Author: Jim Bruene

Create Your Bank’s Facebook Page (before someone else does)

By Jim Bruene Posted on
Categories: Advertising & Promotion, Facebook

Is it just me or is it hard to keep up with all the developments at Facebook? I guess if you are worth $15 billion, you have to keep hustling.

Much of the news out of Facebook has little to do with retail banking. So, you may have overlooked this week's announcement of its new ad platform and promotional tools for businesses and organizations (for a concise, 340-word summary and analysis, see Wednesday's TechCrunch post here).

In the official Facebook press release (here), Chase is listed as one of 12 "landmark partners" in the advertising program. Other than the existing Chase +1 group, with an impressive 40,000 members, it doesn't appear the bank has launched a page yet.

But that shouldn't stop you. To create a Facebook presence, you don't need to be a landmark partner, a mega bank, or even have ten bucks left in your budget. The new company pages are free and you can set one up here in a just a few minutes .

As a test, I built an Online Banking Report page in about 90 seconds (here, screenshot below). It took an hour to show up in Facebook search, so don't panic if it's not there right away (see note 1).

Even if you post only your logo and website address, I recommend doing so right away. That will help ensure that you, and not some crook or prankster, creates the page that's associated with your brand at Facebook. For extra credit, add Facebook to your periodic Web searches to see if anyone is wrongly using your brand name.

As an added payback for my 90 seconds of work, an hour after creating my page, Online Banking Report is the one and only page shown for "banking" searches (see note 2).  

You also have the option of creating pay-per-view or pay-per-click ads to drive traffic to your page. Currently, the advertising is very affordable with prices starting at $0.15 per thousand impressions or $0.01 per click. Ads can be targeted to Facebook demographics.

Notes:

1. When I thought I'd lost my Online Banking Report page, I created a second page for NetBanker here. 

2. There are many other search results for "banking," but Online Banking Report is currently the only one under the new "Pages" designation. Overall, Facebook search is currently pretty weak, but with the $240 mil from Microsoft, it should be state-of-the art by this time next year.  

Share this:

Send Post Twitter LinkedIn Facebook

ING Direct to Acquire Sharebuilder

By Jim Bruene Posted on
Categories: Direct Banking, ING Direct, Investment Products

ING Direct will spend $220 million in cash to buy Sharebuilder, a unique Bellevue, WA-based discount brokerage, with upwards of 2 million accounts across 660,000 customers (see previous coverage here). The deal was first reported in the Seattle PI last week (here) and confirmed yesterday (here).

At an acquisition cost of about $100 per account or $300 per customer, it seems workable at face value. However, both Sharebuilder and ING Direct’s core businesses have historically been relatively low margin, so it will take good execution to make the acquisition pay off.

Many (most??) of Sharebuilder’s accounts have come through co-branded programs with 40 banks and 140 credit unions including National City Bank and Boeing Employees Credit Union. It’s biggest brand name partner is Wells Fargo (see co-branded holiday promotional email from 2002 below), which not coincidentally, is also an investor in the company. It will be interesting to see if the company’s financial institution partners will continue to promote Sharebuilder accounts now that it’s a division of ING Direct.  

ING Direct has offered a small assortment of mutual funds to its customers for years (product page here), but they have not been widely promoted. With the Sharebuilder product, ING Direct will have another tactic to fend off the fierce online competition for high-rate deposits.  

Update (8 Nov 2007): comScore released interesting traffic data on the two companies today. In Sep 2007, ING Direct had 2.0 million unique users and Sharebuilder had 1.1 million and there was only a small overlap of approximately 100,000 users. So the combined entity would have an estimated 3.0 million uniques. However, most of the overlap represents customers of both companies. comScore data shows that 8.4% of Sharebuilder logins in Sep. also logged in to ING Direct that month. That means 50,000 to 60,000 Sharebuilder customers are already ING Direct customers, meaning the net account pickup is closer to 600,000.  

Wells Fargo/Sharebuilder email from 2002 (received 16 Dec 2002)

Wells Fargo Sharebuilder email


Wells Fargo co-branded Sharebuilder new account application (7 Nov 2007):

Share this:

Send Post Twitter LinkedIn Facebook

American Express Plum Card Update

By Jim Bruene Posted on
Categories: American Express, Credit/Debit Cards, Email Marketing, Email Samples, Small Business

As promised in its teaser print buy, American Express delivered my Plum Card invitation in the wee hours Monday morning (2:06 AM Pacific time, see screenshot below). The message, with my first and last name in the salutation, was short and sweet and directed me back to the main website to apply at <plumcard.com>.

