With the recent increase in postal rates, some credit unions may be considering migrating to electronic documents and delivery channels, even though reports show that an overwhelming majority (between 85% to 90%) of consumers still prefer to receive their statements in the mail and pay bills with a paper check.
So before making the significant investment electronic presentment and payment would require, it might be wise to take another look at what ink-on-paper has to offer. Paper billings and statements are often one of the main points of contact between a credit union and its members. Credit unions that issue thousands of statements per week should view these documents as a source of value and new revenue rather than simply "the cost of doing business."
Statements-unlike other forms of mail-are always opened, most often read and commonly kept on file. That makes them worth their weight in marketing advantages. You can be creative with ways to differentiate communications based on different member categories (such as high-balanced accounts) and personalize content to specific groups in terms of cross-selling and up-selling new and additional services.
Increase Value of Paper Statements
In the face of the postal rate increase-coupled with slow adoption of electronic presentment and payment-CUs may feel that they are caught between a rock and a hard place; but there is hope. Smart credit unions will find hidden value in their paper processes by looking more deeply at the value of printed statements and more closely at the reliability of the USPS. E-statements may someday provide significant cost advantages, but until member adoption is more fully developed it is wise to look at the many advantages of issuing statements via P.O.P.-plain old paper.
Today, with the advent of digital printers and advanced databases, the promise of one-to-one documents that perform well beyond generic "junk mail" is within reach. With selective data mining and thoughtful document composition it is possible to produce statements that command dramatically improved member response. Rather than viewing printed statements as an expense to be avoided, an organization should leverage its investment and realize the full promise of document personalization and one-to-one marketing.
One-to-one marketing and CRM take advantage of what is known about members-even if only their Zip Codes-and use it to customize the marketing messages members receive. In some cases, automated systems can create these personalized communications without adding significant production time or expense. The higher response rates and sales leads they generate actually can improve profitability.
One consideration that is often overlooked in the buzz about e-statements is the issue of deliverability. For instance, when a statement is put into the mail stream you have a high degree of certainty that it will be delivered-that's not proven with e-mail. Anti-spam filters, system outages and constantly changing e-mail addresses all combine to make e-delivery a less-than-certain process.
Another benefit of paper statements is tracking. The USPS offers highly developed tracking mechanisms that help ensure mail pieces don't get lost in the delivery process. For example, using Confirm, an automated tracking methodology from the USPS, along with "Planet Code"-a barcode applied to every mail piece that is scanned and documented at each postal facility-credit unions can obtain daily updates on the progress of individual statements or invoices that enter and move through the postal system.
These advanced tracking capabilities often provide unrecognized value-such as synchronizing those deliveries with coordinated telemarketing or other promotional efforts.
Electronic statements can certainly serve to decrease postage costs, but in the jump to save, CUs may find they lose inherent advantages found in tracking paper.
And while the use of electronic statements is growing, the savings are still contingent upon adoption. Meanwhile, CUs can find advantage and innovation using some of the tried and tested mechanisms developed over time in the printing and mailing industry.
Overlooked Resources Available
Some credit unions may still maintain the systems to print and mail their statements internally. However, businesses today increasingly prefer to focus on activities where they create a unique competitive advantage, and then support those areas with strategic relationships. Not every organization can be an expert in postal discounts, mail piece tracking, document composition and the all-important privacy issues we face today. In fact, as postal regulations and software applications become more sophisticated, this part of your business often requires a higher level of expertise to operate efficiently and effectively.
Outsourcers can make the investment in the latest equipment and software applications because they spread their costs over their entire client base. Their success depends on keeping up to date with leading-edge technologies and expertise in order to provide the highest levels of service for their clients at the lowest possible cost.
Whichever approach is taken-going with an outsourcer or continuing to process the work in-house-when it comes to "getting the statements out" every credit union should continue to look toward the future promise of e-delivery, while maintaining a close watch on the advantages found in the traditional paper process.
Harry Stephens is CEO of DATAMATX, a full-service providers of printed and electronic billing solutions. For info: www.datamatx.com or 800-943-5240.