NetBanker 2.0

Everbank takes on ING Direct with 6.01% checking account campaign

Everbank launched its "What are you waiting for?" campaign today by giving away 2,500 free subway tickets at 6:01 AM in lower Manhattan. The time was chosen to coincide with the 6.01% APR promotional start-rate on its FreeNet checking account (see Note 1). 

The campaign targets ING Direct's soon-to-be-released Electric Orange checking account, which currently pays beta users 3% on balances under $50,000 and 5.3% on balances greater than $50,000 (see Note 2).

Everbank launched a microsite called <whyruwaiting.com> with direct comparisons to ING Direct (see screenshot below).

Clicking the large Compare Banks button in the lower right leads to a comparison to ING Direct and several other major competitors (see screenshot below):

The campaign has not been extended to the Everbank website, which shows a banner for the 6.01% offer, but no mention of "Why are you waiting?" (see screenshot below). 

Clicking through the banner leads to the following page:

Notes:

1. The 6.01% is a promotional "teaser" rate is good for three months, then resets to the "regular" rate which are currently as follows: 
      Under $10,000 = 3.25%
      $10,000 to $25,000 = 3.30%
      $25,000 to $50,000 = 3.60%
      $50,000 to $100,000 = 4.00%
      More than $100,000 = 4.41%
   
   The minimum deposit is $1,500 and the maximum that earns 6.01% is $100,000.
2. ING Direct customers can also easily transfer funds into the companion savings account which pays 4.5%. ING's Electric Orange account began rolling out in waves to its 4 million savings account customers in December (see coverage here). Coincidently, I received my invitation yesterday (see screenshot below). 
   
   

HSBC Direct attracts 350,000 accounts

In a Jan. 1 case history published in Direct Magazine (article here), HSBC Direct says it has attracted 350,000 customers since the launch of its high-yield savings account just over a year ago (Nov. 2005).

Assuming typical high-yield balance levels of $8,000 to $10,000 per account (our estimate), the bank has attracted more than $3 billion in deposits (Jan. 31 update: in a CNN article yesterday, here, the HSBC said it has attracted $7 billion, a hefty $20,000 average balance). The bank has marketed its 5%+ APR account heavily, so it's not likely that the new business is making much of a profit contribution yet.

Based on the bank's reported online ad spending, its acquisition costs were $75 per account from the online spending only, not including what it spent in other media to support the direct business unit (see note 1).

The bank said it is working on new products to offer through the direct bank. This is a crucial step in the evolution. There just aren't enough customers with $10,000 savings balances to feed all the financial institutions looking for new deposits. HSBC's ability to sell other services to its 350,000 new customers will determine the long-term success of the direct banking initiative. 

Thanks to former Forrester senior analyst, Ron Shevlin, now VP at Epsilon, for the link in his Marketing ROI blog. 

Notes:

1. According to data from TNS published in American Banker here, HSBC spent $20 million online during the first three quarters of 2006. To calculate the acquisition cost we annualized the online spending and divided by 350,000. This calculation excludes the portion of non-Internet advertising that went to support the direct unit. The bank's total ad spend was $42 million during the first 3 quarters of 2006.

WT Direct takes on ING Direct at Kiplinger.com

Kiplinger published an article on the state of online banking (see article here). It's an interesting read, but it's the WT Direct ad in the upper-right corner that I found most interesting (see screenshot below). WT Direct is the new direct banking arm of Wilmington Trust (see coverage here). 

It's a Flash animation that's part parody of the whack-a-mole banner ad and part a direct shot at ING Direct.

Viewers are directed to:

"Hit the ball and get a really great rate."

That's when the humor begins. Attempting to move the cursor over the ball causes the ball to move away. So there is no way to actually click on the ball. After a few seconds, a new screen appears with two words, "Give up?" It's a not-so-subtle dig at ING Direct rates which are revealed on its homepage usually after an orange ball bounces across the screen. ING Direct is currently paying 0.75% less than WT Direct on a $10,000 balance (see note 1).   

