Part 1 of 10: Be careful using “Offer Codes”

In the US, direct mail to pre-screened customers is still a very important source of new customers in personal banking. In many other parts of the world – that is not the case. For example, in Australia the cost of a direct mailer to a household is about 3-4x the cost in the US – so it’s not nearly as cost effective. In the US however, direct mail is still important.

Additionally, in those direct mailers, you typically have a pre-screened customer – so we have an opportunity to streamline the application and approval process. So how do we do that? We provide a unique identifier, an Offer Code, to the customer in the mailer that they enter in the application form.

We see two common failings in this process:

1. The customer must enter their Name and Address into the application form – but you just mailed them at their home. The use of a personalized mailer carries with it the hope of a streamlined application process…but I need to enter my name (you addressed the offer to ME!) and my address (you mailed the offer to MY HOUSE!) resulting in abandonment.
2. (And this is more important) The Offer Code field is shown on the application form, even for customers that don’t have one.

So, point 1 is self-explanatory. But let’s talk about point 2.

Let’s say you’re applying to our fictitious Vault Bank for a Checking Account. You click the Apply Now button and you’re presented with an application.

 On the first screen you’re asked if you have an Offer Code and if so, to enter it.

 This triggers a sense of FOMO…Fear of Missing Out (ask the nearest millennial what FOMO is ).

 So, you go to Google and type “Vault Bank Offer Code”

 And you get…

 - Ads from nerdwallet.com and bankdealguy.com with other offers

 - Ads from other banks offering great deals on checking accounts

 - 4 Star Ratings so you think maybe you should look elsewhere… 

And so on…you were about to apply for an account with Vault…but that little Offer Code has created FUD – Fear, Uncertainty and Doubt. Now in case you’re wondering if this is hypothetical – through Avoka’s detailed analytics engine Avoka Insights we have evidence that around 4% of all abandonment occurs on the Offer Code field.

But Offer Codes are important and useful. So how do we balance the utility of offer codes for those that have received them VS the damage they do for those that haven’t.

Two words – Vanity URL (OK – so URL isn’t a word…but you know what I mean!).

In the mailer, ask applicant with an offer to go to www.vaultbank.com/offer or something similar and easy to remember (and type). And only if they reach the application form from that vanity URL should you display the Offer Code field.

Otherwise, for those browsing the website and hitting “Apply Now”…don’t show it. Don’t create FOMO, create customers.