Email is About Touch Points, Not Content

I was recently having a conversation with a client of ours about email as a communication channel. It was a large brokerage, who had an equally large research operation. I was elaborating on our evolving view of email – how it was the most broadly used application in the capital markets, but had so many issues as it wasn’t ‘verticalized’ for the industry (i.e. not purpose built). That in and of itself is a series of future thought pieces, but the conversation moved to email volume in particular.

For those who don’t know, it’s not unusual for a client to get thousands of emails a day, and I’ve heard numbers that reach up to 5,000 – 10,000 emails per day. Email is overwhelming, partially because you can’t control what’s coming your way. Most clients have over 100,000 unread emails in their inbox and perform “mass deletes” to manage it, or automatically archive everything after 30 days.

As I talked to this firm, we discussed lowering the number of emails they themselves were sending in order to mitigate the email volume issue. As we discussed it, we reached a hypothetical question: “if you could send a client the perfect email every day, with the perfect information in it, would you?” The answer: No. The challenge, as was pointed out to me, is that you would get lost in the inbox. While you would only be sending the ‘one perfect email’, the rest of the industry would continue to send their thousands, and you would never be found.

The industry finds itself locked in a game theory outcome – it’s essentially the prisoner’s dilemma for capital markets. If everyone on the sell side chose to send less email, everyone would benefit. If only some brokerages chose to send less, they would lose a lot, because the rest of the firms would continue to send a lot, and benefit a lot. Finally, if every firm sends a lot of content, everyone loses just a bit. The ideal would be for every brokerage in the world to get more targeted about what content they send, and to send less, but then the rewards for a single firm breaking rank and sending more content would be massive.

So, you may be asking, why does this all matter?

It matters because it means until someone fixes the core email application (which is our long term vision, but we need some time!) then email volumes will not be shrinking any time soon. The industry is stuck. What it means is that everyone is incentivized to continue the previous level of email volumes, or even increase them. In a rational world, any firm that tried to reduce their email volume to clients would be punished relative to their peers.

So, if that then means that email isn’t just about delivering the perfect content experience, what is it good for then? Email is good for touchpoints and to stay top of mind, and better understand your clients.

Email is a massively impactful tool for staying in touch with, and staying in front of, clients,  whether institutional, corporate, or wealth management. You use email to stay ‘top of mind’, to provide asynchronous value (that they can consume on their own time), and to get indications and data points on when the right time to reach out is. Email isn’t about delivering the perfect information at the perfect time – it’s about delivering a constant stream of information, and seeing what resonates. It’s about staying top of mind with your clients and driving engagement. You want to learn about your clients, what they value, and how to service them.

This trend is only accelerating during this pandemic and the resulting lockdown. Everyone is working from home, and while there are some rumblings of major firms returning to the office, I believe that will take a significant amount of time to become material, and I believe it will be much slower to happen on the client side – amongst corporates and funds. Additionally, even when it does happen, I believe we’re going to see a new norm of hybrid remote/office work: three days in office, two days remote, etc.

With everyone working remotely at least part of the time for the foreseeable future, we’re seeing the above hypothesis only further validated. Email volumes are growing massively as the sell side looks to increase the number of email touchpoints they have with their clients, given the diminished number of in-person touchpoints. When you lose one channel, you inherently leverage the others more.

Email is becoming one of the most important communication channels you have with your clients. It might seem like a shameless plug, but it’s true, and it’s going to become more and more important in a remote world, especially when in-person meetings are impossible. The divide between firms who are successfully leveraging this channel, and those who are are not, is only going to grow. There is no way to get out of sending email – it’s simply required – but there is a way to be more intelligent about how you leverage that channel.

Email intelligence is a phrase that is not familiar to the capital markets (although that is changing) but is familiar to essentially every other industry in the world. Email is a touchpoint with your clients – and opportunity to better understand, and better service them. I can think of no better catalyst to push the industry to adopt these new tools than a remote landscape driven by a pandemic.

My advice going into this new era? Make. The. Investment. Invest in email intelligence. You don’t have to use us, but use something. Think about how much your firm previously spent on travel & entertainment, and allocate some of that budget to email intelligence. We literally had one of our clients tell their salespeople that they would have to take our license cost out of their individual T&E budgets – 100% of them agreed. Think about how much time the people at your firm spend putting together, following up on, and managing email. Think about how much of an ROI you would get from even a small improvement on that investment.

While it’s our mission to ultimately rebuild the email applications that exist today, the first step on that journey is to help individuals understand the impact of the email they are producing today, and use email more intelligently. To take their largest client communication channel, which has historically been a blind spot, and turn it into a source of intelligence to better understand and service their clients.

You can’t reduce email volumes – but you can get smarter about how you leverage what you’re sending.

There is no better time than now.

Best of luck out there,

Street Contxt

Hit The Street

Cut through the noise and avoid information overload.