Everbank’s Latest Email Newsletter

By Jim Bruene Posted on
Categories: Email Marketing, Email Samples, Everbank

Everbank <everbank.com> has been an active emailer, sending a newsletter every few months for the seven years I've maintained an account there. The newsletters have always been chock full of content, from general finance topics to detailed discussions revolving around the bank's unique currency- and commodity-related products.

The newsletter design has evolved with the times, from plain text in the 1990s to the well-designed HTML missive we received last night (see below). The short headlines letter encourages customers to click through and read the full document at the Everbank website (see End Notes).

Email Sample
Date/Time: Oct. 11, 2006, 8:59 PM (received 10:24 PM Pacific Time)
From: EverBank [service@everbank.com]
To: James
Title: Are commodities worthy? Find out in the latest EverBanker newsletter
Personalization: Dear <firstname>
Signature: EverBank Customer Care

Everbank Oct newsletter CLICK TO ENLARGE

Analysis
Email
There is little to criticize. The short email is direct and to the point. Its layout lends itself well to viewing within the preview pane. The small "did you know" box adds an element of interest, and the drop-shadow makes it stand out. 

With four major articles, it makes sense to send just the headlines and ask the reader to click through to the website to read the full article. However, the bank should use the standard convention of hyperlinking each article directly to the appropriate place on the website.

The bank does include two hyperlinks to the Web-based newsletter, a "click here" in the first paragraph and a "read it today" at the end. However, for even better usability, the bank should add a big shiny button that leads directly to the Web version.

Web-based Newsletter
The website demonstrates good usability in its layout and content. A synopsis of each article is provided on the main page and users click through to read the complete article. It's useful and well-written information, better than a lot of what you read in mainstream consumer-finance publications. We especially liked the "whatever happened to" look-back at some recent initiatives, such as Check 21, and the overview of consumer-protection laws.

As good as the newsletter is, we couldn't stop thinking that it would work much better as a blog. That way, readers could pursue subject threads and more easily peruse all that Everbank provides. The bank could also experiment with accepting comments to make the whole experience more interactive.

Overall grades:
Content: A+
Email design: A-
Website (newsletter) design: A

End Notes
Click on the following link to see a screenshot of the newsletter landing page.

Newsletter Landing Page (here's the link)

Everbank_newsletter_11oct06_landing_1

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U.S. Bank Adds Payday Loans to Online Banking

By Jim Bruene Posted on
Categories: Loans & Credit, Strategies, US Bank

Here's something we hadn't expected, payday loans from a major bank delivered through its online banking program. Minneapolis, MN-based U.S. Bank, not known for its pioneering work in online banking, quietly added payday lending to its platform recently.*

How it works
Users are alerted to the feature through a green link at the top of their checking-account transaction detail (see below).

DDA trans detail CLICK TO ENLARGE

Clicking on the link returns the well-designed "advance" pop-up screen where users can elect to take an advance from their next paycheck or from one of their pre-existing credit accounts (see below).

After selecting payday advance, users choose the amount and then follow the instructions to complete the loan. Funds are moved in real-time with no credit check. Since we don't have a direct-deposit paycheck, we didn't expect to qualify for an advance. However, we did receive a token "advance limit" of $80 (see "Available Credit" in lower-right box below).

Pricing & Disclosures
The advances are priced at 10% of the advanced amount, with a $20 minimum advance. Advances are automatically deducted from the checking account in one month if not already repaid. The APR if the amount is outstanding for the full month is 120%. Only one advance can be outstanding at a time.

In our example below, we chose a $20 advance and were required to repay $22.

The program is well-disclosed with a lengthy FAQ and Disclosure Statement (click on the continuation link at the bottom to see these documents).

Analysis
Putting an advance button at the top of checking-account transaction data is a great idea. However, at least in our case, the bank's implementation was questionable. Although we maintain as low a balance as possible in this checking account, we often run $10,000 or more through it. Also, we have an open credit limit of $20,000 on a U.S. Bank credit card linked to this account. Offering us an $80 advance limit is ridiculous.

Also, we're not sure that online payday lending is strategically very smart. Why charge 120% APR on small advances of one-month duration, risking customer and press backlash, when you could instead upsell an overdraft line of credit with a reasonable APR? 

