07 Feb C’mon, how good is EDM really?
One of the arguments for Event Driven Marketing is the results that people speak of, typically presented by banks at conferences. You will hear stories of response rates that marketers only dream of.
The problem is that a) the banks may not want to tell the whole story, and b) they only represent one or two banks. EDM can be fantastic, if you get it right. I have been lucky enough to work on several EDM projects and have seen the results at first hand. However, I can’t tell you too much, otherwise I’d have to kill you.
Last year I was asked by EFMA to do some CRM research, part of which was to try and determine “what are the best practises in CRM” and to find out the results people are achieving. The objective was NOT to find out if product X was better than Product Y (got to your Vendor for this). Instead it was to find out the relative strengths of particular approaches and which were the best regardless of the tool used. Below is a small section of the results.
This market research was part of a large CRM survey conducted by eventricity on behalf of EFMA and Atos Origin. It was conducted with 65 Banks from 29 different countries.
There is a lot of market research in the CRM space. All too often we see statements like, “The results were much better than before”, or “we noticed a significant uplift”, but what do they mean?
The majority focus on strategy or products rather than practicality. None give a clear view of the best practises with a quantifiable or measurable assessment of which work and their relative values. Similarly, there is no vendor independent assessment of different approaches or a set of metrics that can inform a Financial Institution of what they can expect by adopting a particular CRM direction. You had no real way of knowing…
Below is an excerpt of the research, covering the results obtained from differing CRM techniques used to create targeted Customer leads / contact lists. These included
- Ad-Hoc (lists generated spontaneously without in-depth analysis)
- Data Mining
- Inbound (selling to the Customer as part of an inbound call).
In this part of the survey we asked four questions about the results obtained from Leads generated by these techniques. Specifically we wanted to know the metrics for Positive / Negative responses and for Sales / Opt out.
1. What is the percentage of Positive responses you receive for contacts?
The first thing to notice is the different results achieved between geographic areas. This reflects both the level of maturity of the market and of the Banks. Here we can see that Western European Banks achieve much better results from their generated leads.
Note that poor targeting (ad-hoc) consistently delivers low positive responses from Customers and that all other approaches produce better results. As for the poor results from Northern Europe, this is due to there being too few responses to the survey from this area.
As you can see, EDM leads achieve much higher positive responses from Customers – so far, so good.
If customers respond well to leads based on Events, what about the Sales generated from these contacts?
2. What is the percentage of Sales you receive for contacts?
Here we can see that Events generate much greater level of sales that from other techniques. Also note that on average in Western Europe, Ad-Hoc contacts generate only 1.75% sales.
Having assessed the positive aspects of each approach, we wanted to determine the negative results generated from these leads.
3. What is the percentage of Negative responses you receive for contacts?
Now we can see the counterpart to Western Europe’s positive results in that their Events only generated around 5% negative responses.
Notice the spikes for both ad-hoc and inbound. Is the customer telling them that they don’t like being contacted when it isn’t relevant nor do they like being sold to when they call in?
Note that Eastern Europe’s banks consistently received high negative responses to contacts regardless of approach.
4. What is the percentage of Opt-outs you receive for contacts?
With the advent of the EU marketing privacy laws, an Opt out capability has become a requirement for all marketing communications. Opt outs have the potential to counter all of the positive results achieved. It is perfectly possible for a campaign to do more damage than it does good, eg. Ad-hoc campaigns generating average Sales of 1.75% and resulting in a 12% loss of contactable customers.
I believe that there are two things to note from the above;
Using poorly targeted, Ad-Hoc techniques can have disastrous results. In the survey nearly 80% of the banks questioned used Ad-Hoc lists to generate leads, with some respondent banks reporting that they can now talk to less than 25% of their customer base!
However, those banks who communicate to their customers in a more targeted way obtain greater customer satisfaction and higher sales and generate fewer negative results. The best results are obtained from leads generated by Events (hooray – we won!).
Both of these points are obvious. But based on the above research you now have actual numbers to back up your feelings.
In conclusion, the results above are not from a single Bank that did well. They are from 65 different banks spread across the whole of Europe. If those who use an EDM approach can get these results, so can you.
To find out how, you can Contact us and we would be happy to help.