Asaf Buchner

Giving Up Broadband is Too Hard

Fri, 18 Aug 2006 17:51:23 -05:00

To get even with my broadband provider increasing the monthly fees to $45, I switched back to dial-up at a mere $7 a month. I thought dial-up would not be so bad. Besides, I relied on my neighbors� benevolence to supply me with cheap (free) and fast WiFi connection. However, as mooching is proving unreliable (and is probably posing me some security risks), I find myself dialing often to my ISP. And to my �astonishment� dialup is really slow� I don�t think I can bear it much longer. I don�t know if we ever asked consumers whether they switched back to dialup but I expect that the numbers will be very low.

Opening a New Bank Account Online Is No Picnic�

Mon, 14 Aug 2006 12:11:44 -05:00

I needed to open a few new bank accounts for research purposes and figured that it would be a good opportunity to test online account opening. Our survey found that while the vast majority of online consumers prefer applying for a new account at the branch, there is a segment that would rather apply online. I tried opening new accounts at five major banks (B of A, Chase, Wachovia, WaMu and Wells Fargo). I discovered that banks still need to work on their online application processes. All five banks allow new customers to open an account online. In fact, Wachovia and WaMu promote the product in the main banner on their homepages. However, opening the account was not so easy. The process was rather smooth with Chase and Wells Fargo. Wachovia asked me to come to a branch and B of A needed to evaluate my application for a few days. WaMu has a great application; it�s lean and straightforward. WaMu rightly claims that it takes less than seven minutes to complete the process. However, WaMu�s application crashed three times before I was able to complete it, so I can�t say it was a great experience.

I�ll write more about it in my upcoming research, so stay tuned.

Branch Strategy Re-visited

Wed, 09 Aug 2006 11:32:25 -05:00

The NYT has an interesting article today about banks� branch strategy. The article concludes that branch growth will slow down, or not. While the focus of my coverage is online, I am fascinated by the future role of the branch. A recent JupiterResearch consumer survey asked online consumers to identify their channel of choice for different banking activities. It is not surprising that for the opening of new accounts and the acquisition of new products (excluding credit cards), the branch is still the preferred channel. The online channel, however, is the preferred one for conducting market research. Banks should therefore align their channel strategy with the consumer preferences. For example, they should allow consumers to research online, identify an offering that appeals to them and then apply for the very same product at the branch. I will write about this topic later this year but if you are a client and would like more granular data, feel free to contact me.

Citicard Bets on Google Checkout

Thu, 29 Jun 2006 09:47:09 -05:00

With credit card customers holding multiple cards in their wallet, issuers struggle to make their card the �chosen one.� A current Citicard promotion gives their credit card holders a $5-10 monetary incentive (depending on the card) when they register their Citi credit card with Google Checkout and make a first purchase. Their hope is that if (or once) Google Checkout is successful, consumers will continue to use their default payment option, which will be a Citi credit card.

Hypothetically, Citi could have run this promotion without Google�s consent or co-operation. However, since this is not the case, there must be something in it for Google. Citi will probably advertise the service to the card members, increasing awareness and sign-up numbers. In addition, I suspect Citicard gave Google better a deal on the interchange fees...

Marketing Financial Services in the Secure Section of the Site

Wed, 28 Jun 2006 13:07:08 -05:00

In a recent report [clients], I stressed the growing importance of the online channel as a tool for marketing additional products and services. In that respect, the secure section of the site is still underutilized. This is in part because the online marketing group does not manage the secure site (silos) and in part because marketers are still seeking the best way to approach their task-oriented secure visitors. I looked at what some financial institutions are doing:

Citibank (online banking). As customers log into their account they receive a screen promoting paper statement suppression, unless they have already opted-in for the service. There are banners within the secure site and the signing-off confirmation page is also used for the promotion of products/services.

Chase (credit cards). After logging in, a screen comes up with an offer. Customers need to tick a box in order not to see the same advertisement again. I was shown an ad for balance transfer and in a later session one for paper statement suppression (although I already opted-in). There are links and banners in the secure site.

Amex (credit cards). The secure section shows featured offers below the account information (almost like an insert). There are links on the right side of the page for additional services (alerts, statement suppression).

