How am I doing financially compared to expectations? An experimental comparison of messaging strategies in investor newsletters
International Journal of Bank Marketing
ISSN: 0265-2323
Article publication date: 1 November 2022
Issue publication date: 24 January 2023
Abstract
Purpose
This study aims to investigate which messaging strategies employed in personalised newsletters could be used for improving the propensity of individuals to save or invest and secure their financial well-being.
Design/methodology/approach
The authors conducted a field experiment with 4,782 clients at an Estonian retail bank. For three months (after measuring baseline levels for a month), the participants received personalised monthly newsletters with either a praising or a scolding message based on comparing their recent investment decisions to their past decisions.
Findings
Their results suggest that newsletters could serve as an encouragement for those who already invest significant amounts each month and a reminder for those who have stopped regular investing for a month. The newsletters robustly increased investments in securities accounts for these groups.
Research limitations/implications
The authors contribute to the marketing literature by examining praise and scolding messaging strategies within the same channel and company, focussing on the individual's past behaviour. They raise several hypotheses to be tested in future randomised controlled trials (RCTs).
Practical implications
The authors’ results show the importance of investor behaviour analysis as the effectiveness of the newsletter intervention largely depended on the type of customer it was served to. This highlights the importance of personalisation.
Originality/value
The results show that a given message tends to influence only specific groups of investors. Identifying these groups is valuable information for messaging strategies.
Keywords
Acknowledgements
The authors declare that the research was partly funded by the bank where the study was conducted. They have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
The authors are grateful for LHV bank for facilitating the experiment. They would also like to thank the participants of the International Association for Research in Economic Psychology (IAREP) 2022 conference and the Research in Behavioral Finance Conference (RBFC) 2022 participants for their valuable feedback.
Citation
Pulk, K., Uusberg, A. and Riitsalu, L. (2023), "How am I doing financially compared to expectations? An experimental comparison of messaging strategies in investor newsletters", International Journal of Bank Marketing, Vol. 41 No. 1, pp. 107-129. https://doi.org/10.1108/IJBM-06-2022-0267
Publisher
:Emerald Publishing Limited
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