19 August 2008

A study by database marketing specialist GI Insight has revealed that e-CRM in the financial services sector is considered by customers to be below average.

Improvement in this area, which entails communicating with customers via e-channels such as e-mail, is vital given that consumers are willing to be contacted via this channel, says the company, adding that the survey results should act as a wake-up call for financial services firms to start rethinking their channel strategies, whether for cross-selling or for affinity activity.

The survey of over 2,000 UK adults found that 74.4 per cent of respondents have given ‘permission to e-mail’ in the last six months to at least one company they buy from regularly. More surprisingly, 39.9 per cent have given permission to at least one company they have not yet bought from.

This statistic provides a major validation of the efficacy of collecting permission e-mails from the customer base. However, GI Insight warns that marketers in the sector must not be seduced by the low cost of e-mail and place over-reliance on this medium to meet their revenue generation targets. Anecdotal evidence from actual practitioners shows that combining e-mail marketing with direct mail produces conversion-to-sale rates seven to ten times higher than when e-mail is used on a standalone basis.

“Our new study underlines the importance and potential return on investment from systematic gathering of permission e-mails, whether from existing customers or from enquirers who have not yet bought but who have declared some sort of interest,” said Andy Wood, managing director of GI Insight. “Banking, credit card and mortgage finance are all experiencing heightened levels of competition, in part as a result of the credit crunch and an impending recession. Despite investments of millions in CRM systems, UK banks still only have, on average, less than two products per customer.”

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