Then finally, it's revealed who is sponsoring the ad, WT Direct: 

The landing page reinforces the banner ad with a direct comparison to ING Direct's payout with the animated graph in the lower-left corner (see screenshot below).

Nicely done.

Notes:

1. After the first 60 days, balances of less than $10,000 earn just 0.6% at WT Direct. ING Direct pays 4.5% on all balance levels.

Key Bank uses TV advertising to promote deposits in its Saveday promotion

Thursday night, as my son Tivo-ed his way through the commercial breaks on The Office, I noticed a Key Bank logo at the end of the commercial break. I had him go back and play the five-second spot which was teaser style with a brief voiceover, logo, and the URL:

KeyBank.com/saveday

Expecting to see an interesting Web-based savings-account-marketing effort, I typed "key bank save" into Google and came up empty-handed (see note 1). The first link led to a Key Bank loan application, and no display of sponsored results.

Next, I tried connecting directly to the bank using what I recalled of the URL shown in the TV spot, <keybank.com/save>. I realized it was the wrong address when all I saw was an error page, which unfortunately contained no guidance on what to do next (see inset). Finally, I went to the Key Bank homepage and found a large banner announcing the program aimed at encouraging users to curtail their discretionary spending on a designated day (your "Save day") each week (see second screenshot below).

Analysis
I like the idea of creating an interesting program to spur savings. For example, even though I didn't much like it initially (see post here), Bank of America's Save the Change does have a certain amount of appeal, at least from a marketing standpoint (see note #2).

And Centra Credit Union's <centra.org> new prize-based savings plan deserves a second look (thanks Doug True for the original post on this, here; see screenshot in note #3 below).

However, there isn't much to like about Key Bank's Saveday effort. The television spots may work as image advertising, but the website execution left much to be desired. The bank not only failed to support its television buy with search advertising, but also it landing page contains little of interest besides the standard suite of savings calculators (see screenshot in note #4 below). No incentives, contests, or benefits beckon and motivate consumers to do something as unpleasant as giving up their daily latte.

The bank does offer a handy PDF worksheet that can be printed out to calculate a monthly budget; however, no links or discussions of automated savings plans are in evidence. Putting savings on auto-pilot is a much more powerful saving system than trying to get customers to sacrifice their caffeine one day per week.

Also absent are interactive elements to help get someone started. For example, why not send customers a text message to their phone or email each Saveday to encourage them to save.

But the biggest blunder is calling attention to the bank's incredibly low savings rates. For example, for a $10,000 saving balance, a typical amount in high-yield savings accounts, Key's three options paid a paltry 0.10%, 0.20% and 1.24% (see note #5). And no, those are not typos, that's two-tenths of a percent, in the KeySaver account, or a grand total of $1.66 per month, before tax. Not even enough to buy that cup of coffee the bank wants you to forego on your Saveday.

It takes a $25,000 balance to get above 1.24% in any of Key's savings accounts (note #6). And anyone who's managed to stash away that much in liquid savings probably doesn't need a Saveday.

Notes:

1. Later we tried, "key bank saveday" and the first link was a press release on the promotion, but it was at a csrwire.com URL (see release here). Searching from a Seattle Wi-Fi IP address in Seattle.

2. Bank of America has recently been touting the Save the Change debit card benefit in its usual excellent television ads.

3. Centra Credit Union Super Savings page

4. Key Bank Saveday landing page

5. Rates quoted on Keybank.com for zipcode 98115 on 22 Jan. 2007

6. Update Jan. 30: According to a bank employee, a $25,000 deposit now pays 3% in Key Ultra Money Market, which I confirmed online. And in markets where Key Bank doesn't have a branch presence, the rate is as much as 5.25% through Key Direct (see screenshot below).

A do-it-yourself outsourced sweepstakes from ePrize's Caffeine unit

Sweepstakes and contests are a proven way to generate new leads and add a bit of excitement to your website marketing, especially when tied to online banking and/or bill payment usage (see previous coverage here).

