Marketing by email: email sent by the Liberty Bank for Savings, Chicago, accomplishes more than just marketing: It also gathers analytical information for the bank to better understand its customers.

• Author: Hohe, Bob

EMAIL HAS GROWN AS A MARKETING MEDIUM FOR BANKS LARGE AND SMALL, particularly because of the data and insight it provides. "The online channel is now considered more strategically important than the branch channel," says a report cited on the website for ABA Banking Journal, "and the number of banks ranking the branch channel number one or two in importance declined from 73 percent in 2010 to 54 percent in 2012."

This significant decline has dramatic effects not only on the delivery of retail banking, but also on its marketing. As more delivery moves to the digital world, so too will marketing efforts.

Five years ago, collecting data and measuring results became a truly integral part of the marketing department's role at Liberty Bank for Savings, an $880+ million institution serving the Chicago area. The movement toward digital marketing was being embraced by community banks and senior leadership had been asking to see results.

The entire marketing team embraced the effort to measure ROI. Among other things, hard results help justify the marketing budget--especially through the leaner times of the recession. Liberty began its online marketing with email--a channel with which bank managers could easily measure and test campaigns.

In late 2009, after collecting email addresses for more than two years to send alerts and enroll customers in online bill pay, the bank hired an outside marketing company, BlueSpire Strategic Marketing, and sent out the -first quarterly email version of its newsletter, The Latest.

Readers divided into four segments

Email marketing has continued to evolve since the newsletter's first issue. The bank's data warehouse system was analyzed using psychographic data from Nielsen Clari-tas to identify four key reader segments (young, middle age, senior and affluent) that could be prime candidates for more targeted emails. Content was developed and sent to each reader segment.

For more than 18 months, the bank has seen a high level of engagement with subscribers. Results for all emails were at or above the industry average. Further testing revealed that perhaps content did not need to be entirely customized by segment because the subject line was the true driver of open rates. So the strategy was adjusted and now all the content is delivered to all recipients, but one article targeted to a reader's segment is highlighted in the subject line.

This test period ran from June through September 2012. Before the change to...