It's all first class work, but the generic call-to-action surprised me a bit since I'd put my name on the "wait list" last week (see post here). I expected a more personalized invitation and link. The website doesn't appear to recognize me either (see screenshot below).

Email Invitation (1 Nov 2007)

American Express email invite for Plum Card 

Plum Card homepage (5 Nov. 2007)

American Express Plum Card homepage

Share this:

Send Post Twitter LinkedIn Facebook

Information R/evolution

By Jim Bruene Posted on
Categories: Outside the box

If you are an information junkie, and especially if you went to college before 1995, you'll love this video from Kansas State professor Michael Wesch (see below, note 1). Aside from the The Evolution of Dance and maybe the OkGo treadmill routine, this might be the best video I've ever seen online.  

 

At first, I wasn't sure how to relate it to online finance. But after you watch it, think about what it means in the context of searching for financial information. Internet users, especially those under 30, approach information seeking in an entirely different way now. That has a huge impact on the way financial services will be "sold" in the future. Hint, it won't be from a branch.

Note:

1. Thanks to Duncan Riley at TechCruch (here).

Share this:

Send Post Twitter LinkedIn Facebook

Provident Bankshares Opens New Direct Bank

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Direct Banking

According to story in Wednesday's American Banker, Provident Bankshares, a $6 billion Baltimore, MD-based bank, has opened a direct bank to help reduce customer defections to other online banks (see screenshot below). In testing now, the new unit is slated for official launch in 2008. And unlike many other regional programs, Provident intends to market the new bank within its home market. It even plans to advertise to select visitors on its main website, <web.provbank.com>.  

While the bank risks cannibalizing its own deposit base, it feels that the direct bank, combined with the reputation of the parent, will help stem deposit outflows. The new bank will operate at <provident-direct.com>.

Analysis
I'm not convinced slapping a "direct" on your name and boosting savings rates ten-fold is all that compelling of a strategy (note 1). Sure, FNBO was able to add $1.5 billion in deposits, but only by offering a way-above-market 6% rate until just a month ago (see previous post here).

Dueling websites create channel conflict. Depending on how they are compensated, branch staff will either move everyone into the online-deposit account, or keep it a secret and hope never to be confronted by an angry customer wanting to know why they are earning 75% less in the branch than if they moved their money online.   

However, if Provident can keep costs down, operating the unit as more of a "virtual direct bank," with little additional expense other than a small website and a few dedicated sales/support reps, and figure out how to manage channel conflict, it could pencil out. And the bank can also use the unit to test new products and pricing without impacting its larger customer base.   

Note:

1. Actually, the high-yield rate at Provident Direct is 15 times higher than its 0.3% standard savings rates. But for higher balances, at least $25,000, the parent bank already offers a 4.0% APY money market account, just a half-percent under the high-yield rate. 

Share this:

Send Post Twitter LinkedIn Facebook

American Express Plum Card Uses "Scarcity Marketing"

By Jim Bruene Posted on
Categories: Advertising & Promotion, American Express, Credit/Debit Cards

As a financial services junkie, I've long been a fan of American Express (see note 1). During the past 20 years, as credit cards increasingly became a commodity with no annual fees, loss-leader teaser rates, and look-alike marketing, AmEx has done a superb job maintaining a premium image and pricing. I keep my Gold Card in my travel bag and use it once every year or so when I don't want to expose the numbers of my business MasterCard. But I would never cancel it, despite the $75 annual fee, or I'd lose my "member since 1989" status. That, my friends, is what brand loyalty is all about.

The latest product designed for small businesses, those with "6- or 7-figure revenues," is the Plum Card. I learned about it in a 2/3-page full-color burgundy ad in yesterday's Wall Street Journal (Oct. 31, p. A11). An identical ad appears today (Nov. 1, p. A10). Its standard teaser fare tells readers that the "application releases in 5 days" (today, 4). The bottom of the ad contains a special URL, <PlumCard.com> where prospective customers can get more info. The card was originally announced at an INC 5000 event Sep. 7 (see coverage here).

After seeing the print ads, I and another 100,000 people headed to Google to see what was going on. Wisely, the company purchased not only the top spot on Google for "plum card," but also supported the print buy with an additional twist, "Who's getting a Plum Card? Initial release of 10,000 cards." The novelty of a new financial services product with limited availability, a technique AmEx has used for years with Platinum/Black, should attract click-throughs.   

The landing page (here) continues the theme of anticipation and exclusivity, with get this, a WAIT LIST, to be one of the first 10,000 to receive the card. A countdown timer in the upper right lets me know exactly how much time I have to wait, in this case 3 days, 11 hours and 6 minutes. If I'm not mistaken, that's Sunday night at midnight Eastern time.  