However, if you are a smaller bank or credit union, it may be difficult to justify the overhead necessary to create a contest for a few hundred website visitors. The new service Caffeine <caffeinenow.com> from ePrize makes it easy to create your own professional sweepstakes or interactive instant-win game, complete with optional discount coupon (see my test sweepstakes mockup above). The service was profiled in The Wall Street Journal today (article here).

The service has no upfront fees, costs about a buck per new user, has attractive templates, and is drop-dead easy to use. A first-time user could easily create an entire promotion in less than an hour using the company's Web-based tool.  Go ahead and see for yourself: You can create a free account and build a sample promotion (see screenshots below).

The downside is that the prize pool is shared, so your customers may never actually win, and customization options are limited. Check out <myqualitycleaners.com> to see the service in use (screenshot below). 

Using Caffeine
An online console is used to create the promotion in seven easy steps (see below). The company says you can set up a sweepstakes in 10 minutes. From my tests, I'd say that is possible, but the first time through you will probably spend closer to an hour deciding which prize to offer, which theme to use and so on. Subsequent promotions could be set up in five minutes or less.

Here's the process, which requires no technical knowledge or expertise other than access to your company's credit card to pay for it: 

1. Choose from a half-dozen promotion themes
2. Set the background color
3. Enter business info and upload your logo
4. Decide either to give away low-dollar instant-win prizes worth $10 to $25 each, or to use a $10,000 sweepstakes prize, then select from several dozen prize choices.
5. (Optional) Choose what type of coupon you want to offer after entering the contest; unfortunately, the choices are either a percentage discount, or 2-for-1 offer, neither of which is particularly good for financial institutions.
6. Create a budget limit, including how many times you will let someone replay the game (0 to 4), and enter billing info.
7. Copy the code for the contest banner and enter it into your content management system.

A dashboard at the Caffeine website allows you to track usage, budget, and registered users. The free tell-a-friend option allows your contest to spread virally.

Cost
The best thing about the solution is no up-front costs; it's all variable depending on usage. Here's the basic charges:

$1 per new registration
$0.05 per coupon printed (optional)
$0.04 per email sent (optional)
$0.15 per subsequent log-in to replay the game (optional)

Screenshots
MyQualityCleaners homepage with contest banner:

OBR test sweepstakes setup shows the elements chosen for my online game: a $25 blockbuster gift card awarded daily, an interactive scratch-off game, the retro sign, my logo, and other form items:

An optional coupon shown after a user participates in the game:

The billing screen clearly shows the prices for all services and allows business owners to set a weekly budget amount:

Make sure your Wikipedia entry is factual and up-to-date

Ten years ago, we advised banks to make sure their listings in Yahoo were up to snuff. Now, the major search engines are so good, not much work is required to appear at or near the top of the results for searches on your company name (see note 1). 

However, there is one important online database with massive reach that still needs manual maintenance, Wikipedia. As the sixth-busiest Internet property in the world, with 150 million monthly visitors (see note 2), you should make sure your institution's entry is both factual and up-to-date. One of Wikipedia's defining attributes is that anyone is allowed to edit the content. So there is no reason you shouldn't jump right in and immediately change any factual errors. You should also consider adding information and links to missing or incomplete listings, but make sure to follow the strict guidelines prohibiting self promotion.   

Not surprisingly, Wikipedia prohibits all forms of advertising. And they'll take down any entry deemed to be made to further sales rather than add to the world's knowledge base.

Wikipedia does allow company listings provided your company is deemed "significant" by Wikipedia. Most financial institutions should qualify. However, don't try to put a listing in for your SuperDoubleNet Gold Card. It won't fly.

Also, copy must be devoid of hype, be totally unbiased, and basically read like an encyclopedia entry (see guidelines for company listings here). That said, the online encyclopedia does allow limited use of logos and pictures, so you want to make sure your entry is attractive without being a brochure. Any violations of Wikipedia's guidelines will be quickly deleted. 

