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Citi Markets e-Savings in Amazon Packages

By Jim Bruene Posted on May 8, 2006
Categories: Advertising & Promotion, Citibank, Deposits, Checking, Savings, CDs

The new headphones for my son’s eleventh birthday arrived last week with the usual advertising fliers dropped into the Amazon.com box. One of the three products caught my eye, a 4×6 glossy sheet advertising Citibank’s 4.5% e-Savings account. It looked much like their online ads with a blue-and-white theme emphasizing the APY (see right).

On the back, four benefits were highlighted:

Free Online Bill Pay
Online Fraud Protection
Free Wireless Alerts
Online Statements and Check Images

Notice how the 13 words of benefits included “free” twice, “online” twice, along with the positive buzzwords “wireless,” “fraud protection,” and “check images.”
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The bank used an easy-to-remember URL <offer.Citibank.com> with offer code CSA2 (click on inset to see the Citibank offer site prior to inputting the offer code). The fine print contained the usual requirement that it was not available in Citi branches. Interestingly, the bank elected to forego the usual toll-free number option.

—JB

Marketing Database –

If you'd like to learn more about past interactive financial marketing campaigns, check out the Interactive Financial Marketing Database from our sister publication, the Online Banking Report.

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Citibank’s Forecast for Online Savings

By Jim Bruene Posted on May 5, 2006
Categories: Citibank, Deposits, Checking, Savings, CDs, HSBC Direct, Metrics & Market Research

In an effort to boost awareness of its 4.5% e-savings account (see NetBanker March 29), Citibank made the unusual decision to reveal its 5-year forecast for industry-wide sales of online savings accounts. In today's New York Times, Citibank.com director Catherine Palmieri made the following market size estimates:

$250 billion in 2006
$600 billion in 2010

To put the numbers in perspective, the 2006 estimate is approximately four times the total deposits of the two biggest direct banks, ING Direct and E*Trade. And it's about 4% of the total U.S. deposit market of $6 trillion.

Assuming Citibank is right and the online savings market grows at a compounded rate of 25% per year, it will represent 10% of today's total deposits or 8.5% of the total $7 trillion in total deposits 2010, assuming a 3% annual growth rate.

The article also said that HSBC Direct is on track to have 250,000 accounts by the end of this year.

Googling "online savings accounts" from a Seattle IP address today found Citibank in the number seven position. Here were the top advertisers (see inset above for closeup):

1. HSBC Direct
2. Emigrant Direct
3. Capital One
4. American Express
5. E*Trade
6. Alaska USA Credit Union (Seattle local ad)
7. Citibank Direct

—JB

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Notes from BAI’s SmartTactics Conference

By Jim Bruene Posted on April 24, 2006
Categories: BAI, Bank of America, Citibank, Yahoo, Zions Bank

Several interesting tidbits surfaced from today's presentations at BAI's SmartTactics conference in Las Vegas:

Citibank online account acquisition
In 2002, 6% of Citibank's new checking accounts were generated online; in 2005, the number was 20%.

Our comments: Keep in mind that Citi's experience is unique. It has a huge brand and relatively small branch network, so many of its new accounts have no choice but to open online, or over the phone. And part of the growth can be attributed to non-checking products, such as its high-yield savings, that REQUIRE a companion checking account.

Bank of America's SiteKey rollout
The rollout of mandatory two-factor authentication is complete, except in Oregon and Washington where it is expected to go live in June. Prior to becoming mandatory, users had a period of time where it was an optional feature; however, only 8% opted in during this phase. When the PassMark-powered system became mandatory, users were served notice during their first two logins that they needed to sign up before it became required on the third login. Only 4% signed up during the first two warnings, and 96% put it off until the third try.

Note: PassMark was acquired by RSA Security today.

Our comments: Taken together, only 12% of users opted for stronger security before it was required, far below the 60% or so that say they want more security in consumer-research studies.

Zions remote deposit-capture results
Zions Bank has grown its remote-deposit client base from 364 in January 2005 to 3,697 in January 2006, and they are adding nearly 100 clients per week. The bank has bagged more than $200 million in incremental deposits and has increased loans and fee income. The Utah bank is now looking for new business worldwide with clients in 49 states and five countries outside the United States. It has clients of all sizes, from the Fortune 500 to small businesses that use it for just one check per month.

Our comments: If you needed ammunition to move this up the priority list, keep your eye on Zions: It said that its main problem now is just keeping up with the all the requests.

