Sep 12
25
More banks market prepaid debit cards to all demographics, incomes
Prepaid debit cards carry the reputation for appealing primarily to the un- or underbanked demographics. Individuals belonging to this sector typically rely upon cash, check-cashing services and alternative financing solutions to avoid traditional bank products, such as checking or savings accounts. However, new data reveals more financial institutions are expanding their prepaid offerings to not only target underbanked consumers, but also other demographics that are seeing the merits of these products.
A recent MarketWatch report highlighted this trend – which has been adopted by several regional and national banks – as a way to extend new products to existing customers. In recent months, there has been a push by banks to offer low-cost prepaid cards that carry a more affordable fee structure to underbanked Americans. While this is the preferred payment method for many belonging to this demographic, fees relating to activation, maintenance, ATM withdrawals, balance inquiry and other services, can be high and eat into a user’s remaining balance.
Now, financial institutions are advertising their lower fee structures to more affluent and financially stable groups, and marketing the cards as a money management tool, MarketWatch reports. As more Americans reevaluate their finances and spending habits in the wake of the recession, prepaid cards have emerged as a viable alternative to credit card spending. Data from the Mercator Advisory Group reveals that the market for prepaid cards increased 20 percent in 2011 to $483 billion, and is expected to climb to $594 billion by 2013, according to the news source. Separate data reveals that affluent and educated Americans are making up a larger percentage of individuals who now utilize prepaid products.
In addition to the wealthier segment, some financial institutions are also marketing these products to college students as well. Offering prepaid cards allows institutions to build relationships with the under-21 demographic without violating the rules set by the Credit Card Accountability, Responsibility and Disclosure Act, which makes it more challenging for banks to market credit cards to these students. Young adults can cover the costs of textbooks, food and other expenses with a prepaid card without the risk of overdrawing their accounts or racking up debt. Parents may also rely on the products to send their children money for emergencies or help them learn how to manage their spending effectively.
Sep 12
20
Recent customer dispute demonstrates influence of social media
Few businesses and financial institutions will argue with the claim that social media services are changing the way customers form relationships with companies. However, some may not yet fully realize the power that social media can have on shaping consumer opinions and influencing their behavior.
Comedy writer Matt Fisher recently spoke out via tumblr.com against a popular insurance company following the death of his sister. The subscriber accused Progressive Advanced Insurance of taking the side of the driver whose vehicle hit his sister’s car, resulting in her death, according to Insurance News Net. The comments sparked international headlines and prompted many consumers to lash out against the insurance company via Twitter, Facebook and other mediums, with many threatening to cancel their policies.
The company responded that its actions fell within their legal parameters of responsibility, but the statements made by the company did little to assuage consumers’ anger.
Further, the Fisher family launched a lawsuit against the driver and Progressive, and was awarded $760,000 in damages.
The case highlights one of the many reasons financial institutions and businesses should stay abreast of what their customers are posting on social media websites, as negative commentary may damage their reputations and impact customer retention and acquisition. Many companies invest in social media management tools, which alert them when they have been mentioned on different channels.
In addition, some programs allow users to submit posts through the service, which will then be posted on all social media websites to which the business belongs. These may be effective strategies to stay relevant in a competitive marketplace and keep their reputations intact.
Social Media by .
Sep 12
17
Top changes in financial marketing trends
Financial institutions have been forced to make considerable changes to their marketing strategies in recent years, due to the economy, new regulations and technological innovations. As a result, the same tactics most individuals grew accustomed to in earlier years are starting to be phased out as banks look to new ways to appeal to their current consumer demographic and attract new types of customers.
One of the most prevalent and notable trends that has emerged in recent years is a stronger reliance on social media services and mobile banking, as opposed to in-branch services. In fact, many larger institutions, such as Bank of America, have announced that they will be closing many ATM kiosks or branches across the country as online and mobile banking options have made it more costly to keep these locations up and running.
Instead, consumers are being encouraged to take advantage of new innovative online and mobile channels, which allow customers to engage in online chats with banking representatives, transfer funds, download alerts, access saving tools and remotely deposit checks, according to the Financial Brand. Further, banks with a strong online customer base may have a more affordable cost-basis than those whose business is primarily done in-person. As a result, more institutions are offering to exempt customers from fees and other costs if they enroll in online banking or agree to sign up for e-statements. While most experts dismiss the claim that banking branches will one day become obsolete, recent years have shown a dramatic decline in the number of physical branch locations.
Banks are not only changing their marketing strategies, but also the demographics they try to attract. Historically, most institutions targeted younger demographics of Generation Y because this age group presented banks with opportunities to acquire new customers. Members of Generation Y are typically undergoing significant life changes, such as purchasing a home, shopping for new credit products, raising a family and making large-scale investments.
