SEATTLE - Many members won’t touch credit union e-mails with a 10-foot pole, thanks to phishing scams–and some CUs say they don’t know what to do to salvage the low-cost, high-risk marketing tool.
“I don’t know what the future holds for e-mail marketing,” said Shari Storm, VP and CMO at Verity CU here. “With phishing, people are reluctant to click-through because they don’t know who the e-mail is really coming from. That makes it hard to promote, say, a loan product, because people are reluctant to give you any information.”
Michigan First CU of Lathrup Village, Mich. is also feeling the pain, said James Anderson, VP-electronic services at the $470-million CU, which typically sends monthly e-mail promotions for CU events or products.
“Our e-mail marketing click-through rates need to be improved,” Anderson said.
Phishing destroys member trust, not only in e-mail, but in the website, contact center and mobile banking, according to Aite Group, a Boston-based research and advisory firm focused on the financial services industry.
Worse yet, the industry is foregoing e-mail authentication systems, which help to verify to members that an e-mail is valid, reported the Authentication and Online Trust Alliance (AOTA), a Seattle-based nonprofit working to eliminate e-mail and Internet fraud.
More than half of Fortune 500 and Internet Retailer 300 companies are employing e-mail authentication to build consumer trust, as compared to only 20% of FDIC banks, AOTA continued. AOTA did not gauge use of e-mail authentication by CUs, although an informal survey by the e-mail identification firm Iconix of Santa Clara, Calif., confirmed the same number for credit unions. The $360-million Verity CU is “looking into” e-mail authentication, said Storm.
One-to-one e-mails don’t seem to be a problem, Storm added. “If we tailor an e-mail from one particular representative to one particular member, it works great.”
Trust is just one issue plaguing e-mail marketers; credit unions are also finding it difficult to keep e-mail lists up-to-date.
“There are so many different lists to manage, including those that come from the host system, legacy systems, or from manual processes,” explained Storm.
“We’re working on cleaning up our e-mail lists in order to boost the effectiveness of the program,” Anderson added. “We will be running member promotions and staff incentives to help add valid e-mail data to our database and clean up outdated data.” Credit unions need to be “smart” about what they send, Storm continued. “If you send too much, it’s worse than if you don’t send at all.”
In the past, Michigan First “over-farmed” its e-mail list, Anderson agreed. “We’re working on better market segmentation using our data warehouse and MCIF software to avoid sending out too many e-mails, which drives down click-through rates.”
It’s not okay simply to turn away from the e-mail channel, said Storm. “E-mail marketing is really important because we want to reduce the amount of paper we mail out. And e-mail can be quicker and more secure.”
Verity, which “dabbles” in e-mail marketing, is also considering text-message marketing via members’ mobile phones, she said.
Meanwhile, the Verity website is shining through, said Storm. “People still trust the website. We’ve seen the number growing for members taking advantage of Web offers.”
Verity added a rewards checking product to the site late last year. Since then, the website has attracted more and more new members every month, Storm said. In the past, only 1% of the membership joined after they learned about Verity through the Web branch, she said. Recently, closer to 20% credit the website as the reason for joining.
MORE
Read more about e-mail marketing at cujournal.com and search the following bolded terms in the archive:
How American First CU Is Breathing New Life Into Its Website
Why Internet Banking Is Becoming ‘Cult Of Personality’ At Some CUs
The Web Ahead
For info on this story:
* www.michiganfirst.com
* www.veritycu.com
