there are financial institutions that use TransPromo to create communication with their customers that is colorful and that differentiates them in the market. They have coordinated their data, design and development to produce personalized, micro-versioned customer statements that incorporate the information that must be provided and offers that customers look for. Your bank should be considering the same path!
P.C. “Pat” McGrew, an electronic document professional, is the director of industry marketing for transaction print at Kodak Versamark. She is the co-author of seven books covering a variety of aspects of information delivery in multi-channel enterprise environments, as well as the author of major research studies and dozens of articles in the trade press covering business continuity, disaster recovery, records management, print-and-mail innovations, compliance issues, document strategy auditing, the European statement printing market and other topics. She can be reached via e-mail at Pat.McGrew@kodakversamark.com. An annotated version of this article is available from the author.