The bank would stand to make much more on a reasonably priced overdraft line of credit, which could be delivered nearly as seamlessly. For example, a $2,000 outstanding balance on an 18% line of credit would provide $200 or more of annual profit vs. about $40 for a pair of $200 advances. And the customer will likely be more satisfied with the credit line. 

Although the bank demonstrates in its disclosures (see notes below) that its program is less expensive than an NSF fee or a typical payday loan, the 120% APR will likely create a bit of a furor with consumer advocates lambasting the bank in the press. It appears to have escaped notice so far.   

U.S. Bank deserves a pat on the back for its innovation, but without more consumer-friendly pricing, the payday-advance program may backfire on them.

*We have several accounts at U.S. Bank and noticed it this week for the first time.

End Notes (click on the following link for more information):

Program Disclosures

Usbank_ddaadvance_terms

Program FAQs

Usbank_ddaadvance_faq

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Will Google Create an Online Quicken Clone?

By Jim Bruene Posted on
Categories: Personal Financial Management, Strategies

Google_docs_logoGoogle hit the news today with a modest improvement to its online word processing and spreadsheet services, combining them in an umbrella offering called Google Docs (see TechCrunch analysis here).

Clearly, the Web giant hopes to convert millions of casual users from Microsoft Office to its ad-supported services. If they make headway in word processing, it's only a matter of time before they offer more specialized software applications. One area likely to be seriously considered is personal finance management, dominated today by Intuit's Quicken and Microsoft Money.

Budget_snap_logopig It would be relatively easy for Google to jump into the market. For a few million, it could acquire one of the personal finance startups such as BudgetSnap (see Sep 12) or Foonance (see Aug 10). Or it could build a service by licensing Yodlee's MoneyCenter (see July 5).

Analysis
What impact would this have on financial institutions? For banks with basic "plain vanilla" online banking, it could be a major threat if users began storing their banking transactions at Google, especially if the company offered automatic pre-scheduled downloading, which is likely. Users would log in to their banks far less often, diminishing the opportunities to cross-sell and service customers. And with the transaction archives stored elsewhere, it would be much easier for consumers to switch banks, reducing the relationship value of online banking and bill pay.

To avoid being marginalized by online personal-finance services, banks should boost their feature-set to include basic financial-management features, such as payment categorization, long-term storage, and reporting. Consumers have little desire to store confidential information with a Web-based company; however, if you don't provide obvious features, such as transaction storage, users will look elsewhere.

For more information
Our previous coverage is here. And for those wanting a detailed look at online personal finance, read our recent Online Banking Report #131/132, "Personal Finance Features for Online Banking" (subscription required).   

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Majority of Banks Offering High-Yield Savings are Traditional Brick-and-Mortar Institutions

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

Bankunited_savingsSavings accounts paying 5% or more are a sweet spot for consumers by allowing them to beat inflation with little risk. According to Bankdeals blog, <bankdeals.blogger.com>, 22 U.S. banks are currently paying 5% or more on consumer savings accounts (see BankUnited's "Sweet Rate" in inset).

While there's been much talk about online-only banks and their competitive threat, only 4 of the 22 fit this definition. The other 18 are traditional branch-based banks, often marketing the higher yielding accounts through direct banking brands such as HSBC Direct (see 26 Aug 2005), MyBankingDirect from New York Community Bank, or the latest entrant Grand Yield Direct from Apple Bank for Savings (see Sep 27). 

The traditional banks are evenly split on how they market the higher-yield product. Ten use a separate brand which is often not mentioned on their main website. Six of the ten simply append a "direct" to their main brand. The other eight market high-yield accounts online under their normal brand, but two (Zions and Wamu) hide the higher rate accounts from users of their main websites. 

Here's the list as posted Oct. 7 at BankDeals:

Pure direct banks with little or no branch network (minimum balance to earn rate, if more than $1,000):

Direct brands of traditional banks (parent):

Traditional banks with links to the high-yield account from its main website:

Traditional banks with "secret" online-only offer (not linked to regular product pages):

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The Money Store’s Comeback Marred by Flawed Website

By Jim Bruene Posted on
Categories: Loans & Credit, Website Usability & Design

Flipping through a pile of American Bankers on the plane last night, I came across a page one story on The Money Store <themoneystore.com>. If you've been in the business at least ten years, you probably remember the sub-prime lender that created a household name for itself with heavy TV and print advertising featuring baseball great Jim Palmer and others. But shortly after First Union (now Wachovia) paid $2.1 billion for it in 1998, its sub-prime portfolio tanked and the bank shut it down in 2000.

