Mass-customization was coined by Don Peppers and Martha Rogers in their influential book, The One to One Future (1993, Doubleday). Boiled down, it means harnessing information processing power to tailor products for each and every customer, one customer at a time. You accomplish this by creating a dialog with each customer and being smart enough and flexible enough to provide a product/service bundle that exactly meets their individual specifications, even as those specifications change over time.

Only recently, with the advent of personal computers and the Internet, has this been possible across a wide segment of the marketplace. The examples cited in The One to One Future, and their follow-up Enterprise One to One (1996, Simon & Schuster), are primarily outside financial services, but one of authors’ favorites is an ATM that remembers your usual withdrawal amount.

To some extent financial institutions are already masters of mass-customization. Each customer receives a highly individualized monthly statement often consolidating information across a number of accounts. Customers control their balance level, transaction types, level of fees incurred, check styles, electronic usage, authorized account signers, etc. It’s not like trying to customize a box of detergent for each and every customer (see p.159 in The One to One Future for the authors’ solution to that).

But is your “customized” checking account any different than the one from the bank across the street? Try this test now: Call one of your new account reps (anonymously) and ask what is different/better about your checking account. What did they say? My guess is most reps will hem and haw, or resort to a discussion of fee-free options. Is this what you want to be known for?

Here is where online delivery can be used to put some distance between you and your competition. Don’t think of your Web site as an extension of the bank where every user begins on the first page and follows the links in a logical manner — a place where you tell them what they should know. Turn the whole notion of a Web around and think of it as an extension of your customer. A place where they go to get quick answers and tell you what they need. Account access is the obvious cornerstone of a personalized Web site. But within 18 to 24 months everyone will offer that. It will be a short-lived differentiating factor. You’ll have to go much further to maintain a competitive edge.

A few banks have already taken the first steps in providing personalized services through their Webs. Bank of America <www.bankamerica.com> was the pioneer with its Build Your Own Bank program launched in October 1995. Fleet <www.fleet.com> launched a similar feature in March 1996 and now has 30,000 registered users. First Interstate (now part of Wells Fargo) (OBR 4/96 p.12) and Deposit Guaranty <www.dgb.com> (OBR 4/96 p.16-17) also introduced simpler variations of the personalized Web site. Summit Bank <www.summitbank.com> is the latest to hatch a personalized Web (see p.9), but no one has yet harnessed all the powerful new online personalization tools. Following are four concepts to that could help move your online information services to the next level.

Custom Web Views
There is no reason to have just “one” Web. Creating individual Webs for each customer, or groups of customers, doesn’t have to cost more than a standard Web. Storage costs are so low as to not even warrant a line in your spreadsheet. The cost drivers are design, content creation, and maintenance. Those are influenced by a large number of factors, the degree of personalization being just one.

The simplest way to offer customized Webs is to build different “front doors” for different customer segments. For example, Microsoft encourages small business owners to enter its site via <www.microsoft.com/smallbiz/> (see OBR 12/96 p.10). Money users are sent to <www.microsoft.com/moneyzone/>. You can also get to these areas from the main door <www.microsoft.com>, but it takes longer and you may not end up in the optimal spot.

Financial institutions can adopt a similar structure, for example, as the front-door for mortgage holders.

Virtual Personal Bankers
Humanizing cyberspace. It sounds like an oxymoron. But, if you pride yourself on delivering “personal” service, the Web and other automated delivery mechanisms can actually increase the degree of personal attention provided to customers.

One way to do that is to assign a Virtual Personal Banker (VPB) to each of your Web users. A real human being that users can go to time and time again for answers and advice. VPBs could be assigned randomly, or better yet, each could serve a “book” of customers that shared some characteristic: middle of the night Web users; 30-somethings with kids; PFM users; recent home buyers; longtime customers; new customers; etc. What-ever associations support your strategic initiatives. Over time, Web users will develop a rapport with their VPBs.

Give your VPBs their own space on the Web (see SFNB screenshot above). Let them personalize it and become the online host for their customers. Not only will this help your VPBs connect to their clients, it’s possible a good VPB could create a sense of community among their book of customers.

