As much as we’d like to believe otherwise, many customers don’t think much about their bank, much less its Web site. So it’s up to you to get them hooked on your Web before someone else comes along with an enticing offer. Here are twenty activation ideas. See if you can find a couple worth trying at your bank. The most exciting ones, in our opinion are marked with the light bulb symbol (at left).

 

1.

ACH Initial Transfers

Allow customers to fund their account immediately and on an ongoing basis with ACH transfers from other institutions. USAccessBank (OBR 2/99,
) is using this approach with good results.

2.

Bill Payment Guarantees

Guarantee that users won’t incur a late charge for any bill set up on automatic recurring payment. CyberBills), because they are in control of the billing statements, is the first to make such a clear-cut guarantee.

3.

Bill-life Insurance

Create a credit life-type program guaranteeing that any bill set up on automatic payment will continue to be paid for a period of time in the event of death or disability.

4.

Cash Bonuses

There is a certain cache to cash, especially when it’s a $75 bonus to become a new Discover Brokerage customer. Note: The bonus applies only to online applicants (screenshot above right).

5.

Contests, Sweepstakes, and Premiums

Even upscale users are attracted to freebies, look at the success of frequent flyer programs. We think a sweepstakes or ongoing premium program tied to bill payment usage could be very powerful. Once per week/month, pay someone’s bill for them, or give away a PC, whatever grabs users attention. Or set-up a frequent payers club with rewards for active usage of bill payment.

Discover is paying $75 for new accounts brought in by their button on Yahoo! Finance.

 

6.

Customer Courtesy Calls

It might sound expensive at first, but calling the customer to see if they have questions might be one of the most effective, and ultimately least expensive, activation techniques. New bill pay vendor, Call Me Bill LLC for example, calls new bill pay registrants on behalf of client banks to help them get started with the service.

7.

Customize Accounts at Initial Sign Up

Allow users to start personalizing their account as they sign up. This will increase user involvement, make your Web more memorable, and improve the odds that users will come back for more.

8.

Demo on Site

Cascade Bank finds it effective to send business banking officers to client sites to demo Net banking with live customer data.

 

 

9.

Deposit Auctions

Having been one of the early eBay junkies using the online auction when they had just one hundred thousand lots on the block (today = 2 million), we’ve long thought banks should tap into the phenomena with money auctions (OBR 11/97). To generate a buzz, you could put some money up for bid on eBay, or even work with the company to set up a whole new category devoted to it. Or you could do it on your site. Either way, it’s bound to generate good PR, interest from branches, interest from customers, and interest from prospects.

Bidding could be established in three ways:

•  By Interest Rate: Bidders enter the lowest rate they would accept for the deposit product on the block; for example a 5.5% interest rate for $10,000 1-year CD, lowest bidder wins.
•  By Dollars Returned at a Future Date: Bidders enter the lowest amount they would accept in the future for a given amount deposited today; for example, $10,500 returned in one year for $10,000 deposited today; lowest bidder wins.
•  By Dollars Deposited Today (i.e. zero coupon CDs): Bidders enter the highest dollar amount they would pay today for a set dollar amount returned in the future, similar to how U.S. Treasury securities are sold at auction; for example, a bid of $9,500 deposited today for $10,000 in one year; highest bidder wins.

The most intuitive auction process is the last choice, dollars deposited today, since it allows the highest bidder to win. But in terms of publicity and perceived benefits, bidding by rate may be the most exciting method. It allows you to set a high rate as an opening bid, say 20% for a 1-year CD, in the same manner Net auction companies start the bidding for $1,500 PC systems at just $1.

Imagine the power of the following banner (upper right) running across the top of Yahoo! whenever someone searched on bank rates:

www.YourBank.com/auction/

Bid now on 1-year FDIC-insured CDs with starting bids of 20% APR*

Hypothetical banner ad.

*One can only speculate on how rate disclosures and other Truth in Savings issues will be addressed.

Eventually, as more people participated, winning bids would likely be within a couple basis points of market rates. In the short term, you might end up paying a hefty premium. But if you consider the publicity benefit, that’s probably a good, even desirable outcome. Can’t you just see the stories blasted across the Net on CNNfn, MSNBC, and so on?

In Yourbank.com’s first-ever auction of FDIC-insured CDs, the lucky winner will receive an 8.7% rate on a 1-year CD… double what Citibank is paying today.

A schedule of weekly auctions could add intrigue to your Web site, not to mention the following benefits:

•  Users could sign up for an email list that announced each auction and/or recapped the winning bids.
•  Since users would have to register with you to bid, you would have a ready list of prospects.
•  Other types of auctions could be established, such as real-estate owned, repossessed vehicles, surplus equipment, charity auctions, and so on (see OBR 3/98 for more on charity auction hosting).
•  You could leverage the program with banner ads containing real-time updates on the latest similar to Net auction pioneer OnSale’s banners produced by Lot21 Interactive Advertising Group of San Francisco.
•  The auction could be used to test/launch more exotic CD products, such as rates tied to a stock market index or the price of Beanies on eBay.
•  You could allow users to resell their CDs via the auction allowing users to cash in on interest rate fluctuations, or bail out of a deposit if they need the money.
•  The auction, if successful, could be licensed, co-branded, or sold to Amazon.com, eBay, Yahoo!, or other Web auctioneers.

 

10.

