by Dr. Dan Geller
Dr. Geller is EVP of Market Rates Insight, which provides competitive research and analytics to financial institutions. He can be reached at email@example.com.
One of the most significant findings from our latest study on banking fee-revenue optimization (see note 1 below) is that the majority of consumers say they will pay monthly subscription fees for value-added financial services (see chart below and list right).
The average monthly fee that more than half (55%) of consumers are willing to pay ranges from $2.17 to $5.06 per month for each service. Of course, these stated amounts are an indication of relative perceived value rather than a pricing guide.
Furthermore, we found that consumers are willing to pay a higher overall monthly fee for the bundle than they would for each of the services individually. For example, study respondents indicated they are willing to pay $3.07 per month for a credit score report, $2.43 for account alerts and $4.27 for prepaid card for a total of $9.77. However, when the three were offered as a bundle, respondents valued them at $10.51, an 8% premium.
Bottom line: We believe there is a path for financial institutions to move customers "from free to fee" by bundling services in the optimal way.
Chart: Consumer Interest in Value-Added Banking Services
Source: Market Rates Insight, June 2013
1. For more info on these finding, MRI is offering a free webinar on Tuesday June 18 from 2:00 PM to 3:00 PM Eastern Time. Click here to reserve your space. The full report will be available for purchase beginning June 21 at <marketratesinsight.com>.
We've been blogging here for more than three years. During the first 2.5 years, the site was password-protected and available only to Online Banking Report subscribers. While that model worked fine, it didn't bring the kind of traffic that grows your business. Since we eliminated password protection, our site traffic has grown more than 100-fold.
But site traffic only increases your website hosting bill unless you have a way of garnering some revenues. And we have elected to use what we call the "value-added sponsor model." That means we seek out and offer space to highly relevant companies with products of great value to our core audience, banking and technology execs working in the financial-services sector.
Our first sponsor* is San Anselmo, CA-based Market Rates Insight. If you are a large bank, you probably already use their popular deposit- or loan-rate feeds. But the company is also in the product-tracking business, a great service I was unaware of until I had coffee with CEO Rick Barham this spring.
Since then, we've been discussing ways to work together since we are both banking product guys. Our first effort is a special offer to NetBanker readers, a one-year free subscription to its Rate Move Alert and/or its Heard on the Streets product-tracking service, a $500 value.
To take advantage of the offer, click on one or both of the banners (right), complete the brief registration form, and you're set.
* Full disclaimer: Market Rates Insight is a sponsor but they had no control over this post. We're excited to have them as a sponsor because of the quality of their products and the special offers they've created just for you. In the future, we may thank other sponsors for their support, but we'll always let you know when we have a sponsorship relationship with them.