I'm on the wait list, so I'll let you know what I learn on Monday when I receive my application.

Plum Card pricing
There's no argument the marketing is first class, but what about the card itself? Is there anything that AmEx or anyone can do to distinguish themselves in the crowded field of business charge cards?

Time will tell, but it has a unique cash flow and discount plan that could be very appealing to business customers. Users that pay their bill within 10 days receive the industry standard "net less 2%" discount (see note 1). Alternatively, users can pay just 10% of the total due and defer the balance for two months interest free. At that time, the balance is due in full. There is no information in the terms and conditions about an annual fee, but I'd expect one.    

Notes:

  1. If my wife would have been willing to move to NYC, I'd have tried very hard to get a job there after completing my obligatory MBA. 
  2. The 2% discount applies on spending of $5,000 or more; otherwise, the net-10 discount is 1%.

Share this:

Send Post Twitter LinkedIn Facebook

FNBO Direct Brings in $1.5 Billion in Deposits

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Direct Banking, First National Bank

First National Bank of Omaha has attracted $1.5 billion in deposits through its Internet subsidiary, FNBO Direct, launched in February (previous coverage here). 

The numbers were chronicled in a NY Times article earlier this month (here) about the so-called rate chasers, depositors that move money around online seeking the absolute highest rate, even if it means moving the money many times each year.

Total deposits: $1.5 billion

Total accounts: 36,000

Average per account: $42,000

Number of mega-depositors (with $400,000+): several thousand

Deposits of the mega-depositors: approx $1 billion

Deposit of everyone else: $500 million in 33,000 to 34,000 accounts

Average per "normal" account: $14,000 to $15,000 

Now that the 6% APY has dropped to 5.05% (effective Sep. 28), it will be interesting to see how many deposits the bank retains.

Share this:

Send Post Twitter LinkedIn Facebook

The Five Habits of Inefficient Delivery: Are Bank Branches Really Big, Expensive Security Blankets?

By Jim Bruene Posted on
Categories: Branch Banking, Strategies

Ron Shevlin, the Forrester alum who blogs at Marketing ROI and occasionally at NetBanker (posts here), has been on a roll recently with a number of thought-provoking posts that take on the conventional wisdom we hear in meetings, press releases, and other soundbites picked up by the press.

Earlier this month, Ron challenged some of the statements made in the press implying that the downfall of NetBank was caused by its online delivery strategies (here). That initial post led to an interesting discussion culminating in this gem (here) where he takes on the whole notion that banks MUST have branches to acquire new accounts, concluding (words in parenthesis are my additions to show context):

"The inability of the Internet to supplant the branch as the acquisition channel of choice (so far) has very little to do with the inherent superiority of the branch, and everything to do with the (current) inferiority of the online channel." 

And my favorite, this zinger:

In effect, bank branches are just big, expensive security blankets.

Inspired by his post, I've come up with what I'll call the "5 Habits of Inefficient Delivery" (see note 1). 

Habit #1: Customers go to branches to solve service problems.

Expensive solution: Build more multi-million dollar branches to house expensive service reps to sooth frustrated customers. 

Better solutions: (A) Improve the product/service so there are fewer problems; (B) Solve customer problems online in near real-time, not "within 24 to 48 hours"; (C) Empower online support reps to solve problems without forcing the customer to make an hour-long trek to a branch.

Habit #2: Customers go to branches to apply for new accounts.

Expensive solution: Build more multi-million dollar branches and staff them with well-compensated sales agents to transcribe applications hand-delivered by customers.

Better solutions: (A) Develop a killer online sales process that helps customers choose the right option; (B) Provide a user-friendly application with 24/7 online support and solid guarantees. 

Habit #3: Customers feel more comfortable with a bank that has a large branch presence.

Expensive solution: Build more multi-million dollar branches or what Ron calls, "big, expensive security blankets."

Better solutions: (A) Trust your customers and treat them right at every opportunity, and they'll remain loyal no matter how many branches you operate; (B) Keep prices competitive, i.e., no more 10 basis points of interest for a savings account (see here). 

Habit #4: Customers like to use the branch to deposit paper checks.

Expensive solution: Build more multimillion-dollar branches that serve as human-powered ATMs.

Better solution: Until paper checks disappear, use remote-deposit capture, envelope-free (image) ATMs, and instant credit for mailed deposits such as Pennsylvania School Employees Credit Union's (PSECU) Upost@Home (previous coverage here) (see note 2).

