Older depositors are an important market segment for community banks.
Yet reaching this critical group of customers is a significant challenge for banks across the country.
Digital channels have become the go-to vehicle for client communication at a time when branch transactions continue to decline; however, the digital strategy doesn't work well for reaching older customers.
Most community banks don't have the email addresses for half of their clients, and the percentage is even higher for those 65 and older.
The reasons are varied.
According to the Pew Research Center, four in 10 U.S. adults over the age of 65 don't use the internet at all.
Some older customers, meanwhile, may simply prefer not to divulge their email addresses because they don't intend to conduct bank transactions online or because they are afraid of a security breach. Indeed, when the customer experience management company PeopleMetrics asked consumers of all ages what topics they want to know more about, the only major issue popping up for seniors was how to protect their online identities.
Regardless of why, an inability to communicate with customers digitally is compounded by a broad decline in lobby traffic. We, as an industry, can't engage with a group of people who aren't coming into the branch. So to reach an older demographic, we need to search for another solution.
At Liberty Bank in Chicago, we have gone retro. In April 2015, we went back to the pre-digital era of printed newsletters. We created a custom biannual newsletter and two VIP letters that thank our top customers for their business. Each physical letter offers a little gift for coming into a branch and includes a gentle product pitch.
The decision to bring back paper was driven by disappointing results of an email campaign. The email format was attractive: It was populated with a series of interesting headlines linked to well-written syndicated articles. Two years into the program, however, we conducted a readership and engagement analysis and the results were disappointing.
The open rate per emailed newsletter averaged 7.2% — significantly less than a typical bank email average open rate. Also troubling was how each story was read by just about 1% of the entire customer base and that Google's search algorithm dropped our organic ranking because it recognized the syndicated articles were not original content.
Now that we have returned to paper, a cursory review suggests the strategy is working in keeping us in touch with our customers, reinforcing the brand, cross-marketing products and generating lobby traffic.
Other community banks face similar issues and will likely need to fine-tune their marketing strategies in order to reach an audience that could be offline or reluctant to engage with the bank online. To reach seniors, banks should consider returning to direct mail marketing.
At the very least, one benefit of reintroducing physical mail is that the communication method virtually ensures that recipients spend a few moments reading the message even if it ultimately ends up in the wastepaper basket.
As members of Gen X and baby boomers age, we expect seniors to become more receptive to digital communications. However, for the here and now, bombarding them with email — if we even have their addresses — won't mean our messages are read. Direct mail may remain the channel of choice to reach affluent customers.
Kevin Tynan is senior vice president of marketing at Liberty Bank in Chicago. He can be reached on Twitter @kevintyn.