Email Marketing in Financial Services - US - March 2008

SCOPE AND THEMES
What you need to know
Scope of this report
Abbreviations and terms
EXECUTIVE SUMMARY
Key highlights
Security and trust are the most important issues for consumers
Companies are responding to consumer fears
Reputation, social networks matter
Gender affects online behavior
Older Americans are more fearful online
Hispanic consumers represent a significant opportunity
Consumers respond differently to different types of companies and brands
Emerging trends may shift the playing field
INSIGHTS AND OPPORTUNITIES
Email marketing and mobile technology
Figure 1: Usage of mobile data services, August 2007
Figure 2: Sales of mobile data services, at current and constant prices, 2002-07
Figure 3: Forecast of U.S. sales of mobile phone data services, at current and constant prices, 2007-12
Social networks and Web 2.0
Figure 4: Social networking website referrals for financial services companies, 2007
Changing U.S. economic conditions
Green marketing
Figure 5: How consumers want companies to address environmental issues, 2007
FAST FORWARD TRENDS
 TREND: THE ATTENTION ECONOMY
 TREND: YOUR SPAM, MY SPAM
 TREND: FRIEND OF A FRIEND
OVERVIEW OF DEMOGRAPHIC TRENDS AND ONLINE REACH
Key points
The online population
Figure 6: Projected population of the U.S., by age, 2010-50
Figure 7: Estimated percentage of adults online, by location where accessed from, 1995-2007
Figure 8: Estimated number of adults who are online, 1995-2007
Most effective advertising channels for online users
Key Points:
Figure 9: Percentage of consumers who have responded to various types of advertisements in past year, January 2008
Figure 10: U.S. adult online presence, by age, gender, race/ethnicity, educational attainment and household income, 2007
THE EMAIL GENDER GAP AND OTHER USAGE DIFFERENCES
Key points
Figure 11: Population, by gender and age, 2007
Figure 12: Percentage of men and women who go online, by age, educational attainment, race/ethnicity, household income and marital status, 2005
Different uses of email
Key points
Figure 13: Functions of the Internet: How men and women use it as a tool to communication, transact, get information and entertain themselves, December 2005
Women use email to develop relationships; men use it to find information
Figure 14: Why online men and women value their email contact with their favorite groups, December 2005
Figure 15: Importance of known sender to consumer opening email, by gender, December 2007
Gender differences in navigating the Internet
Different levels of concern about email
Figure 16: Share of online men and women who are concerned about various online security threats, December 2005
Figure 17: Concern about handling of responses to financial services email solications, by gender, January 2008
Figure 18: Non-response to financial services emails due to concerns about companies sharing information, by gender, January 2008
Figure 19: Response to email advertisements for various financial products, by gender, January 2008
OLDER CONSUMERS—ONLINE ACTIVITY AND RESPONSE TO ONLINE FINANCIAL MARKETING
Key points
Figure 20: Internet use, by age, February-March 2007
Older Americans are more wary when they are online
Figure 21: Response to email advertisements for various financial products, by age, January 2008
Figure 22: Response to email advertisements for various financial products, by employment status, January 2008
Figure 23: Concern about handling of responses to financial services email solications, by age, January 2008
Figure 24: Non-response to financial services emails due to security concerns, by age, January 2008
Figure 25: Change in likelihood of opening financial services emails, by age, January 2008
Figure 26: Change in likelihood of opening any type of email solicitation, by age, January 2008
Figure 27: Importance of known sender to consumer opening email, by age, December 2007
HISPANICS—ONLINE ACTIVITY AND RESPONSE TO ONLINE FINANCIAL MARKETING
Key points
Demographics
Figure 28: Population, by race and Hispanic origin, 2002-12
Figure 29: Household income distribution for all households and Hispanic households, 2006
Hispanic consumers are more engaged online
Figure 30: Internet use, by Hispanic origin, February-March 2007
Hispanic consumers are more open to receiving communication from companies
Figure 31: Consumer preference for receiving relevant product offers, by Hispanic origin, December 2007
Figure 32: Likelihood of consumer opening email from a bank, by Hispanic origin, January 2008
Figure 33: Response to email advertisements for various financial products, by Hispanic origin, January 2008