Research results from Yahoo Search Marketing
A Forrester study of all U.S. banking customers (not just online bankers), commissioned by Yahoo and OgilvyOne Worldwide, found that 61% of all banking-product research is being done online vs. 5% via phone and 30% in branch. Similarly, 64% of account monitoring is now down online vs. 16% via phone and 13% in-branch. But account opening at branches still dominates at 84% of new account openings, compared to 14% online and 2% via phone.

Yahoo also said they expect 50 million online credit card applications in the United States this year.

Our comments: Wow, time to pull out all the stops in your online account-opening initiatives.

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Citibank’s 4.5% Direct Banking Savings Account

By Jim Bruene Posted on March 29, 2006
Categories: Citibank, Deposits, Checking, Savings, CDs, Direct Banking

In more direct banking news,* Citibank landed all over the media with the launch of a 4.5% no-minimum-balance savings account. A Citi checking account is required to qualify. The reason for the media attention had nothing to do with the rate, and everything to do with the channel conflict inherent in the offer.

The first line of fine print under the offer was (click on screenshot below for closeup; click on "Continue reading…" below for the full text of the mousetype):

This offer is not available at Citibank financial centers

Many stories contained an inaccurate observation that Citibank was launching an entirely new Internet bank. This inaccuracy seems to have its roots in the Reuters wire piece that first discussed the savings account offer.

The truth: This is NOT a new bank. It’s NOT a new website. It’s NOT even a strategic shift for Citi, which has previously made high-rate deposit offers to online customers (see OBR 120/121). This is simply a new advertising campaign targeted to online users, especially those frequenting Yahoo’s homepage (click on inset to see the ad positioning).

Any of Citi’s existing 2.5 million online banking customers can open the account by logging in to online banking and selecting "open an account" and following the directions. A small link in the lower right of the landing page directs existing Citi customers to these instructions.

Initial funding can be made by mail, credit card, debit card, or ACH (electronic interbank funds transfer). After the account is open, additional deposits can be made at Citi ATMs or through IN-BRANCH deposits.

Analysis
You’ve seen high-rate savings account offers before. There is little new here. What can you really say about a savings account once you deal with the rate and the balance requirement?

What sets Citibank apart in this instance is its near-perfect sign-up form (click on inset right). The page is dominated by a banner promising that it will "take 10 minutes & 4 simple steps." The bank backs that up by showing the four steps immediately below the banner.

Tell us about yourself
Confirm your identity
Fund your account
Provide your E-Signature

Although these steps are the same as what thousands of banks have done for years, Citi’s language is exceptional in its clarity and how it addresses consumer fears. The "confirm your identity" demonstrates the bank’s commitment to stopping fraud. The "provide your e-signature" lets customers know they won’t have to mail some old-fashioned signature card to the bank before they can start enjoying the new rate.

The bank also uses several other devices to ensure that customers feel confident about acting on this offer:

"We care about your privacy and security" box with link for more info (upper left)
VeriSign clickable logo (left)
Ability to save and complete the application later (upper left)
Ability to print a blank application to mail in (upper left)
Link to account details and fees (upper right)
Link to live chat or toll-free number (right)

But we called this "near-perfect" for a reason.

There are several concerns not addressed on this page:

Timing: How long will it take before my initial deposit starts earning 4.5%?
Guarantee: Even though they address the need to confirm your identity, the bank doesn’t come right out and guarantee the safety of the process.
No reinforcement of account benefits: Although it’s been only a few moments since the customer navigated to this page, don’t let them lose sight of why they should go through the uncomfortable process of typing their personal details into a browser that may or may not be transmitting their keystrokes to Uruguay. Keep that 4.5% number right in their face.

Another weakness: navigation overload. Citi has included its full My Citi personal navigation across the top along with all the site utilities in the upper right. While this is helpful for research purposes, it tends to be distracting and will pull customers away from the savings account application.

Final Grade
Despite a few minor weaknesses, it’s impressive work. Definitely scores an A and is closing in on A+.

Web address for offer: http://direct.citibank.com/CBOL/06/esavings/default.htm?

*We’ve started a new Direct Banking category for Financial Marketing Week, so you can easily find all the articles on the topic with a single click.

Continue reading “Citibank’s 4.5% Direct Banking Savings Account” →

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Citibank using Google to Pitch Credit Monitoring

By Jim Bruene Posted on February 20, 2006
Categories: Citibank, Credit Reports & ID Theft Protection, Google, Search Engine Marketing

Since the dawn of the online credit bureau era (1997/1998), online credit report marketing has been dominated by the specialists: Experian, Equifax, TransUnion, ConsumerInfo.com (now owned by Experian), Fair Isaac, Intersections, and others.

