email marketing outlook for mutual fund industry - netcore

7/23/2019 Email Marketing Outlook for Mutual Fund Industry - Netcore

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INDIAN MUTUAL

FUNDS INDUSTRY

EMAIL MARKETING

OUTLOOK 2015 for the


2/17

Hello fellow marketer,

I am pleased to present to you the Email Marketing Outlook for the Mutual Funds

industry.

The journey of netCORE taking up this study was fuelled by one simple question

that marketers ask whenever we present email metrics: How relevant is this

metric to our industry?. Fact is email responses widely vary across different

industries and what we require is an apple to apple comparison to drawconclusions. Our study aims to provide a holistic review of email marketing for the

mutual funds industry and answers some basic questions that every email

marketer has what kind of open rates are other people in your industry getting?

How much is too much for unsubscribes? Is there any best day/ time to send

emails? Learning answers to these questions will help email marketers improve

their email marketing and maximize their revenue potential.

This report will uncover what 491 million emails have to say about the when, whatand why of email marketing in mutual funds industry insights you won't nd

elsewhere. After every observation, we provide recommendations on how you can

adjust your email strategy to get better ROI.

Technology has always been a motivational force for development, an enabler and

we predict email marketing in 2015 will be driven by Analytics & Automation. In the

Trends section, netCORE focuses on ve email marketing trends that are

emerging, keeping in view the new consumption patterns and buying behaviour ofInvestors and IFAs. You can use this as a backdrop for your strategy.

Happy reading!

Kalpit Jain

Chief Customer Ofcer

netCORE Solutions

FOREWORD


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INDEX

Why read this report

Executive Summary and highlights

Overview of Mutual Funds Industry

About the Industry

About the Indian Investor

Major challenges faced by the Indian Mutual Funds Industry

Email Marketing in Mutual Funds Industry

How Email Marketing helps the Mutual Funds Industry

Type of emailers the industry sends

Research Findings & netCORE Insights

Future Trends for Email Marketing in the Mutual Funds Industry

Conclusion

Methodology

About netCORE

About netCORE Research Laboratory


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WHY READ THIS REPORT?

EXECUTIVE SUMMARY & HIGHLIGHTS

The mutual funds industry's AUM crossed the 10 trillion mark for the rst time in May

1

2014 and the key drivers for this increased participation has been attributed to theawareness initiatives by SEBI and various mutual funds houses. For an email

marketer, this encouraging number accentuates the opportunity email marketing

has to unleash the business potential in the untapped demand and expand the

existing markets. This report is a rst-of-its-kind study on email marketing for the

mutual funds sector that reects how customers are responding to your email

marketing efforts to educate, engage and inspire conversions. Essentially, this

report will provide you with benchmarks to gauge your own email performance and

helps you increase the value of your email programs.

Over 491 million emails sent by mutual funds companies, including majority of

India's top 11 mutual funds that contribute to 86% of the total assets under

2management (AUM) were analysed for the year 2014. The report covers email

marketing trends in Mutual Funds industry for the year 2014 and provides the key

performance metrics that shaped the success of netCORE client's email programs.

The report includes netCORE's observations on the current trends and gives

insights on how the industry can respond to maximise the revenue potential from

email programs. It concludes with a forecast on how email marketing can enhance

the industry outcomes in the near future, predictions that will help marketers

determine their strategy and plan ahead.

1. Association of Mutual Funds in India (AMFI) 2. Morningstar, an independent mutual fund data provider

01

Copyright 2015 by netCORE Solutions. All Rights Reserved


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KEY EMAIL PERFORMANCE METRICS FOR

THE MUTUAL FUNDS INDUSTRY(Source : netCORE Research Laboratory)

Open rate

6.15%

Click rate

0.3%

Click to Open rate(CTOR)

4.6%

emails sent per monthper user (average)

6

Best time tosend emails

Best Day forsending emails

Monday &Wednesday

10 amto 12 pm

I

II

III

IV

V

VIVII

VIII

IX

X

XI

XII

S

M

T

W

T

F

S

3OVERVIEW OF THE MUTUAL FUNDS INDUSTRY

3. Indian Mutual Funds Industry report, KPMG report 2014 | Association of Mutual Funds in India (AMFI) | Penetration of Mutual