Why First Union/Wachovia didn't use the famous Money Store brand for other lending pursuits is a mystery, but I'd wager that after blowing a couple billion dollars on the acquisition, senior management, and shareholders, didn't want to hear that name ever again. 

Fast forward five years. MLD Mortgage, a NJ-based lender founded by former Money Store Vice Chairman Mortan Dear convinced Wachovia to sell him the Money Store brand name. The brand was then repositioned as an online loan exchange along the lines of LendingTree, brokering mortgages for 50 lenders including Washington Mutual, NetBank, and Flagstar Bank. 

Analysis
The use of the Money Tree name is good, although they absolutely must secure the <moneytree.com> domain name. The online loan-exchange business model is sound, and its lending partners offer good credibility. However, the company's website execution is deplorable.

The busy home page doesn't even mention the product it sells (see screenshot below). We could write an entire report on what's wrong with the site, but we'll review just one small section here to give you an idea of the problems.   

At first glance, the "three simple steps" graphic in the upper-left looks promising, although the type should be bolder for readability (see inset).

As users struggle to understand what the company offers, many will start here due to its location, color, and shape. Unfortunately, most users will become even more confused after reading it due to three significant usability errors:

Mistake #1: Scaring off potential customers. The goal of a financial website is to make users confident in transacting there. Money Tree does the opposite. The very first thing users see is step 1, "Provide your personal information." In today's paranoid times, that's a huge red flag from a relatively unknown website. Before you cause even a smidge of user-apprehension about the application process, you must make visitors want your product. Try starting with a benefit statement such as "lower your mortgage payment" or similar.

Mistake #2: Amateur copywriting with no benefit statements. Always use a professional copywriter, even for bullet points. The Money Store is obviously cutting corners here. For instance, the first line above says "price your loan today." That makes almost no sense to a consumer. It's industry jargon. It should be a benefit statement, like "lower your mortgage rate today" or something similar that can be easily grasped. My fifth-grader could have come up with a better opening line.

Mistake #3: Steps that lead to the wrong product. For the life of me, I can't figure out what the company was thinking with its third step. Here's a synopsis of the three: 
1. Provide personal info.
2. Select product
3. Get your credit score
Huh? Are they selling credit scores or saying you need to go somewhere else, find your credit report and then finish the process? Either way, they are going to lose just about anyone that's gotten this far.

Instead, the steps should lead to a recognizable benefit such as:
1. Tell us what you want
2. Compare all the great prices we'll provide
3. Choose the deal that saves you the most money
4. Enjoy your extra cash!!

The Money Store homepage (Oct. 9)

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Bank Blogging Coming to Corporate America

By Jim Bruene Posted on
Categories: Bank 2.0, Blogs, Metrics & Market Research

While the number of external blogs at U.S. banks and credit unions can be counted on your fingers today, that won't last. Here's the eight we've heard about:

Source: OpenSourceCU.com, Online Banking Report

Trends
First Tech CU blog CLICK TO ENLARGE The New York Times reported last Wednesday on the expected explosion of business blogging. Citing statistics from Nancy Flynn, director of the ePolicy Institute and author of Blog Rules, it is estimated that only 4% of major corporations operate external blogs today. However, 85% more plan to do likewise. Among small business, 10% have already incorporated blogs into their marketing plans. 

Bank blogging forecast
We are in the process of developing a blogging forecast for release in November's Online Banking Report. Our preliminary estimate is that within two years, there will be at least 500 bank and credit union blogs.

It's no suprise that credit unions would jump on this trend; it fits right in with their membership and community focus. For example, Seattle's Verity CU has been blogging for almost two years (see 29 Aug 06). The unexpected first mover among major financial institutions is Wells Fargo (see 23 Sep 06), which has two blogs and six months' experience under its belt.