Now, financial institutions are becoming more involved. For example, Citibank’s AdWords spot pitching its Credit Monitoring Service showed up fourth overall (and second in the right-hand column) in a search today for "credit report monitoring" on Google (click on inset right for a closer view). With 84 advertisers vying for space on the first page or two of results, that’s expensive real estate.

Citi’s $9.95/mo service (after one free month) is powered by Intersections <intersections.com> and includes info from all three credit bureaus, daily alerts based on Equifax info, $20,000 in identity theft insurance, and other benefits (see screenshot below for a full listing).

Another surprise advertiser in the category is Wal-Mart whose ad appears in the sixth position along the right side of the search results (see inset above). The retail giant’s $7.46/mo service is co-branded with TransUnion’s TrueCredit (click here for screenshot).

Analysis
We are big fans of credit report monitoring, having personally used it for more than a decade. And while the service does deliver significant value, we think the single $9.95/mo price point is too high for the mass market. Granted, ten bucks is better than the $14.95/mo charged by TransUnion’s TrueCredit for a similar service (see inset for an email received today). But the $120/yr is simply too much for information that can be extracted relatively easily by consumers themselves.

Better would be a multi-tiered offering: Regular/Gold/Platinum that starts at under $5/mo and peaks at $9.95/mo for an individual, $14.95/mo for a family. That way, more customers would receive the benefits of proactive monitoring while the truly paranoid could use the pricier options for added peace of mind.

Another puzzling aspect of Citi’s service: it’s impossible to find it through the home page. It not only lacks its own link in the product menus, but also comes up blank in searching on "credit report monitoring" or even "credit reports." You shouldn’t have to use Google to find such an important service, especially at a bank that’s spent tens of millions promoting itself as a safe haven against identity theft.

For more information on credit-report monitoring, see Online Banking Report #83/84. For more on pricing, see OBR #109.

—JB

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Citibank’s Comprehensive Loyalty Program

By Jim Bruene Posted on October 18, 2005
Categories: Advertising & Promotion, Citibank, Rewards Programs

Definition: loy·al (loil) adj. Steadfast in allegiance

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When I was a graduate student 17 years ago, I did a lot of research into so-called loyalty programs. At that time, other than the airlines and grocery stores (think S&H Green Stamps); it was a relatively new concept.

Now, just about every modern retailer has a loyalty program of one form or another, from pizza joints (our favorite spot has a “frequent pier” discount), to book stores ($25 annual fee for at 10% discount at Barnes & Noble), and even pet stores. The programs typically provide discounts, VIP services, and/or special programs for frequent customers.

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Many financial institutions provide loyalty features such as relationship pricing, rewards for credit/debit card usage, personal bankers, and events for high-net-worth clients. But Citibank is breaking new ground with its Thank-You Points program.

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The new rewards program has been featured in media campaigns for the past several months (thank you Citibank for focusing on the positive rather than continuing to over-publicize the identify theft problem). The program delivers points both for the depth of the Citi relationship and the amount of debit card spending. Spending on the many of the bank’s credit cards, including the new Simplicity card, also count for points.

Debit card spending is straightforward, earning 1 point for every $2 spent on signature debit and 1 point for every $3 spent on PIN debit. Credit card spending earns 1 point per dollar.

Relationship points are earned for anyone having 3 or more accounts with the bank, and range from 25 points per month with 3 products and a Citibank Access checking account to 1200 points per month for someone with 7 or more products and a CitiGold Account (click on inset for more detailed information). An online tool is available to help users estimate the reward points they will accrue.

Customers are NOT automatically enrolled; they must call a toll-free number to enroll. There is no online enrollment option. Points can be redeemed by phone or through a dedicated website, <ThankYouRedemptions.com> which is currently closed for remodeling and due to reopen next week.

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Example rewards:

20G iPod = 50,000 points
round-trip coach air fare = 25,000 points
make a wish = 25,000 minimum
gift certificates: $5 = 1000 points; $10 = 1500 points; $25 = 3000; or $10 per thousand for larger amounts

Analysis
Loyalty programs can have a significant impact on customer retention and purchase behavior. However, the programs have three inherent problems:

Cost of communicating the incentives and member reward status
Consumer disinterest/apathy/fatigue with the program
Cost of the incentives

Online delivery helps solve the first two problems. With email and web-based delivery the cost to communicate the details of the loyalty program are negligible, other than the fixed cost to create the communication. Second, the program can be kept fresh with continual feedback to the user when logged in to online banking. A progress chart along and program news serves as a constant reminder of the program benefits.