Funds in India: Opportunities and Challenges | The Securities and Exchange Board of India (SEBI) Study | Indian mutual fund

industry at a glance, PwC report 2013

ABOUT THE

INDUSTRY

44 fund houses

Assets worth INR 10 trillion

Money is invested in only equities or debt

instruments or a mixture of both

Push' product where the distributors play a huge

role in selling them

`

Top ten fund houses contributing 77% of the total assets

under management and the bottom ten a mere 1%

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OVERVIEW OF THE MUTUAL FUNDS INDUSTRY

ABOUT THE

INDIAN

INVESTOR

Risk averse

Past performance of Mutual Fund is the most important

determinant of investment decision

Newspapers and magazines are the most important basis

of investment decisions

Too many mutual funds and many schemes, not sure how

many he should invest in

Willing to have more information on mutual funds

Low Mutual Fund penetration

Low levels of investor awareness

Lack of ability to communicate value to investors

Perceived Risk as compared to xed assets investments

Limited incentives for distributorsfor MF products

as compared to other nancial products

Evolving Regulatory Framework

Lacklustre Marketing strategyof most mutual funds

MAJOR

CHALLENGES

FACED BY

THE INDIAN

MUTUAL

FUNDS

INDUSTRY

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7/17

HOW EMAIL MARKETING HELPS THE MUTUAL FUNDS INDUSTRY

TYPE OF EMAILERS THE INDUSTRY SENDS

NFO announcements

Newsletters

Cross sell and upsell products

Daily Quiz

Mascots to simplify the concepts and jargons

Short videos on mutual funds concepts

Series of videos to bring forth investment

planners' perspective

Thought for the Day

EMAIL MARKETING IN MUTUAL FUNDS INDUSTRY

Increases connectivityby reaching to a wider network of IFAs, Investors

and Prospects

Efficient medium to educateIFAs and investors about the product

Non-intrusive way to effectively increase user engagement and build long

term relationship

Attract attentionin a market ooded with hundreds of funds

Cost effectivemarketing channel

Influence purchase decisionsby consistent and personalized

communications (*Research says investors are likely to buy funds that attract

their attention through exceptional performance, marketing, or advertising)

Simplify communicationsrelated to KYC paper work, sending CAS on half

yearly basis

Removes the distribution layersand connecting directly with customer

without relying on agent's skill to communicate

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8/17

netCORE insights: We predict mobile opens to cross 50% by end of 2015. Marketers should

respond to the evolving customer preferences and make their emails mobile compatible

(responsive email).

The following are the key ndings on email marketing by Mutual Funds Industry

from netCORE Research Laboratory.

Email goes mobile: 35% check emails on mobile devices like mobile phones and

tablets

65%

28%

7%

Device Distribution

Fig 1: 35% Mobile opens observed in the Indian Mutual Fund industry

The Indian Mutual Funds Industry emulates the global trend of steady increase in

people accessing email on mobile devices, with 35% of users checking email on

mobile devices. IAMAI also predicts that the number of mobile internet users inIndia will touch 213 million in 2015 from the current 173 million mobile internet

users. Mobile email is on the rise and these numbers reiterate the massive

opportunity for the industry to reach out to customers and scale business rapidly.

RESEARCH FINDINGS AND netCORE INSIGHTS

05


(Source : netCORE Research Laboratory)


9/17


70% of the emails sent in the first quarter of the financial year were

promotional ones.

India's 2014 elections, the largest ever election in the world, set huge expectations

on the investor community plagued with failing economy and falling rupee. Most

mutual fund companies sent promotional emails to aggressively market mutual

funds as protable investment vehicle, fuelled by hope of an economy correction.

Fig 2: Rising markets from April-June lead to an increased promotional emails by Mutual Funds Companies

Informational vs Promotional distribution

100%

50%

0%

JAN FEB MAR APR MAY JUNE JUL AUG SEP OCT

Informational emails Promotional emails

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10/17

Subscriber interest was at its peak during May, with highest open rates of 7.7% &

6.6% respectively for Informational and Promotional emails. During this period, the

equity mutual funds recorded the highest net inows since the past 3 years and

crossed the Rs 2000 crore mark.

May month had the highest open rates of both Promotional and

Informational emails

Open rates

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

JAN FEB MAR APR MAY JUNE JUL AUG SEP OCT


netCORE insights: Calendar your email campaigns based on predicted market movements, to

reach your customers at the right time.