Alitalia�s New Online Reservation System Mixes English and Italian

Fri, 09 Jun 2006 15:57:40 -05:00

Alitalia re-did its website recently, adding some features to the online reservation interface and improving the look and feel of the site. Overall, I like the new site and the added features, which include a �flexible dates� search option. However, the English version of the site throws a word or two in Italian in each screen, which is pretty amusing (if not sad). One (old) feature that I really like is the ability to hold a reservation for 24 hours without buying the ticket. However, this feature is only available for members of their frequent flyer club.

Driving Consumers to Low Cost Payment Processing

Thu, 08 Jun 2006 14:12:56 -05:00

It�s interesting to observe how both Amazon and PayPal attempt to lower costs by driving consumers to a cheaper payment-processing alternative.

I have an Amazon Visa credit card. Every time I shop at Amazon, the first payment choice is that Amazon card on which Amazon pays low (if any) inter-change fees. When I choose another card, at the checkout page Amazon still tries to convert me to Visa Amazon by touting their accelerated rewards program. While I usually resist (I prefer not to receive a bill for that particular card), it is a tempting proposition.

PayPal tries to push the bank transfer alternative by defining it as the default option. If I change it to pay with a credit card, they show me a screen listing the benefits of paying through a bank transfer. PayPal has been doing it for a while now, so it must be working on some consumers. However, I find none of their arguments particularly appealing and I personally choose to pay with a credit card for the rewards and the no-interest credit.

PayPal: No finance charges or bills to pay
The "no-bill" argument is somewhat appealing (Jupiter clients should check out Ed�s report: The Move to Debit from Credit). However, I suspect most consumers already receive a credit card bill and do not pay finance charges. Besides, consumers can still pay with a debit card.

PayPal: You are 100% protected against unauthorized payments sent through your PayPal account
Great, but credit cards offer similar and sometimes better protection than PayPal.

PayPal: We keep your bank account details private
Good to know, but this is a re-assurance rather than an incentive to use a bank transfer.

What's New in Financial Services Marketing?

Tue, 06 Jun 2006 18:26:34 -05:00

I went to an Advertising Club luncheon today carrying that title. It was interesting, but not shocking. For one, there was more focus on the online channel compared to last year�s event. Some interesting comments included:

Laurine Garrit (TD Ameritrade�s CMO) spoke about marketing brokerage services when stocks are falling. In these times investors are insecure and scared and the messaging should focus on the advice that the brokerage can give them to sort out their investments.

Giunero Floro (Ameriprise�s Head of Advertising, Branding and Media) talked about the hot topic of marketing financial planning to baby boomers, a generation that is not very trustful and does not have time to learn about their finances. Ameriprise responds by being personal, focusing on the positive, and developing relationships for the long run.

Nick Utton (E-trade�s CMO) spoke about the importance of holistic measurement and the lack of mechanisms to account for the offline effect on online applicants (and vice versa). This is an area that I will be looking into later this year.

Web-to-Bank

Thu, 01 Jun 2006 11:33:00 -05:00

I was discussing with Haim Oren, our partner in Israel, my upcoming research, when he came up with the term �Web-to-Bank�. Similar to �Web-to-Store� it describes online research activity that leads to an application at the branch.

On a related note, we are working on the Financial Services and Payments consumer survey. I encourage clients that would like to see a draft of the survey or contribute to contact us.

My Bank Doesn�t Get It?

Wed, 31 May 2006 12:46:27 -05:00

American Banker [subscription] covers an interesting initiative by HomeStreet Bank. The Seattle thrift created a new website, where horror banking stories can be shared. HomeStreet advertised the site offline, but only exposed its affiliation to the initiative 2 weeks into the campaign. It�s not clear yet if the campaign is successful (the site got 7,000 hits so far) but it�s quite telling to read the stories, assuming that they are genuine. I went over 20 of the 72 stories currently posted on the site. It is not a surprise that half of the complaints are around fees. While everybody hates paying fee, I believe that creating a clear and easy-to-understand fee structure can address some of the consumer resentment. Other complaints revolve around the quality of service or lack of flexibility.