Flash Marketing Addendum: Co-branded Payments

In my post yesterday about flash marketing via Groupon and LivingSocial, I neglected to mention another interesting opportunity: working directly with the marketing companies to add your brand to the service.

imageBecause payments and credit are crucial to ecommerce success, financial brands are a logical addition to the checkout process. And Visa just so happens to be featured today at LivingSocial (see inset and screenshots below).

Anyone who buys today’s Seattle deal, a $25 restaurant certificate for $10, automatically gets a second certificate to use as a gift, if they pay by Visa Signature card (see notes 1, 2). It’s hard to say what Visa is paying for the promotion, but given the massive website traffic and transaction activity, it’s likely a pricey sponsorship (note 3).

Email from LivingSocial with Visa branded add-on offer (28 July 2010)


Landing page (link)


1. Some interesting items in the fine print for the Visa-sponsored comp certificate:
– valid only for Visa Signature cards, which might irritate some non-Signature Visa customers
– offer not valid for purchases made via iPhone (there must be something in the shopping cart that does not work on the iPhone)
2. My saved credit card in the site is a MasterCard; when I went to purchase the deal, there was no mention of the free certificate, nor any prompt to switch to Visa.
3. The merchant is receiving $5 for each certificate issued under the main deal. Visa’s sponsorship would need to cover some compensation to the merchant, but perhaps at less than $5 each, since fewer of the gifted certificates will be redeemed. It looks to be a popular offer, having sold almost 2,600 units (by 7 PM), with almost 10 hours remaining.

Flash Marketing: Can Groupon/LivingSocial Work for Banks and Credit Unions?

imageThe coffee shop where I do much of my writing held a huge sale yesterday. But you wouldn’t have known it from the sparse late-July mid-day crowd. The event took place entirely online through local deal-of-the-day marketer, Groupon.

The day-long sale resulted in nearly 3,000 half-price $10 coupons being sold, a huge influx of customers for a 3-location coffee shop (see screenshot below). I’m working somewhere else tomorrow when the coupon buyers start coming in. 

imageGroupon is the leader in the burgeoning field of localized flash marketing (aka social/group buying) having taken more than $170 million in VC funding to expand to more than 150 cities.

The other major player is Living Social, which I’ve successfully used a few times to buy gifts. LivingSocial has raised $50 million and recently expanded to 52 cities. Both companies have nearly 5 million unique monthly U.S. visitors (see below). And with minimal barriers to entry, there are dozens of copycat sites in operation.

There’s another sub-category in flash marketing, companies that specialize in certain types of merchandise. The pioneer here is the geeky and irreverent gadget and T-shirt marketer, Woot with 2.3 million monthly visitors. The site was scooped up by Amazon for $170 million last month. In women’s fashion, Gilt Groupe has a cult following and nearly 1 million monthly visitors.

U.S. traffic at Groupon (blue), Living Social (green), Woot (orange), Gilt Groupe (red)

Source: Compete (link)

Flash marketing is not a new concept, and it’s not much different than the $299 laptop on the cover of the Best Buy circular. Savvy shoppers know to show up early at the store if they want to claim one of the few loss leaders in stock.  

Web-based flash marketers use email, Facebook and Twitter to inform potential customers of the latest deal. There is usually a time limit, typically a single day, and/or a limited number for sale. All the Groupon deals expire at midnight local time. Woot runs all its deals for 24 hours, or until they sell out, beginning at midnight Central Time.

Opportunity for Netbankers
While I haven’t seen a financial product sold on Groupon or LivingSocial yet, there’s no reason it wouldn’t work. In a quick search, the only financial institution participant I found was First Tech Credit Union, a recent recipient of sponsorship recognition in a LivingSocial deal for half-off tickets to the 2010 Bellevue (WA) Jazz Festival (see second screenshot).

But the promotions can be costly. The flash marketing companies typically take 50% of the sales price and require a deep discount, usually 50% or more off list prices. So retailers are getting as little as 25 cents on the dollar in the promotions (see note 1). Quantities can be limited to protect against too many takers.

While financial services don’t lend themselves to online flash sales as well as spa visits or fine dining, there are fee-based services that could work. For example: 

  • Checking account: $15 annual fee (first year) instead of $96 list price (note 2)
  • Credit monitoring: One year for $50 instead of the $150 list
  • Credit report: One 3-bureau report for $10 instead of the $30 list
  • Financial plan: $50 instead of $200 list
  • Prepaid MasterCard/Visa: One $25 card for $15 instead of the $29.95 list (assuming $4.95 issuing fee)
  • Savings account: $50 initial deposit for $15 fee (note 2)
  • VIP banking package: $25 annual fee instead of more than $100 if bought separately (rewards card, premium service, free VIP online banking, credit report, rate discount, etc.)