Habit #5: Customers go to branches because they are there.

Expensive solution: Build more multimillion-dollar branches to stay within a few minutes' drive or walk for most of your customers

Better solution: Make the online and telephone customer experience so phenomenal and complete that no one misses the branches as they close and consolidate

Notes:

1. For more information, see Online Banking Report, "The Demise of the Branch"

2. On a related note, see PSECU's "Go Branchless" campaign (here)

Share this:

Send Post Twitter LinkedIn Facebook

Online Financial Services Scorecard: September 2007

By Jim Bruene Posted on
Categories: Compete, Metrics & Market Research

Compete online financial sales chart

In April, we introduced the Financial Services Monthly Performance scorecard produced by Compete. It summarizes the overall performance of 23 large U.S. financial institutions and lead-generation sites. Refer here for the detailed methodology as well as companies tracked. 

Commentary
In September, leads for home equity, mortgage purchase and refinance continued to decline. Regular savings accounts also dropped significantly, although the high-yield version savings booked an 8% increase.

Other highlights in September:  

  • Within the deposit category, checking accounts and regular savings declined; however, the high-yield category showed good growth with 137,000 online applications from two million shoppers, 11,000 more than last month.
  • While there were 8% more online credit card shoppers this month, lower conversion rates resulted in a 3% decline in submitted applications. 
  • On the loan side, both home equity and purchase mortgage categories experienced more shopping activity. But once again, a decline in conversion rates resulted in fewer submitted leads/applications. 
  • Refinance mortgages continued to slide in both online shopping activity (down 14%) and submitted leads/applications (down 8%). Several lenders saw double-digit percentage declines.

Share this:

Send Post Twitter LinkedIn Facebook

Advanta Creates Social Network Around Small Business Innovation: Ideablob

By Jim Bruene Posted on
Categories: Advanta, Advertising & Promotion, Credit/Debit Cards, Small Business, Social Media

I don't know how I missed this one, but Advanta, a major credit card issuer with 1.2 million small business customers, launched a new Web 2.0 microsite on Sept. 24 at the high-tech DEMOfall conference (press release here). Just being there amongst the digerati was a coup for the card issuer, but they did much better, managing to come home with a coveted DemoGod Peoples Choice trophy at the conference.

The Web 2.0-laden site is called ideablob, and it's a place where entrepreneurs, inventors, and anyone else can post their business idea and compete for the monthly $10,000 prizes (contest rules here).

One month after launch, the site is generating a fair amount of activity. The eight October finalists showcased on the homepage (see below) have received the following: 

  • 691 total votes (must be registered to vote, can vote on more than one idea)
  • 216 total comments (must be registered to comment)
  • 10,300 total views (anyone can view the idea)

Traffic to the site should grow rapidly once word of the $10k prize circulates. That's a large incentive for the millions of Internet users who think they have a better idea. 

Advanta, which uses fairly subdued branding on the site (see small "inspired by Advanta" under the main ideablob logo), is positioned to gain in three ways:

  • By associating its brand with innovation, social networks, and a Web 2.0 attitude
  • Assuming a good viral kick, and $10k/mo should do it, the site could generate leads more cost effectively than through other channels
  • Publicity in blogs and traditional media

Bank of America launched a good business networking site recently, but without the fun of the $10,000 in prize money (see previous coverage here).

Advanta's ideablob main page (25 Oct 2007)

An idea page

Share this:

Send Post Twitter LinkedIn Facebook

Experian Upsells ChildSecure, Credit Monitoring for Your Kids

By Jim Bruene Posted on
Categories: Credit Reports & ID Theft Protection, Email Samples, Experian

 

Coincidently, the same day I received my first alert from Experian's FreeCreditReport credit-monitoring service (see yesterday's post here), the company revamped its website's account-management area. The thing you notice right away is the focus on upselling subscribers to the new ChildSecure family plan (see first screenshot below).  

The cost is an extra $6.95/mo, which seems like a good value, considering that you can cover all your kids with a single fee. But the total monthly fee on my plan rises to an eye-popping $18.95/mo or $227 annually. That's a significant investment and hard to justify unless you've previously been burned by fraud (for more on the price/value equation, see our Online Banking Report on the subject published in August).  

Screenshots (24 Oct. 2007)
Logging in yesterday, I was greeted with this popup in front of the grayed-out main page.

They also sell it in a huge banner across the top of the main page and a tab for the ChildSecure option.

Finally, here's the page you see after clicking on ChildSecure tab.

Here's the email sent yesterday announcing the website redesign:

Share this:

Send Post Twitter LinkedIn Facebook