Action Items
If you pride yourself on having a state-of-the-art website, you'll want to add a blog in 2007. You can start with something relatively simple, such as First Tech Credit Union's news and announcement service. Then you can graduate to the more advanced versions with real personality, such as Verity Credit Union's and Wells Fargo's Student Loandown.

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New Instant Voice Messaging Service Combines Voice/Text Messages

By Jim Bruene Posted on
Categories: Alerts & Messaging, Service

Startup Pinger <pinger.com> launched a service last month that makes it easy to send voice messages to mobile phones or computers along with an email or SMS alert.

It combines the immediacy of instant messaging, the functionality of email, and the more personal nature of a voice message. And it's free.

To use the service, which is currently in public beta, users upload recipient email addresses to the Pinger server where communication preferences are stored. Voice messages are created using any phone or a PC microphone.

The San Jose, CA-based firm received $3 million in funding from A-list VC Kleiner Perkins in Nov. 2005.

How it Works
To send a message from a phone, you simply call the service, say the name of the recipient, record the message, and hang up.

To send a message from a PC, you select the recipient from your address book, record the message on your PC microphone, and send. 

Either way, the recipient is notified via SMS and/or email. If on a mobile phone, they dial the number in the SMS message and listen. If at a PC, they can click on the link and listen to the message on their PC speakers.

The recipient can sort, replay, forward, store, and even reply via voice to the messages, which makes them as functional as email.

Pinger demonstrated the service last week at Demo's fall conference (see the demo here).

Pinger instructions CLICK TO ENLARGE

Financial institution opportunities
With believability of financial emails at an all-time low, short voice messages could be more effective for complex information, such as explaining options to someone late with a loan payment, or who has just been given a credit line increase.

And since many banks have stopped using links in their emails due to phishing concerns, voice messages could be used to say, "See us on the Web at www.yourbank.com/loans" or "Log in to your account and go to the Your Loans tab."

The novelty of the voice message will also provide a boost to marketing efforts, at least temporarily. The first few messages are likely to generate quite a bit of interest, until users learn to ignore them like other marketing messages.

Voice messaging isn't for everything. Routine information, such as balance alerts and deposit confirmation, should continue to be sent via text only.   

It's yet to be seen whether Pinger takes off. But it's a safe bet that something similar will soon enter the lexicon along with Googling, IMing, and texting. With dozens of voice-over-Internet-protocol (VOIP) startups challenging the bigger players, such as Vonage and eBay's Skype, we are sure to see interesting, cost-effective new ways to reach customers.

For more information:

  • TechCrunch article on new VOIP providers here
  • Coverage at Under the Radar blog here
  • Short article in New York Times Sep. 27 here

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Amazon.com Uses Feedback Link to Measure Effectiveness of Customer Service Responses

By Jim Bruene Posted on
Categories: Alerts & Messaging, Service

Email response from Amazon customer service with links to rate the answer CLICK TO ENLARGEHoping to download a movie to watch on the long Seattle-NYC flight, I sent Amazon an email with a question about its new Unbox video service. Not only did they answer within the hour, they also included a link to indicate whether the answer solved my question or not. 

Choosing the "yes" option, I was delivered to a "Thanks for your feedback!" message, which not coincidently put me back onto the Amazon site. The thank-you also contained a link to provide additional feedback.

Landing page after selecting "yes my question was answered" CLICK TO ENLARGE

Following that link leads you to a page to provide detailed comments:

Form to provide additional feedback CLICK TO ENLARGE

If you responded "no" to the original question, you are taken to a similar page to rephrase the question (see below).

Analysis
This simple feedback mechanism provides five important benefits:

  1. Demonstrates you actually care whether the user's problem is resolved satisfactorily
  2. Allows customer to easily submit another question if not satisfactorily resolved
  3. Allows you to quantify the performance of the service department
  4. Identifies areas where better answers are needed
  5. Helps identify tricky problems that can be corrected

All financial institutions should consider similar techniques for improving electronic customer service.

Now, if only the Amazon video-download service were as efficient as its service reps. First, it took two tries to get the player downloaded. Then the 90-minute, 1.7 GB movie took nearly eight hours to download via my Wi-Fi connection to our Comcast cable modem, never going much faster than 80k per second. Bottom line: For $2.99, it's still worth doing, provided you plan far enough in advance.