Some other features for a VPB Web area:

• unique look-and-feel
• own newsletter/commentary (partially ghost-written by central copy writers)
• individual sales material
• biography, picture, etc.
• direct e-mail link
• online private chats (other users cannot see the dialogue) during office “hours”
• online public chats (other users can see, and join in) at preset times
• personal services such as loan status reports (which can be completely automated but signed by the VPB)

Users receiving VPB services would be strongly encouraged (required?) to complete a short online profile so their VPB could better tailor appropriate products and services. Upon completion of the profile, customers would receive periodic e-mails including:

• promotional specials
• news
• soft-selling advice (e.g., “only 15 days left to make your IRA contribution”)
• personal greetings: anniversary of opening an account, birthday, etc.
• general schmoozing as appropriate for each user

The VPB “personal” communications could be highly automated based on the interests expressed by the customer in the initial profiling questionnaire and in subsequent communications. Ghost-written communications could come out of marketing and then be personalized as appropriate by VPBs or sales managers.

The latest rage on the Internet is “push technology” which refers to a host of tools and systems for delivering information “directly to the browser.” Meaning users can opt to have information shipped (pushed) to their computer rather than going out to the Web and retrieving files one at a time (pull). From a marketing standpoint, it’s nothing new. It’s called “direct marketing.” Banks have been “pushing,” I mean direct marketing, credit cards ever since the first BankAmericard drop in Fresno, CA, September 1958.

Push is all the rage on the Web, partly because Web publishers are finding it difficult to keep users coming back on a frequent basis, and partly because it just makes sense. You subscribe to a daily newspaper so that you don’t have to remember to pick it up on your way to the office each day. Why not use the same model on the Web?

Both Microsoft’s Internet Explorer 4.0 and Netscape’s upcoming Constellation release will facilitate the push process. In IE 4.0, users can “subscribe” to any Web page that contains the proper “last updated” HTML metatag.

Users of Web-based subscription services will be able to choose from “notification” mode or “download” mode. In notification mode, users are told only that a Web has been updated. It is still up to the user to take action to retrieve the new information (in IE 4.0, Web sites in the user’s Favorites folder that have been updated will have a bright red dot appearing next to the site’s icon). In download mode, the browser would automatically download the entire updated Web site for quick off-line browsing directly from the hard drive. Both Microsoft and Netscape appear to be headed in the same general direction with push, but with enough differences that publishers may have to build Netscape and Microsoft versions of their subscription content. For financial institutions, implementing push is not a life or death issue. The lure of account access, and later bill presentment, will pull users to your Web. But that doesn’t mean you should ignore outbound messaging in your online content mix. With the upcoming advances in browsers, Webs-by-subscription, will become the norm.

Getting started with push
We recommend a go-slow approach. Start with outbound e-mail newsletters and/or account alerts, then graduate to more exotic subscription services as they become more standardized across the Web (late 1998).

1. Locate a customer segment that would benefit from a continual flow of bank-generated information. For example, adjustable rate mortgage holders (and unlocked mortgage applicants/prospects) have a keen interest in current mortgage rates.
2. Develop an ongoing series of e-mail messages that focus on current mortgage rates, market trends, and from time-to-time, info on appropriate financial services. E-mail messages should be concise, casual in tone, and devoid of hard-sell.
3. Develop two versions of each message, one in plain text that works with any e-mail system, the other in HTML code that will not only look slick in the latest browsers, but will also drive users to the right spot on your Web via imbedded hyperlinks. For example, after mentioning a new mortgage program, users can simply click on the hyperlink to go directly to a loan application on your Web.
4. Post a simple sign-up icon on your Web. For example, the Ziff-Davis’s AnchorDesk’ “sign-up for e-mail alerts” icon at <www.anchordesk.com>.

Build Your Own Account

Let customers build their own accounts by specifying as many parameters as possible. For example, most checking account customers are limited to just four choices when selecting the features of their new DDA:

• interest-bearing vs. non-interest-bearing
• ATM card or off-line debit card
• choice of check style
• overdraft protection options (if applicable)

Why not expand that selection using Web-based forms? Let users select daily withdrawal limits by cardholder, e-mail alerts based on balance level and account activity, the ability to enable/disable off-line debit capabilities, enable/disable out-of-state ATM access, and more (see next page).

Building your own account could also be applied to other retail products. Loan customers could set-up their own repayment schedules, with larger payments in the spring and fall, and lower payments during summer vacation time and December holidays. Once a customer has expended the time and effort to build their own account at your bank, they will be less inclined to jump at the next teaser rate that lands in their mailbox.