However, online delivery does little itself to impact the cost of the incentives. In fact, by making it easier to track and redeem rewards, you may be actual increase incentive costs due to higher redemption levels. On the other hand, if you increase interest and awareness, you may be able to get equivalent lift from lower-cost rewards.

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The final word: Online delivery has the potential to greatly increase the impact of bank loyalty programs. So, expect other major banks to enact programs similar to Citi’s. If you have a loyalty program, you may want to look at how it’s delivered online. If you are not doing anything to systematically reward your best customers, you may want to add this to your 2006/2007 plans.

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—JB

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Reference: Citi ThankYouRewards screenshot (links do not work)

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Citibank’s Security Pop-Up

By Jim Bruene Posted on August 23, 2005
Categories: Citibank, Security & Privacy

Under the "every little bit helps" theory, Citibank’s popup window when registering for online credit card access is a nice touch.

The popup (click on inset for closer view) reassures users that they are entering information into a secure site. The well-crafted verse goes like this:

Secure.
A little word that that means a lot–especially online.
Rest assured, this registration process is just that.

The window closes itself in about 10 seconds, if the user hasn’t done so already.

—JB

To learn more about how to promote online security and peace of mind, check out Marketing Security: The sensitive issue of publicizing security and authorization enhancements from our sister publication, the Online Banking Report.

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Citibank Logout Screen Example

By Jim Bruene Posted on July 8, 2005
Categories: Citibank, Website Usability & Design

One neglected area of the online customer experience is logging out. Are you thanking your customer for banking online? Reinforcing that their secure session has safely ended? How about a little cross-promotion from time to time?

We’ve logged off more than a thousand times from dozens of financial institutions and it’s never been particularly noteworthy.

However, this week Citibank’s logoff screen caught our eye (click on inset for full screenshot). Not only did the bank thank us for our business, they posted an attractive promotion for its banking rewards program.

You may not have offer something quite as elaborate as the Citi program, but you can effectively use the logoff page to highlight service improvements, call attention to upcoming events, or highlight community involvement and volunteer opportunities.

—JB

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2004 Online Financial Services Ad Spending

By Jim Bruene Posted on June 7, 2005
Categories: Advertising & Promotion, Chase Bank, Citibank, Metrics & Market Research, NetBank

JP Morgan Chase and Citibank led all banking and lending companies in online ad spending according to the most recent American Banker survey of financial services spending (May 2005).

Chase’s $50 million in online advertising was 21% of its entire advertising expense, the highest among major banks, and considerably above the 11% online share across all financial services companies. In comparison, Citi’s $49 million spent online was only 9% of its total advertising expense, slightly below the industry average.

NetBank, the 16th biggest online advertiser, was the percentage leader, funneling all but $100,000 of its $4.9 million in advertising into online initiatives. Two other major online advertisers spent more than half their money online last year: ING Direct spending 60% of its $40 million total online, and MBNA spending more than half its $14 million online.

Lending Tree, Quicken Loans, HSBC, Sovereign and East-West Mortgage all devoted about one-third of their advertising into the online channel.

Top-20 Financial Institutions Online Advertisers*
2004 Online Advertising (% of total advertising)*
1. JP Morgan Chase $50 million (21%)
2. Citigroup             $49 million (9%)
3. American Express $28 million (9%)
4. Bank of America $25 million (9%)
5. ING Direct          $24 million (60%)
6. Lending Tree       $22 million (31%)
7. Ameriquest          $16 million (13%)
8. Quicken Loans    $10 million (33%)
9. Wells Fargo          $9.2 million (14%)
10. HSBC                $8.3 million (39%)
11. MBNA                $7.0 million (51%)
12. Wachovia          $6.3 million (7%)
13. E-Loan             $6.1 million (21%)
14. NetBank             $4.8 million (98%)
15. Discover          $4.7 million (6%)
16. GM                   $3.8 million (4%)
17. Royal Bank       $3.2 million (12%)
18. Sovereign          $2.8 million (33%)
19. East-West Mtg. $2.7 million (32%)
20. WAMU             $1.9 million (2%)

*Banking, Lending, Mortgage, or Credit Card segments only, does not include online brokerage, insurance, or investments.

If you look at the brokerage and mutual fund category, the spending accelerates. Four online brokers Ameritrade ($65 million), Scottrade ($63 million), Schwab ($58 million), and E*Trade $52 million) each outspent even the largest financial institution, and Netstock Direct ($32 million) outspent all but Citi and Chase.