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Apple Bank Joins the High-Yield Savings Game with Grand Yield Direct

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

Google_highyield_25sep06_1Yesterday, a new advertiser appeared at the top of Google searches for "high-yield savings accounts (click on inset for closeup)," Apple Bank for Savings <theapplebank.com>. The New York-based thrift is marketing the 5.25% APY account under the brand name, Grand Yield Direct <grandyielddirect.com>.

To market the account, the bank uses a single-product microsite powered by Digital Insight (see screenshot below). The Apple Bank name and logo appear in the lower-right corner in a subtle graphic image, but there are no links back to the main bank site. The online application is hosted by CashEdge (click on continuation link for screenshot).

The new product joins an increasingly crowded field that just two years ago was owned by ING Direct. Just yesterday, E-Loan launched its 5.5% savings account (see NB 26 Sep).

Applebank_grandyield_1

First page of the online application hosted by CashEdge

Applebank_grandyield_appfromcashedge

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E-Loan Launches High-Yield Deposit Line

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, E-Loan, Popular Inc.

Eloan_logoSix months after announcing its intention to enter the direct-banking deposit market (NB 29 March), Popular Inc. launched a 5.5% deposit account through its E-Loan subsidiary. The fee-free account requires a $5,000 minimum opening deposit. The rate drops a quarter-percent if the balance falls below $5,000. The news was covered this morning in American Banker and The Wall Street Journal.

Popular execs clarified the timetable of its $3 billion deposit goal, saying it hoped to bring in that amount within a year. With few U.S. deposits to cannibalize and no branch network, the company expects to be aggressive with its pricing. To prove the point, it launched today at 5.5%, a full half-percent higher than Citi's E-Savings (NB Jun 26), Wamu (NB Sep 21) and HSBC, and a quarter-percent above Countrywide (NB Sep 20).

Eloan_home_savings_partial

The Delivery
The E-Loan homepage has been remodeled to include a Savings tab across the top and a deposit box in the middle of the page (click on inset for a closeup; click on continuation link below for a screenshot of the entire homepage). There is also a high-yield savings category in the drop-down menu in the upper right.

The main savings page is laid out in a modern style with clear rate and APY in the upper right and the beginning of the online application on the lower-left side (see screenshot below).

Eloan_savings_main

Analysis
Since this had been expected for six months, there's nothing earth-shattering here. The decision to market deposits under the E-Loan brand makes sense given its awareness level online as demonstrated by the four million loan applications since its 1997 launch. It will take some advertising and promotional efforts to make consumers aware that the pure-play lender is now in the deposit business. But it will be less expensive than if Popular had tried to create an entirely new brand.

E-Loan has not yet begun marketing on savings terms at Google, but they'll likely have to join Citi, Wamu, HSBC, Emigrant, ING Direct and others if they are serious about making the $3 billion goal.

New E-Loan homepage with "Savings & CD" tab

Eloan_home_savings

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Wells Fargo Blog is Off to a Good Start

By Jim Bruene Posted on
Categories: Blogs, Loans & Credit, Student Loans, Wells Fargo

Wells_blog_homeAfter a slow start, with no new entries during its first week, the student loan blog from Wells Fargo is off and running. Since its Sep. 5 launch, the site has averaged about two posts per week, each running 300 to 400 words, a good length. (See inset for jump page to the bank's two blogs, <blogs.wellsfargo.com>)

Furthermore, the writing is surprisingly good, with little corporate-speak, a trap that's so easy to fall into when every word has to be approved by a team of attorneys and compliance officers. Interestingly, the one off-topic post, written by the freelancing college-student mom, Caroline Hansen, was pulled from the site a day or two after it was posted. Either her step-daughter, or more likely, Wells Fargo management didn't like the story about her new tattoo.

The site is obviously aimed at parents, with warnings about credit card abuse and an instructive post about transferring money online to pay for a $573 book tab (ouch!).

While the bank does a good job of not blatantly pitching its products, it seems that most links within the posts lead to a wellsfargo.com page. The blog would have more credibility, and readership, if it linked to more outside resources.

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