Fig 3: Highest opens observed during the month of May

07




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July was the best month for email campaigns with the average click through

rates doubling

Improving global sentiment and the push for economy reforms back home made

the market upbeat. Investor interest was at its peak and the total equity MF sales4

soared to 17,634 crores, the highest since January 2008.

Click through rates


MAY

0.80%

0.60%

0.40%

0.20%

0.00%

JAN FEB MAR APR JUNE JUL AUG SEP OCT

Fig 4: Click through rates doubled in July

netCORE insights: Plan Real time campaigns based on market movements and customer

sentiment to improve responses.


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4. Association of Mutual Funds in India (AMFI)



12/17


Low Click-To-Open Rate (CTOR) compared to other industries

Email works effectively to increase product awareness. However, the low CTOR (of

5.4%) indicates that subscribers still prefer the traditional route of calling their agent

or going to the branch to invest in mutual funds to buying online. Brands too seem

to concur with this thought and provide a call back number prominently in emails.

Subscribers are most likely to open emails during 10 am 12 pm

Over 491 million emails from different mutual funds companies were analysed for

each user's engagement in deciding the best time to send emails. The typical

distribution of email opens over different time intervals shows that users were most

active on emails during 10 am 12 pm, with open rates peaking to 13.5%. The next

best optimal send time is 8 pm - 10 pm.

Fig 5: 10am-12noon receives highest user engagement

Optimal send times by hour of day

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%2.00%

0.00%

00:00-02:00

02:00-04:00

04:00-06:00

06:00-08:00

08:00-10:00

10:00-12:00

12:00-14:00

14:00-16:00

16:00-18:00

18:00-20:00

20:00-22:00

22:00-24:00

netCORE insights: Time is one of the most important factors affecting campaign performance;

marketers should study subscriber behaviour and send out email when the customer is highly

likely to respond.

09




13/17


Monday and Wednesday get the best response

The best day for sending emails was analysed and each day of the week was

ranked on a scale of 1 to 5 based on email opens and email clicks. A score of 5

represents best day and 1 represents the worst day to send emails. Monday and

Wednesday get the best response.

Fig 6: Monday and Wednesday are the best performing days

Optimal send times by hour of day

netCORE insights: The performance of campaigns during weekends is set to increase with the

increase in mobile opens.

Su

nday

Monday

Tu

esday

W

ednesday

Th

ursday

Friday

Sa

turday

It is observed that Marketers refrain from sending emails on Sunday. The few of

them who have sent on Sunday have witnessed poor performance.

1 5 3 5 2 2 3

score score score score score score score

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14/17


Subscribers are less likely to opt out from mutual funds emails

The low opt-out rate witnessed is indicative that very few subscribers want to

disengage from the email communication. They might choose to ignore or delete

emails rather than opt out entirely as they do nd value coming from these emails.

Fig 8: Substantial number of

customers are Gmail users

Opt-out rate over emails sent

netCORE insights: MSPs make a huge impact on your email campaign success. Test the

campaign on various email clients, especially Gmail before you execute the campaign

60 Cr

50 Cr

40 Cr

30 Cr

20 Cr

10 Cr

0.07%

0.06%

0.05%

0.04%

0.03%

0.02%

0.01%

0.00%

Impact of Gmail on Email Marketing effectiveness

MAYJAN FEB MAR APR JUNE JUL AUG SEP OCT NOV DEC

As Gmai l celebrates 10 years of

dominance in the email space with more

than 500 million users, our research

ndings suggest that Gmail dominance is

signicant even in the Mutual Funds

Industry. Out of the total emails sent over

the entire year, Gmail constitutes 42% of

the market share (less compared to the

average gmail market share of 50-55%).

However, it is a substantial number and the

industry must closely watch for constant

improvements and changes in inbox

delivery rules made by Gmail to improve

customer experience and adjust its email

marketing strategy accordingly.