Top-10 Brokerage & Mutual Funds

2004 Online Advertising (% of total advertising)

1. Ameritrade $65 (64%)

2. Scottrade $63 (87%)

3. Schwab $58 (35%)

4. E*Trade $52 (77%)

5. Netstock $32 (99%)

6. Harrisdirect $24 (78%)

7. Vanguard $12 (31%)

8. TD Bank $10 (17%)

9. Fidelity $5.3 (4%)

10. T.Rowe Price $3.8 (5%)

Download the Excel file with more details.

—JB

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Citibank Fights Fraud with Personalized Emails

By Jim Bruene Posted on May 30, 2005
Categories: Alerts & Messaging, Best of the Web, Citibank, Email Marketing, Security & Privacy

It’s fitting that the financial company most targeted in phishing attacks, Citibank, would be the first to introduce a new email format that goes a long way towards helping users identify legitimate email messages.

The personalized emails (click on inset to enlarge) include not only the name of the recipient, but also the last 4 digits of the user’s ATM card. While simple personalization with the customer name would help many users identify legitimate emails, it’s far from fool-proof.

First, there’s the relatively common practice of including first name and/or last names in email addresses. Also, some phishers are using direct marketing tactics and first running email addresses through various databases to append actual names and other info to the email record in order to develop a personalized pitch (see ZD-Net article).

Citibank’s new email format was announced to customers through a short message on the top of the online banking screen in early May. It is also now mentioned in the bank’s main FAQ page.

Analysis
This is a great first step in winning back the confidence of users. Eventually email standards will evolve so that the email client will be able to readily identify legitimate emails, but that could be years in the future.

If you are considering a similar approach, you might want to let users choose the name and identifying information that appears in the personalization box. In February, we reported on a UK security initiative that took that approach.

For more information:

Previous NetBanker post on eBay’s personalized email strategy
Security & Privacy from Online Banking Report (#93/94)

— JB

Editor’s Note: Citibank received an OBR Best of the Web award for this and other security features in Online Banking Report #119, "Marketing Security."

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Banking Bill Payment Guarantees

By Jim Bruene Posted on April 15, 2005
Categories: Bill payment, Citibank, Epayments, Service

We believe a strong bill payment guarantee is crucial, not only to the credibility of your epayments program, but by implication, to your entire online banking offering. CheckFree has offered its logo up for years, but your customers want to know what YOU will do for them; most would prefer to know nothing about CheckFree.

And your guarantee needs to be visible to both online banking users and those just thinking about it. One of the best ways to increase visibility is by creating a "bill-pay guarantee" icon that users can click through to learn more about it.

One of the better examples is at Citibank (inset) on its logon page. When you click on the logo, a small popup appears (click on the thumbnail below):

This guarantee has great copy, you can tell the marketing department was heavily involved. Rather than just reiterating the rather droll performance guarantee,* the bank also highlights several benefits:

No hidden charges, in other words, unlike "free checking," bill pay really is free
24/7 service with "fast response"

*Citi’s bill-pay guarantee states that payments will be processed within 24-hours and delivered to payees according to the schedule, or the bank will pay for any fees incurred.

—JB

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Citibank’s Impressive Follow-up Sales Effort

By Jim Bruene Posted on March 18, 2005
Categories: Citibank, Sales Techniques

Citibank has woken my sick-in-bed wife the last two mornings, calling to remind me to submit my paperwork to fund the new checking account I established online two weeks ago.

She’s not so thrilled with the bank, but I’m impressed with its tenacity.

Here is the scorecard of bank followup efforts:

Email = 1 (about 2 weeks after application…almost missed it, thought it was a phish)
Mail = 1 (technically not a reminder, it was the sig card and new account kit)
Phone = 3 (first about 1 week after application, then number 2 and 3, about 2 weeks after application

It’s an impressive follow-up effort. I’ve applied for a number of accounts over the years and I can recall receiving only one telephone call, from Salem Five back in 1995, and that wasn’t even an application, just a sales lead. The last time I tried to start a checking account, with Washington Mutual, I never heard from them, not so much as a single email or letter thanking me for my application. As far as I know it’s still sitting in limbo on some backup tape.

Sorry for the delay Citibank, I really do want that iPod, so I will be sending my $2500 deposit ASAP.

Action Item
If a company with as much experience as Citibank has found it to be profitable to make follow-up phone calls on unfunded new accounts, you should consider doing it as well. However, you may have more luck than Citi does using email followups. Citibank’s brand in an email message is practically worthless these days after the pounding it’s received from phishers.

—JB

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