Or FIs could go the First Tech route and work with local restaurants, theatres, or nonprofits to sell a product bundle. For instance, a $20 dining certificate, 50% off on theatre tickets and a $10 Visa card for $20. 

Groupon Seattle deal-of-the-day at Zoka Coffee Roasters (26 July 2010)

Groupon zoka coffee offer

First Tech Credit Union gets top billing on recent LivingSocial deal (link)


1. That assumes all coupons are redeemed. But typically a large portion, as much as 50%, go unredeemed. That means fewer new customers in the door, but it also helps limit the amount of discounts that must be honored.
2. The problem with many financial product offers is that not all customers will be approved. But you could offer refunds for anyone declined for a checking account.
3. For more info on selling online, see our Online Banking Report on Lead Generation.

Email Unsubscribe Best Practices for Banks, Credit Unions and Other Financial Services Companies

image It’s been three years since I last went through my inbox to unsubscribe from the marketing and information lists I no longer read. At that time, I still used email to keep up on ecommerce and banking news. Now, that task has moved almost entirely to RSS, and I rarely read any broadcast email these days. 

During a two-hour paring process to delist 40 to 50 subscriptions from email, I paid close attention to how each company handled that bit of negative news and jotted down a few best practices for banks, credit unions, and other financial providers (note 1): 

  1. Put your branding on the unsubscribe page, don’t simply default to your email service provider page.  
  2. Greet the customer by name and/or email address.
  3. Provide customer testimonials on the value of the email subscription.
  4. Empathize with their situation (e.g., Getting too much mail?), but reiterate the benefits of staying in touch with you (e.g., We really want our customers to get the best deals!) and gently see if you can change their minds (e.g., Are you sure? Try us for another month, and we’ll do our best to bring you only pertinent offers.) 
  5. If that fails, offer alternative ways to maintain contact, for instance:
    – Less-frequent email (see first screenshot below)
    – RSS feed(s) (see second screenshot below)
    – Better-targeted email on just certain subjects
    – Use a different email address
    – Change email format (HTML vs. text)
    – Use SMS instead of email
  6. If applicable, explain that customers will still receive account-related email messages.
  7. Provide a feedback form so users can tell you why they are unsubscribing.
  8. Confirm the request online and provide links to other areas of your website.
  9. Send an email confirming that the unsubscribe process is complete.

Step 1: TigerDirect unsubscribe page (20 July 2009)
Email subscribers clicking on “unsubscribe” are first asked if they’d prefer to receive fewer emails.


Step 2: After unsubscribing, customers can sign up for RSS or catalog delivery image

Update: Staples…another good example of offering choices on the main unsubscribe page (screenshot 22 July 2009; hat tip to Loren McDonald, note 2):


1. U.S. emailers must comply with CAN-SPAM regulations at all times. 
2. Here’s a good presentation from Loren McDonald from Silverpop on the subject. 
3. For more info on email marketing, see our Online Banking Report on Email Marketing in Financial Services (published June 2006).

Reference: Media Categories for Delivering Bank & Credit Union Marketing Messages

image I was reading Currency Marketing (note 1) founder Tim McAlpine’s ten-part blog opus (here) on so-called Challenge Marketing, a mix of social media, sweepstakes and viral marketing. It’s great reading, especially if you are thinking of embarking on a new-media marketing campaign.

In part 4, Tim created a list of media available for marketing messages. I started with his list, added to it, and rearranged the topics. Use this as a cheat sheet in your planning meetings to make sure you’ve covered all the bases. I know I’ve missed things, please add to the comments and I’ll update the list.

