Financial Wisdom: Solutions for Banks - The Financial Wisdom Newsletter Strategy for Consumers: White Paper

Marketing financial services to high net worth (affluent) customers of a bank represents significant opportunities and present significant obstacles. The potential revenue from fulfilling the extensive financial product and service needs of affluent individuals can justify focused marketing efforts.

To be effective, a marketing communication program must be personal, credible, provide relevant messages and be sustainable. The Financial Wisdom personal correspondence program meets each of these criteria.

Developing a Communication Strategy with Tactical Execution
While the physical make-up of an affluent customer base will include individuals with different professions, different ages and different financial services needs, there is usually one common theme to their financial services desires…

Reduce the stress of my finances, make them easier, make them quicker, make them simpler. Responding to that desire requires that any marketing communication be seen as valuable and not a waste of time to read. This means the form, content and appearance must demonstrate "value." Personal letters with newsletter inserts deliver that perception of value.

A quarterly newsletter is the reason to communicate. The personal letter and the newsletter are the means to communicate. If an individual values their banking relationship, a letter from my bank will get opened and read. The FinancialWisdom personal correspondence delivers communication packages comprised of a signed personalized cover letter and a four page, four color newsletter. The cover letter is the "personal" message from a senior officer of the bank and the newsletter is customized with the bank's message on the front and last pages with informative, financial educational articles on the inner two pages.

Segmenting the Affluent Customer Base
For the communication program to be effective, the information delivered must have meaning to the reader. The message must be relevant. For affluent individuals a relevant message should subtly recognize their wealth and reflect:

What they do -- profession.
Life stage -- age.
Suitable products.
Educational articles that address their concerns -- funding college education is a relevant topic for baby boomers with children. However an article should focus on investment strategies and tax implications instead of the need to start saving early.

To understand the segments for this program consider a two dimensional matrix with profession and age as the axes.

Profession	Generation X	Baby Boomers	Mature/Seniors
Corp. Excutives
Professionals
Small Business Owners
Sales Professionals
Non-working Individuals

Understanding some of the attributes of each of these categories can make the creation of relevant messages easier. Each of the segments within the categories can have different attributes. Here are some sample descriptions to keep in mind for each segment.

Professions

Corporate executives or other highly paid individuals working for companies. These individuals are probably very busy, may travel extensively and may want the convenience of electronic banking. They may also have special financing and advisory needs, such as when they exercise stock options. Their needs may also be seasonal if their compensation includes annual bonuses.

Professionals such as attorneys, accountants, consultants and those in the medical field. They may have private practices or be part of a business. They may also have more control over their compensation, both in form and in timing, than corporate executives.

Small business owners. This group is very diverse based on the size, type and stage of their business. Their personal finances are also probably very interwoven with the finances of their businesses.Small business owners also represent the potential for ancillary business from the business itself, the employee base and the retirement plan of the business.

Sales professionals, usually working for mid-size to large companies. This group is often overlooked and yet represents a significant opportunity. Their compensation is usually incentive based resulting in uneven usage of credit and investment products.

Non-working individuals, such as retired, business sellers, other recently wealthy and those with inherited wealth. These individuals may represent opportunities for trust services and significant estate planning services. They can also represent families whose members share wealth and similar needs.

Integrating Life Event Marketing into the Segmented Customer Base
With this two dimensional matrix as a framework, the next step is to decide on what messages to deliver to each of the matrix spaces. The product message selected for each matrix box must be one that is usable by individuals in that box. Below is a chart that connects some obvious product applications to the age segments.