Hispanic consumers are more open to sharing information with companies
Figure 34: Information consumers would be willing to disclose to unknown companies, by Hispanic origin, December 2007
Figure 35: Number of financial services accounts managed online, by Hispanic origin, December 2007
THE DEMOGRAPHICS OF EDUCATION AND WEALTH, AND RESPONSE TO ONLINE FINANCIAL MARKETING
Key points:
Demographics
Figure 36: Household income distribution, 2006
Figure 37: U.S. educational attainment, population aged 18+, 2007
Less educated, poorer people are online less
Figure 38: Internet use, by educational attainment, February-March 2007
Figure 39: Internet use, by income, February-March 2007
Less educated, poorer people are less trusting
Figure 40: Increase in concern about online security in last five years, by income, January 2008
Figure 41: Increase in concern about online security in last five years, by educational attainment, January 2008
Less educated, poorer people are more likely to respond to financial services solicitations
Figure 42: Response to email advertisements for various financial products, by income, January 2008
Figure 43: Response to email advertisements for various financial products, by educational attainment, January 2008
Less educated, poorer people are less likely to have online accounts
Figure 44: Number of financial services accounts managed online, by income, December 2007
ONLINE FINANCIAL MARKETING RESPONSES BY MARITAL STATUS AND U.S. REGIONS
Unmarried couples are much more receptive to credit card offers
Figure 45: Response to email advertisements for various financial products, by marital status, January 2008
U.S. regional differences
Figure 46: Consumer preference for receiving relevant product offers, by region, December 2007
Figure 47: Importance of known sender to consumer opening email, by region, December 2007
CONSUMER CONCERN ABOUT SECURITY IS INCREASING; TRUST IS WEAK
Key points
Consumers think security is a problem
Figure 48: Increase in concern about online security in last five years, January 2008
Figure 49: Increase in concern about online security in last five years, by gender, January 2008
Figure 50: Increase in concern about online security in last five years, by age, January 2008
Consumers don’t trust companies to safeguard their personal information
Figure 51: Consumer beliefs about sharing of personal information, January 2008
Figure 52: Consumer beliefs about sharing of personal information, by Hispanic origin, January 2008
Consumers are overwhelmed by inbox overload: Spam
Figure 53: Change in amount of spam received, January 2008
Figure 54: Change in amount of spam received, by age, January 2008
Figure 55: Unwanted solicitations from unfamiliar companies, January 2008
Figure 56: Unwanted solicitations from unfamiliar companies, by age, January 2008
CONSUMERS’ FEARS INHIBIT THEIR ENGAGEMENT WITH COMPANIES
Key points
Consumers are reluctant to even open emails
Figure 57: Percent of business emails opened by consumers, December 2007
Figure 58: Percent of business emails opened by consumers, by age, December 2007
Figure 59: Change in likelihood of opening any type of email solicitation, January 2008
Figure 60: Change in likelihood of opening any type of email solicitation, by race/ethnicity, January 2008
Figure 61: Change in likelihood of opening financial services email solicitation, January 2008
Figure 62: Change in likelihood of opening financial services email solicitation, by gender, January 2008
Consumers are unwilling to share important information with companies
Key points:
Figure 63: Information consumers would disclose to unknown companies, December 2007
Figure 64: Information consumers would disclose to unknown companies, by gender, December 2007
Figure 65: Information consumers would disclose to unknown companies, by age, December 2007
COMPANIES ARE RESPONDING TO TRUST AND SECURITY CONCERNS
 WORKING ON THE CONSUMER EXPERIENCE
Key points
Technical solutions
Credible format
Opting in or out
Separate URLs
Personalized data in emails
Email newsletters
Affinity partnerships
 CRITICAL ELEMENTS: REPUTATION AND SOCIAL NETWORKS
Key points
Figure 66: Factors affecting consumers’ decisions to open emails, January 2008
Figure 67: Factors affecting consumers’ decisions to open emails, by gender, January 2008
Figure 68: Factors affecting consumers’ decisions to open emails, by age, January 2008
Figure 69: Factors affecting consumers’ decisions to open emails, by income, January 2008
Figure 70: Factors affecting consumers’ decisions to open emails, by race, January 2008
REPUTATION: THE VALUE OF BRAND QUANTIFIED
 WHOSE EMAILS GET OPENED?