Below is the first part of the 1,500-word entry for Citibank. Note the use of its current logo and an attractive branch photo.

In comparison, the entry for Boeing Employees Credit Union is just 170 words and devoid of graphics.

In addition, you might look for other Wikipedia "marketing opportunities" where your bank could be listed as a service provider or reference. Again, it has to add to the facts of an existing article, not be positioned solely for marketing purposes. Of course, this is as gray an area as you can get, so there is no harm in trying as long as you keep the edits in line with the spirit of the website.

For example, in the Wikipedia listing for "remote deposits", under the sub-heading, "usage of remote deposit," the following financial institutions are listed (see screenshot right):

• Bank of America
• Citibank
• Commerce Bank
• U.S. Bank
• USAA (Offers this feature to consumers using a common scanner)
• Pentagon Federal Credit Union (offers this feature to consumers, although the physical check must be mailed in)
• Wachovia Bank
• Wells Fargo (also offers this feature to consumers using special ATMs)

If you have a good remote deposit capture service, add your name to this list. It may or may not be accepted, but it's worth a try.

Notes:

1. You should make sure your tags and titles are up-to-date and appropriate (see previous article here). 
2. Worldwide unique visitors in Sept. 2006, according to comScore (press release here)

Marketing remote deposit capture services

As mentioned in our earlier post (here), there is relatively little advertising activity on the search engines for remote deposit capture services.

However, when it comes to website marketing, a number of community banks are featuring the innovative service front and center (see screenshots at the bottom of this article). 

• First Mutual Bank <firstmutual.com>
• 1st National Bank of Arizona <fnbaonline.com>
• National Bank of Arizona <nbarizona.com>

However, even though these banks are using their most valuable online real estate to promote the service, in most cases there is little information on how it works, how much it costs, or whether it would work for smaller businesses.

To properly market remote deposit capture to smaller businesses, look at how how high-tech companies market new products – almost always with an an online demo and frequently with white papers, spec sheets, and free trial offers.

As mentioned previously, Wells Fargo is using a white paper to explain the service and capture leads (see post here). In terms of demos, Nevada State Bank, <nsbank.com> a $3.4 billion unit of Zions, has an excellent one (see screenshot below). 

 

Action items:

1. Create an online demo to educate the market on how remote deposit capture works
2. Post detailed information on features, benefits, pricing, how to use, FAQs, testimonials, amount of deposits captured to date, and so on
3. Capture leads from the product-info page
4. Use Google and other search engines to market the service
5. Offer a free trial

Homepage screenshots:

First Mutual Bank 

1st National Bank of Arizona

National Bank of Arizona

Holiday marketing continued

As mentioned last week (here), U.S. banks are starting to get more creative with their websites, with 12 of the 30 largest (note 1) injecting a bit of holiday spirit into their websites.

This year, three of the top-30 banks had major holiday themes running on their homepages; in 2004, none did. And today we viewed another nine with minor holiday sprinkles, making 12 in total. Two years ago, four banks had minor holiday-themed promotions.

We expected to see more banks marketing gift cards, one of the hottest holiday gifts, especially during the last few days before Christmas. Only four banks mentioned gift cards on their homepages on Dec. 24 (note 2):

• National City
• BB&T
• North Fork Bank
• Commerce Bank

Here is a rundown of those with major holiday themes:

1. Citibank: Citi had the best overall holiday theme as  it continued pushing its 5% e-Savings Account, with a clever 5% "ornament" hung next to traditional Christmas decorations (see screenshot below).
   
   
2. PNC Bank: Runner-up was PNC with its unique brand of holiday marketing, a tongue-in-cheek look at the cost of the items listed in the popular Christmas song, Twelve Days of Christmas. It's a holiday tradition at PNC which has been tracking the holiday index for 22 years (see screenshot below).
   
   
3. Bank of America: The largest online bank used a holiday theme, and $100 off a Dell PC, to encourage users to join the other 20 million BofA customers using its online banking. Customers hitting the bank's homepage were greeted with an animated banner displaying a wrapped package, which after two seconds changed to the Dell deal (see before and after screenshots below).
   