  • ATMs
    • Screens
    • Enclosures
    • Receipts
  • Blogs
    • Posting/commenting on your own blog
    • Guest posts on others
    • Commenting on other blogs
    • Asking for reciprocal blogroll listings
    • Sponsored blog post (tread carefully)
  • Branch
    • Posters
    • Brochures
    • Plasma screens
    • Floor decals
    • Window decals
  • Call center
    • On-hold messages
    • Press 1 for more info on ____
  • Charitable activities
  • Cinema advertising
  • Door-to-door
    • Flyers
    • Conversations
  • Ecommerce
    • Powered by your brand
    • Advertisements on confirmation screens/email receipts
  • Direct mail
    • Postcard
    • Letter
    • Welcome packages
  • Direct-to-desktop computer applications
    • Widgets
    • Toolbars
    • Buttons/alerts
  • E-mail
    • Direct messages to house or rented list
    • Advertisements/sponsorships within third-party email letters
    • Advertisements within triggered account alerts
  • Joint marketing (with other companies)
  • Mobile
    • Text messages
    • Downloadable app (iphone, Blackberry, Android)
    • Advertising in other apps
    • Sponsoring other apps
    • Featured at carrier/manufacturer site
  • Newsletters
    • Your email/printed/RSS  
    • Third-party properties
  • Online advertising on outside properties
    • Banners and other on-screen ads 
    • Advertorial
    • Sponsorships
    • RSS feed ads
    • Social networks (Facebook, MySpace, MSN, others)
    • Search engines (Google Adwords, Yahoo, Microsoft, others)
  • Online advertising on your properties
    • Main website
    • Online banking site
    • Logon/logoff splash screens
    • Microsites/landing pages
  • Outdoor
    • Billboards
    • Transit
    • Wall projection & other non-traditional outlets
    • Building site signage (construction loan clients)
    • Vehicle signage
  • Print/newspaper/magazine
    • Display ad
    • Classified ad
    • Column/op-ed articles
    • Inserts
    • College and other niche publications
    • Yellow pages/programs/directories/etc.
  • Promotional item giveaways
  • Public relations
    • Appearances and interviews
    • Press releases
    • Spokester (see Currency Marketing’s Young & Free)
  • Radio
    • 15/30 second spot
    • Advertorial
    • Sponsorship
  • Social media activity (note 2)
    • Facebook
    • MySpace
    • LinkedIn
    • Microsoft Live
    • Twitter
    • YouTube
    • Forums
    • Wikis
  • Sponsorships
    • Sports
    • Events
    • Charitable efforts
    • Schools
    • Green efforts
    • Anti-fraud education
  • Statements
    • Stuffers
    • Messages
    • Envelopes
    • Estatement advertising
  • Street-team marketing
  • Sweepstakes (on- and off-line)
  • Telemarketing
  • Third-party locations/publications
    • Advertising/messages
    • Signage
    • WiFi sponsorship
    • Billing statements
    • Websites
    • ATMs/kiosks
  • Television
    • 15/30 second spot
    • Product placement
    • Sponsorship
    • Infomercial
    • Online streams
  • Word of mouth

1. Tim McAlpine has achieved near-rock-star status in credit union social media circles as the mastermind of the hugely successful Young & Free campaign.
Update: 18 March 2009, Tim posted a comparison of the latest Y&F campaign at South Carolina Federal Credit Union compared to the original Alberta one. The latest version is up in every category, a partnership with a local radio station is credited with part of the gain.
2. If you need examples from outside banking, here’s a 2-part wiki (here and here) created by social media guru Peter Kim with almost 1000 examples of social media efforts by various brands.

New Online Banking Report Published: 2009 Planning Guide

image With the financial crisis still in full swing, it's not easy to concentrate on the 2009 plan. But focus you must.

You can bet that companies emerging from this mess as winners are working overtime right now, plotting how they will grab your market share next year. Yes, budgets will be down, but thanks to the Web and social media, there are more cost-effective opportunities than ever to get your message out.

With that in mind, we offer the latest issue from Online Banking Report, our 14th annual Planning Guide for Online & Mobile Banking (see note 1).  

It includes 72 pages of ideas, tips and tools to help you generate new ideas, plans, and strategies for 2009 and beyond. Subscribers, Online Banking Report subscribers, may download it (here) free of charge. Others may purchase (here).

While more than 500 online banking product and marketing ideas are published in the report, we hand-selected 20 projects for the 2009 hot list (in alpha order):

  • Activity ticker
  • Balance conversions
  • Credit score/report zone
  • Flat-fee mortgage
  • Green banking
  • High-yield deposit accounts
  • Home equity center
  • iPhone/Android native app
  • Long-term archives
  • Micro/small-business services
  • Peer-to-peer loan facilitation
  • Personal finance functionality 
  • Premium/VIP online services
  • Prepaid/gift cards
  • Problem mortgage resource center
  • Retirement center
  • Service standards/guarantees
  • Social media/blogging
  • Usage-based contests/rewards
  • Widgets

1. The Netbanker blog (established 2004) and Online Banking Report (established 1994), are written and published by the same company.