42%58%

Others Gmail

Signicant Gmail Dominance

Fig 7: Subscribers opting out are less than the industry average of 0.1%

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15/17

FUTURE TRENDS FOR EMAIL MARKETING IN

MUTUAL FUNDS INDUSTRY

As more and more email is being read on mobile, the mutual

funds industry should respond to this changing customerpreference and make their emails easily readable on every

device available. By designing responsive emails, the emailswould look less cluttered, easy to read and create the best

possible mobile experience to customers

Mobile optimization

Increasing awareness and building trust will continue to be theprimary focus of the industry's email marketing programs. Email

will use different elements to educate the investors and IFAs

such as video newsletters, webinar invitations, gamication andanimation to convey the message to the user, enhance theirknowledge levels and encourage sales.

Email marketing will continue to focus on Investor & IFA education

Currently very few brands send out automated emails but this will

soon change with triggered emails having 50% higher open ratescompared to non-triggered emails. Routine batch-and-blast

emails will pave way for intelligent emails that are highly targetedbased on 360 degree customer view that takes into account all

available and meaningful information about customer to engage,retain and drive revenue.

More brands will plan event triggered automated email campaigns

Email communications will include touch points across multiplechannels to create a one-of-a-kind personalized experience to

customers and drastically improve customer satisfaction. Callpatching in emails will enable instant communication between

the investor and his respective IFA agent and improveconversions. Cohesive marketing by using mediums like Email,

mobile, voice & social maximizes the impact, as can be seen inthe Banking, Retail and Travel sectors.

Multi-channel email communications

Even though all the fund houses support online purchase ofmutual funds, they haven't been actively promoting the feature

as customers are wary to invest online. But with the Indianmobile payment market poised for massive growth fuelled by the

increasing number of smartphone users, experts predict thatmore payments and money transfers will be made via mobile.

There will be a shift in focus and mutual funds companies willutilize email marketing to not just educate and engage but also

encourage transactions through mobile.

Email to ease the Distribution and Purchase Process

01

02

03

04

05

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16/17

The Indian Mutual Funds Industry is continually evolving adapting to the investor

needs and changing regulations. The industry leveraged on the phenomenal

internet penetration growth in India to mitigate its biggest challenge of low

penetration and low awareness. Email marketing is primarily used to create

awareness, position the products and become increasingly popular with the

investors. Companies have been continuously adopting new and innovative

approaches in email to retain customer's attention. The industry can utilize theimplications of the research ndings on customer behaviour and effectively align its

email marketing strategy to drive revenue.

CONCLUSION

netCORE Research Laboratory, a dedicated research centre carried out this studyby analysing more than 491 million emails that were sent by netCORE's mutual

funds clients, which includes majority of the top 11 fund houses dominating the

mutual funds market. A survey was conducted to understand the effectiveness of

email marketing for this sector, which included industry leaders, in-house

marketers, agents, investors and prospects as respondents. The data was

analysed for the year 2014 for key performance metrics of email marketing.

Advanced data mining and analytics was performed to capture the user behaviour

on emails and derive useful conclusions that will help build effective email

programs.

METHODOLOGY

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17/17

netCORE is India's largest Email & Mobile Marketing technology provider, offering

solutions for Enterprise Communication & Digital Marketing. Some of the biggest

and best brands in India have been successfully delivering effective email

marketing programs by using netCORE's Email Marketing tool. With more than 3

billion emails sent monthly through Email Marketing platform, the company is at a

unique advantage of being the storehouse of data to observe trends and deliver

valuable insights on email marketing.

ABOUT netCORE

netCORE Research Laboratory is a powerhouse of email scientists who workrelentlessly and solely towards delivering exceptional email marketing. Every day,

a team of Consultants analyse millions of mails being sent, search for patterns and

observe trends. The valuable and meaningful insights from these huge datasets

helps us establish the best practices for email marketing and gives direction to our

clients' email marketing program, helping them stay ahead of competition. The

resources, reach and expertise have helped netCORE develop award winning

email programs for its clients.

ABOUT netCORE RESEARCH LABORATORY

The information contained herein is of a general nature and is not intended to address the circumstances of any

particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no

guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.

No one should act on such information without appropriate professional advice after a thorough examination of the

particular situation. The opinion is based on established criteria and methodologies that netCORE is continuously

evaluating and updating. Therefore, this report is a collective work product of netCORE and no individual, or group of

individuals, is solely responsible for the report. netCORE neither accepts or assumes any responsibility or liability to

any reader of this publication in respect of the information contained within it or for any decisions readers may take or

decide not to or fail to take.

email marketing outlook for mutual fund industry - netcore

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