Cover Story: Taking Care of Business
Email vs. Direct Mail
For First Tennessee, targeted emails to business customers tend to produce similar results to direct mail campaigns, according to Marks, but at significantly lower costs—about 20 percent to 50 percent lower. The bank has seen a rise in clickthrough rates since it began personalizing content.
"For example, we send out a regular weekly and/or monthly report by our chief economist, and when we began to personalize the emails by putting the name of the customer's assigned relationship manager in the 'from' line, the open rate increased about 10 percent," he says. "We also personalize these emails to analyze which marketing tactics are prompting better response rates."
Typically, the response/conversion rates are 10 percent higher for personalized messages than for non-targeted or non-personalized messages, says Marks. In 2011, IBM conducted a study on First Tennessee's target marketing and found the return on investment for the tools that enable highly personalized experience in some cases reached 600 percent.
"I think how well banks can do this depends on a lot of variables, including the size of the institution," Marks says. "A very large institution has the ability to do more personalization based on analytics and automated targeted messaging, but a very small bank might just personalize messages the old-fashioned way—by picking up the phone and talking to their customers."
In the end, Marks points to 13 recent awards from the financial industry research firm Greenwich Associates for excellence in commercial banking based on client experiences (bit.ly/ftgawards). He says the awards demonstrate customer needs are being met, in large part due to the bank's targeted marketing efforts to achieve additional cross-sales.
"The value proposition we deliver really resonates with those segments, and we're ramping up what has been successful," says Marks. "We think the personal service and expertise we provide to the commercial segment is better than the competition, which says something in a category with over 8,000 competitors."