Group	Life Events	Product Focus
Generation X	College Graduation Car Purchase Graduate School Marriage Birth of Children	Checking Accounts Auto Loans Safe Deposit Boxes Home Mortgage Mutual Funds
Baby Boomers	Home Purchase Career Advancement Inheritence Empty Nest	Home Mortgage CD's Mutual Funds Home Equity Loans Investments
Matures/Seniors	Major Promotion Retirement Birth of Grandchildren Inheritence Death of Spouse	CD's Investments Mutual Funds Mortgage Refinancing Trust Services

Creating the Stream of Relevant Messages
For the educational articles to be included in the newsletter, not only must the topic be relevant, the article must be written for an affluent reader. This can change the focus within the article. For example, don't tell an affluent baby boomer to start saving for a child's college education early, explain how to invest those funds or how to minimize the taxes on them.

- Educational Articles

Planning for a financially secure retirement.

Preparing and updating a personal balance sheet.

Funding a college education.

Fixed vs. variable rate mortgages.

Choosing a mutual fund.

Evaluating stocks to buy.

Building a ladder of maturities with bonds.

Individual Retirement Account options.

When to refinance your mortgage.

Another way to inform people is with the use of mistakes. Formatting an article in this manner can make the article engaging and interesting.

- Mistakes to Avoid

Not fully using company retirement plans.

The wrong retirement investments.

Choosing an inappropriate mix of stock, bond and cash investments.

Ignoring the long-term potential superior returns historically found with equities.

Not understanding the value of bonds and bond mutual funds can fall when interest rates rise.

Choosing a mutual fund based on short-term performance.

Not using diversification in your investment portfolio.

Using the wrong investment advisor, or the wrong type of advisor.

Not monitoring your financial progress and evaluating your investment results.

To deal with this multi-level structure of developing relevant messages, an understanding of the characteristics and needs of each segment it critical. Having relevant content for the newsletter for each customer segment requires an extensive "library" of content and the capability to integrate this content into the structure of the newsletter.

The design of the newsletter must facilitate the customization of the content so each newsletter addresses the issues that are truly relevant to the reader. The actual printing of the newsletter must also be considered. The use of a four-color process makes graphics more attractive and allows for the use of photographs. Current printing technology can make the printing of different newsletters at varying quantities practical.

Getting the Right Messages Delivered and Read by the Right People
Using direct mail to deliver targeted messages is a process that requires attention to detail. The average individual receives over 75 pounds of mail each year. Business owners receive several times that amount. Most feel overwhelmed with "junk mail" and do not want more from their bank.

The first step to assure that your message will be opened and read is to avoid the "bulk mail look." This is accomplished through several steps. The first is to use your regular, high quality business envelope. Then, the customer's name and address are printed. On the envelope careful attention is paid to the use of upper and lower case letters in names and addresses. Pre-cancelled stamps are used for postage.

The printed address instead of a label or a window envelope is more labor intensive and time consuming. And because there is a matching cover letter, continuous steps must be taken to assure that the right letter is inserted into the right envelope The use of pre-cancelled stamps eliminates the "out of town" postmark. This small "detail" that makes a difference.

The letters are sent using automated, bar-coded processing. This classification takes advantage of reduced postal rates, but provides faster delivery time than standard bulk mail. Delivery is further enhanced through the use of address standardization and CASS certification.

The cover letter is prepared on stationary identical to that which you use every day. The letter is personalized and bears a digitized signature from a senior bank officer. The newsletter is printed on high quality paper using the most sophisticated four-color production process available. There is a liberal use of photographs and graphic elements to create a friendly, interesting presentation.

The overall appearance of the mail-piece says as much about your organization as does the content of the articles. The total result of laser-printed envelopes, stamps, matching cover letters, high production values and relevant messages elevates this package to "personal correspondence" in the eyes of your customers. It gets their attention, gets read, delivers useful problem solving information and reinforces their valuable relationship with their bank.

About Financial Wisdom
The FinancialWisdom personal correspondence program is a highly flexible and highly customized marketing program that delivers relevant messages to targeted individuals in an efficient and effective manner. It represents the combination of the understanding of the financial services needs of different individuals, an understanding of the products and services that can respond to those needs and the capability to create, process and deliver large quantities of personalized mail.

To learn more, call Mike Patterson or Larry Rine at 1/800-723-7237.

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