As a result, most banks shaped their marketing initiatives to appeal to this group of consumers. However, analysts are now noticing a shift toward the underbanked Americans who lack traditional credit and banking products, the news source reports. In recent months, some banks have rolled out new prepaid debit cards and other products that are typically associated with underbanked Americans as a way to entice potential customers to view other products.
Sep 12
7
Multichannel marketing: Opportunity from the marketer’s POV
Marketers have bombarded consumers with messages since the advent of advertising. Today, communication channels added daily to the mix create an unprecedented, daunting din for marketers to break through.
Most consumers engage multiple media at a time, yet they don’t truly multitask. Our brains aren’t capable of that. We focus on texting, TV and surfing not all at once, but in rapid succession (and not very well at that). What we typically refer to as multitasking is really mere flitting.
Therein lies the marketer’s opportunity. If you can grab attention when an audience flits to your message, you might just sell something.
To grab a consumer mid-flit, you’ll need to be good a few things:
• You’ll need to be good at getting flitted to. This means showing up in the same place where your customer happens to flit. Of course the print-broadcast-direct mail-only model is obsolete, and it’s no longer enough simply to add “the Internet” to the mix. “The Internet” isn’t a single channel. It’s a growing array, from Google to Pinterest to Foursquare to more being spawned as I write. The list keeps growing, so you can never rest. On the positive side, more channels mean more opportunities to connect.
• You’ll need to be good at not getting flitted from. It’s one thing to get passersby to look when you yell “Look here!” It’s quite another to be so engaging that they won’t abandon you for the next marketer who yells “Look here!”
• You’ll need to move customers to action. Anyone can make a distracting noise, but not just anyone can make a sale. That’s why not just anyone is a marketer, notwithstanding your neighbor who has “a great idea for a commercial.”
• You’ll need to be an adept two-way communicator. Today’s media allow for full interaction with customers, and customers can tell—and they reward—marketers who listen well and respond well.
Finally …
• … You’ll need to try lots of things in lots of channels—continually—while tracking results. That way, over time, you can learn what works, what doesn’t, and hopefully do more of the former and less of the latter.
A good starting point might be to emulate an Eddie Bauer, Cabela’s, or Omaha Steaks. None is just a catalog marker, retail chain, or e-merchant, but is all of the above and more. Each channel carries its weight in sales, branding and profitability.
Marketers who find the new and growing multichannel world daunting might consider its pluses before leaping in despair and to a less challenging career. One study suggests that customers of multichannel companies spend 30% more. Moreover, today’s shoppers use multiple channels to do homework before buying. Thus you can use each channel to build your brand, reinforce key messages, and promote the other channels. Assuming your brand is consistent across channels—if not, it’s a weak brand—there are economies of scale, since branding elements need only be invented once.
Besides, multichannel marketing is fun! Pity our marketing forbears. Once they mastered print, broadcast and direct mail, they were done. How boring is that?
Marketing by .
Here’s something you never want to have to post on your blog: “Busted. Nailed. Snagged. As many of you have figured out … Peter isn’t a real hip-hop maven and this site was actually developed by Sony.”
That’s what Sony ended up posting after a badly bungled attempt at creating the illusion of a third party blogger who was posting raves about PlayStation®Portable. The above post roughly translates to: “We tried to dupe you. We underestimated your intelligence, and you caught us. Oops, and sorry.”
Direct marketers have long known that testimonials are persuasive. That’s why most direct response print ads, infomercials and long-format TV spots pile on testimonials from “satisfied customers” and resort to (admittedly fallacious) arguments like, “Millions of happy customers can’t be wrong.”
It is a common practice for marketers to write testimonials for and on behalf of satisfied customers, with customers agreeing after the fact to have “said” what was written. You may or may not agree that the practice is ethical or harmless.
Taking the practice a step further, some advertisers pen fictional quotes from fictional customers. A fake blog, or flog, is arguably the inevitable if not natural next step.
I’ll leave it to you to judge the morality of creating a flog to promote products. But if you decide to proceed, do it well. Sony did not. For one thing, Sony’s ad agency Zipatoni didn’t bother hiding the fact that they owned the URL. I’d love to tell you that that was an act of openness and integrity on Zipatoni’s part, but alas, it appears to have been an oversight. Else, why would the supposed writer post one vociferous denial after another in response to commenters who, clearly onto the ruse, repeatedly challenged the flog’s authenticity? Moreover, the wannabe hip-hop rhetoric came up short in the authenticity department, insulting readers’ intelligence and making Sony look all the more out of touch.
Even Sony’s apology was a bit presumptuous: “Guess we were trying to be just a little too clever. From this point forward, we will just stick to making cool products, and use this site to give you nothing but the facts on the PSP.” Note to Sony: An apology wrapped around a boast smacks less of an apology and more of, well, a boast.