Key points
Consumer response
Figure 71: Consumers’ likelihood of opening emails, by type of financial institution, January 2008
Figure 72: Consumer likelihood of opening email from leading financial services companies, January 2008
Banks
Figure 73: Consumer likelihood of opening email from generic and well-known banks, January 2008
Insurers
Figure 74: Consumers’ likelihood of opening emails from generic and well-known insurers, January 2008
Credit card issuers
Figure 75: Consumers’ likelihood of opening emails from generic and well-known credit card issuers, January 2008
Mutual funds
Figure 76: Consumers’ likelihood of opening emails from generic and well-known mutual funds, January 2008
Brokerage firms
Figure 77: Consumers’ likelihood of opening emails from generic and well-known brokerage firms, January 2008
 ACQUISITION VS. RETENTION
Key points
Consumer response
Figure 78: Importance of various factors to consumer decision to open email from known and unknown sender, December 2007
Frequency of customer contact
Figure 79: Consumer preferences for various types of email communication, frequency from known companies, December 2007
Figure 80: Consumer preference for receiving relevant product offers, by gender, December 2007
Figure 81: Consumer preference for receiving relevant product offers, by age, December 2007
CLUSTER ANALYSIS—IDENTIFYING THE HIGHLY MARKETABLE CONSUMERS
Key points
First responders
Stable, sometime responders
Leave-me-aloners
Figure 82: Financial service consumer clusters, January 2008
Figure 83: Increase in concern about online security in last five years, by consumer clusters, January 2008
Figure 84: Non-response to financial services emails due to security concerns, by consumer clusters, January 2008
Figure 85: Concern about handling of responses to financial services email solications, by consumer clusters, January 2008
Figure 86: Concern about handling of responses to financial services email solications, by consumer clusters, January 2008
Figure 87: Factors affecting consumers’ decisions to open emails, by consumer clusters, January 2008
Figure 88: Change in amount of spam received, by consumer clusters, January 2008
Figure 89: Change in likelihood of opening financial services emails, by consumer clusters, January 2008
Figure 90: Financial service consumer clusters by gender, January 2008
Figure 91: Financial service consumer clusters by age group, January 2008
Figure 92: Financial service consumer clusters by income group, January 2008
Figure 93: Financial service consumer clusters by race, January 2008
Figure 94: Financial service consumer clusters by Hispanic origin, January 2008
Methodology
APPENDIX: ADVERTISING AND PROMOTION
Figure 95: A financial services email advertisement targeting a niche demographic market, 2007
Figure 96: An email advertisement embedded in an outside non-business newsletter, 2007
Figure 97: Example of an email advertisement featuring affinity partnerhsip offer incentive, 2007
Figure 98: Example of an email advertisement featuring affinity partnerhsip offer incentive, 2008
Figure 99: A financial services email advertisement attached to a message from an affinity partner, 2007
Figure 100: An example of an email advertisement including account information, from American Express, 2007
Figure 101: Citi Card security newsletter, 2008
Figure 102: An example of an email advertisement designed to get consumers to go paperless, 2007
Figure 103: Example of an email advertisement featuring green marketing, 2007
Figure 104: Green cause marketing, 2008