E-Mails Give Schwab Customers More Control Over Portfolios

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After revamping its e-mail alerts to customers as a way to reduce demand on its Web site, Charles Schwab has found that the alerts also are a valuable customer relationship management tool that helps customers better manage their accounts.

"As more people started to go online at our Web site, they were slowing it down," said Vincent Errico, vice president of eCommunications at Charles Schwab. "They were using it to send stock quotes and news to colleagues. So we decided to send it to them by e-mail if they signed up to become a customer. That's how our e-mail alerts program was born."

The effort, which concluded last year, involved not only creating the e-mail alerts but also bringing the management of its marketing departments under a centralized hub. The company used to have separate marketing groups for each of its product lines -- research, stock, news, etc. The groups would act independently, e-mailing customers on their own schedules. There was no focused, concerted effort to coordinate Charles Schwab's e-mail activity.

Charles Schwab worked with e-mail marketing firm Quris Inc., Denver. Quris gathered data on about 4 million of Schwab's most recent customers, including more than 1 million who opted in to receive e-mail.

"With a company the size of Schwab and the amount of data we had to deal with, it was not an easy job," said Gina Lambright, vice president of client services at Quris. "We needed to identify product opportunities and benefits for them."

Charles Schwab now has more than 40 broadcast alerts and newsletters that it sends to customers. The company sends about 1 million e-mails each day the stock market is open.

The company also was concerned it was sending too many e-mails to clients, between the alerts they signed up for and the company's marketing messages. So Errico implemented rules that applied across the board. Though Charles Schwab does not limit the number of market alerts that go out daily to customers, it suspends its marketing e-mails on days of particularly heavy trading.

Not surprisingly, Charles Schwab has found that people who signed up for more e-mails generally trade more than others.

"We offer price alerts in 40 to 50 different flavors," Errico said. "We have opening prices, closing prices, research alerts, news alerts. The number of products people sign up for correlates to more trading.

"Price alerts are the best example. People sign up because they are watching a particular security. They own it and want to sell it, or they own it and want to buy some more."

Errico would not say how many customers signed up for alerts from Charles Schwab. He did say, though, that the company has nearly 7 million retail accounts and that 60 percent to 75 percent are online accounts.


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