   Showing before and after package animation:
   
   

Other top-30 banks with holiday-oriented images on their homepages:

• Chase Bank: snow globe with 0% credit card offer
• Wells Fargo: packages
• Washington Mutual: snowball with 30-second credit card application
• Citizens Bank: packages with a debit card rewards promo
• National City: snowflakes with gift card promo
• BB&T: packages with a gift card promo
• Countrywide Bank: snow and packages with a loan promo
• North Fork Bank: Radio City promo with $15 off coupon and gift cards
• Commerce Bank: packages with gift card promo

Notes:

1. According to Online Banking Report's list of the 150 largest U.S. financial institutions as of 31 March 2006 (link here).
2. Searches conducted during late morning (EST) on Dec. 24, 2006, from a southwest Florida IP address. Although gift cards were not mentioned on US Bank's homepage on Dec. 24, we had seen them advertised on previous visits, although not necessarily on ithe homepage.

First Direct's holiday pop-up greeting

I am a sucker for holiday graphics on websites. It doesn't have to be dramatic, a few snowflakes or candy canes in the background is fine. For example, Citibank's e-Savings banner on its homepage today (see inset, click to enlarge). Just like a holiday wreath on the door of the branch, it shows your customers and employees that you have some holiday spirit.

Unlike two years ago (see prior post here), this year many banks and credit unions are running holiday promotions for gift cards and other products (see rundown here) and/or have dropped holiday sprinkles into their websites. The most dramatic is the popup from U.K.'s First Direct <firstdirect.com>. This is over-the-top, but it brings a grin, not a bad thing during the end-of-year rush.

First Direct homepage with popup showing (click to enlarge)

Close-up of popup after choosing "let it snow" option
The loud holiday music that accompanies the snow globe can be turned off with the button in the lower right. Selecting "all snowed out" or "bah humbug!" from the first screen displays a brief "seasons greeting" message before automatically closing the popup.

ING Direct to launch online checking account in February

As previously reported here, direct-banking giant ING Direct (U.S.) <ingdirect.com> will soon be in the checking account business with the Feb. 1 launch of Electric Orange.
(No word on whether the German band of the same name will be part of the launch event.)

In an interview published yesterday in Delaware's The News Journal, CEO Arkadi Kuhlmann revealed important details about the effort:

• It would be made available to about 10% of the bank's 4.4 million customers in December
• The nationwide launch is scheduled for Feb. 1
• ING Direct is planning to add 500 workers at Wilmington's headquarters to support the product, an expansion of more than 50% from its current headcount of 900
• The account will NOT have paper checks, but it will allow customers to print one from their home computer if necessary
• The interest rate will be 3%, about a third less than its savings rate of 4.4%
• Surcharge-free ATM access will be provided through the Allpoint network of 32,000 machines

Product postioning
While the account sounds relatively standard for an online-only checking account, the ability to print a check from home is an interesting feature we haven't seen before. It sounds like ING Direct will be marketing ease-of-use benefits, most likely centered on the bill payment function.

The catchy name combined with ING Direct's marketing flair (see picture right from its Chicago cash-cow promotion) should make for an interesting product launch. We'll be paying close attention here and testing the account as soon as possible.

Analysis
There is little reason for most consumers to choose a branchless bank for their main checking account when they can get free checking PLUS branch services at their local financial institution. ING Direct has long understood this and has not squandered resources on a limited-appeal product.

However, with more than 4 million customers, they have a large enough base to make a profit on a checking account, even a (relatively) lightly used one.

Due to the bank's ease of use and well regarded brand, it should be able to convince a portion of its base to use Electric Orange checking as an auxiliary account, perhaps as the household bill-pay account.

If the bank moves 5% of its $47 billion in savings deposits into the checking account, it would save $3.5 million annually in interest expense. Add another $3 billion in net new deposits at a 3% spread and Electric Orange pulls in $10 million per year, enough to cover expenses anyway.