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INDIAN MUTUAL
FUNDS INDUSTRY
EMAIL MARKETING
OUTLOOK 2015 for the
7/23/2019 Email Marketing Outlook for Mutual Fund Industry - Netcore
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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%
02
Copyright 2015 by netCORE Solutions. All Rights Reserved
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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
03
Copyright 2015 by netCORE Solutions. All Rights Reserved
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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
04
Copyright 2015 by netCORE Solutions. All Rights Reserved
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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
Copyright 2015 by netCORE Solutions. All Rights Reserved
(Source : netCORE Research Laboratory)
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RESEARCH FINDINGS AND netCORE INSIGHTS
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
06
Copyright 2015 by netCORE Solutions. All Rights Reserved
(Source : netCORE Research Laboratory)
7/23/2019 Email Marketing Outlook for Mutual Fund Industry - Netcore
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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
Informational emails Promotional emails
netCORE insights: Calendar your email campaigns based on predicted market movements, to
reach your customers at the right time.
RESEARCH FINDINGS AND netCORE INSIGHTS
Fig 3: Highest opens observed during the month of May
07
Copyright 2015 by netCORE Solutions. All Rights Reserved
(Source : netCORE Research Laboratory)
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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
Informational emails Promotional emails
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.
RESEARCH FINDINGS AND netCORE INSIGHTS
08
Copyright 2015 by netCORE Solutions. All Rights Reserved
4. Association of Mutual Funds in India (AMFI)
(Source : netCORE Research Laboratory)
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RESEARCH FINDINGS AND netCORE INSIGHTS
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
Copyright 2015 by netCORE Solutions. All Rights Reserved
(Source : netCORE Research Laboratory)
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RESEARCH FINDINGS AND netCORE INSIGHTS
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
10
Copyright 2015 by netCORE Solutions. All Rights Reserved
(Source : netCORE Research Laboratory)
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RESEARCH FINDINGS AND netCORE INSIGHTS
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%
11
Copyright 2015 by netCORE Solutions. All Rights Reserved
(Source : netCORE Research Laboratory)
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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
12
Copyright 2015 by netCORE Solutions. All Rights Reserved
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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
13
Copyright 2015 by netCORE Solutions. All Rights Reserved
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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.