Do Consumers Prefer Electronic or Physical Mail?
Insurance Experts' Forum, October 7, 2011
Just when you thought the era of paper statements and communications was on its last legs, a new television ad campaign from the Unites States Postal Service (USPS) suggests people actually like receiving paper statements because they view them as more safe and secure.
The ads are “designed to remind customers that paper mail, unlike email, can’t be hacked, and that letter carriers are still providing reliable and safe deliveries to doorsteps,” says a recent article in the Washington Post. One ad reminds viewers that “a refrigerator [where many of us keep our important paper documents] can’t be hacked” and that “an online virus has never attacked a corkboard.”
That same ad exhorts businesses to give customers “an added feeling of security” that paper statements can provide, showing the customers filing their paper documents away in a manner that suggests they are content with that arrangement.
Why is the USPS doing this? The simple answer is that the Post Office is losing money. According to the Post article, the Postal Service lost up to $10 billion this fiscal year because of declining mail volume and growing labor costs. So, naturally, USPS wants us to do more snail-mailing and less emailing—especially if we are an insurance company, financial institution or other entity that communicates with statements in large volumes.
But does the USPS campaign make sense in the real world? On a personal level, I’m inclined to agree that paper statements do provide additional security on important matters, at least as a physical backup to my electronic statements. While paper may seem a rather fragile medium, there can be no doubt that electronic documents are also easily compromised by environmental factors, software crashes, unauthorized access, or simply having the file’s form factor become obsolete—I still have hundreds of files on large disks that cannot be played on any device built after 1990.
On a more global level, MarketingWeek (a U.K-based publication) reported recently that it had carried out research into how customers in the financial sector prefer to receive their information. “Despite the popularity of internet banking, the clear message was that the vast majority of customers are not happy with purely online communications—they want their statements sent through the post,” the article said.
That report added that for some, this was instead of accessing their details online. For many, it was in addition to their online activity. More than half of respondents (69 percent) chose a combination of paper and online statements and bills as the ideal way to manage their accounts.
So perhaps the USPS has something here. While technology may be king for pundits like me, customer wants and needs are necessarily the most critical factor for any business, especially in areas like insurance and financial services, where customer retention and new customer acquisition are so difficult.
It may well be that continuing to offer paper statements (as opposed to penalizing those who receive snail mail statements—which some companies do) is an investment in keeping your customer base happy.
Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.
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