Email Encouragement

Program your server to automatically send a series of email reminders to non-active registrants. Each message should contain HTML links into the appropriate area of your Web.

Example: Email series to activate new users

Timing*	Email Message
1 hour	Thanks, we are processing of validating your registration request.
24 hours	Everything appears to be in order, processing should be completed by tomorrow.
48 hours	Welcome to xyzbankonline.com, you can begin using at any time by clicking here.
5 days	We are looking forward to seeing you at our Web? Are you having any difficulty connecting?
15 days	Your latest monthly statement has been prepared and can be viewed by clicking here.
30 days	Visit today and see how you can be automatically entered each week into a drawing for a free PC.
60 days	There’s a credit line of $10,000 waiting for you, click now for the cash.

*Time after initial application is submitted.

11.

Email Lists

Put every retail information database you have on a server, and allow users to query it and sign-up for automatic email updates. For example:

•  loan rates
•  deposit rates
•  loan promotions
•  community info
•  real-estate owned
•  repossessed vehicle inventory
•  new Certified Merchants
•  new eBillers
•  new ATMs/branches
•  seminars, speaking engagements
•  charitable opportunities
•  newsletters
•  new Web areas
•  promotions
•  press releases and “in the news” notices
•  investor information
•  small business information and tools

Employee Sales/Activation Incentives

Provide incentives to branch sales people that are heavily weighted to putting active users on the books. For example, divide a $50 bonus as follows:

$1	when customer registers (to keep score)
$9	when customer makes first login
$15	when customer makes first bill pay
$25	when customer logs in after 90 days

 

12.

Everyday Essentials

Weather is the fourth most popular activity on the Web, used by 46% of users, and stock quotes are in seventh place, used by 26%. This stuff is so inexpensive to offer, why make users look elsewhere for it? As simple as it sounds, a good weather forecast delivered via your Web could be one of the most powerful activation tools around.

13.

Exit Polls

Find out where your service is weak or confusing the old-fashioned way, by asking customers. Simply pop-up a three-question survey as new users exit after their first session and get some candid feedback. Have each survey, or every nth one, emailed to you so you can see the raw data weeks in advance of the marketing department’s PowerPoint presentation.

14.

First-visit Transactions

Encourage users to make a transaction during their first visit. DLJ Direct, the online discount broker, allows new users to buy up to $5,000 in stock as soon as their online application is submitted and approved online (subject to credit approval). The company has used this approach since their days on Prodigy (as PCFN) in the early ‘90s, so it must be working. DLJ has the risk that you won’t pay if the stock goes down, but if a new user has a solid credit history, there’s a slim chance they will try to renege on the deal. And with customer acquisition running $250 or more in the industry, it must be cost effective. ð

 

What type of transaction could a bank encourage on a user’s first visit?

•  Immediate usage of a newly acquired credit card. First USA allows its Yahoo! co-branded cardholders to go Web shopping with its card immediately following online card approval (OBR 2/99.
•  Offer bonuses for deposits initiated online via an ACH form (see Telebank’s $25 offer, OBR 2/99.
•  Allow users to schedule a bill payment immediately using a credit card or ACH entry.
•  Allow immediate bidding in money, REO, or repossessed auto auctions on site (see #9).

15.

Free Money Samples via Email

What better way for a bank to get free publicity than by opening its virtual vaults and handing out free samples? Your customers would hand out the cash via email and bill pay. It’s the type of “viral marketing” that put HotMail and other free email services on the map (see “Send a Buck,” OBR 6/98).

16.

Pepsi Challenge

Remember the Pepsi challenge? Coke drinkers were challenged to taste both beverages and choose their favorite. How could Pepsi lose? Either they converted a customer to Pepsi, a positive outcome, or the consumer remained a Coke drinker, a neutral outcome. It’s a classic marketing strategy for taking on the predominant brand.

Virtual bank up-starts could to the same, e.g., “The Virtualbank.com Challenge.” Users would be encouraged to compare the email response time, bill pay support, credit approval turn-time, or whatever service you were pitting against MegaBank. If you win the comparisons, you publicize it. If you lose, you go back to the drawing board.

This encourages activation by giving users a reason to put your services through their paces. And if you’ve done a good job, they will like what they see.

17.

Statement Envelope Teasers

Wells Fargo puts a message on the front of the envelope that goes something like this:

You could already know what’s inside. www.wellsfargo.com

Concise, powerful, and brilliant.

18.

Stock Giveaways

This is for start-ups only. Give customers shares of stock in the new bank. Shares
could be tied to number of accounts opened, e.g., one for checking, savings, credit card, and so on. Or they could be tied to balances, e.g. one share per $1,000 of credit card balances transferred or one share for each $1,000 deposited (deposit premiums may count as taxable interest, consult your compliance dept.). For the first couple banks, this could bring a windfall. It feeds on the Internet hype while still delivering genuine value to the bank, its customer-shareholders, and other investors. Several companies have pioneered this concept including TravelZoo.com with 700,000
“co-owners” and Exit23b.

Although no one in the banking sector has tried it, we hear rumors of at least one virtual bank in formation that is looking to give it a shot. And why not? Any public, or hoping-to-go-public (who isn’t at this point?) Net-only financial institution can create a buzz online with a group of customer-shareholders that have a vested interest in seeing that the bank is successful. They will email your story across the world, advertise your bank on Internet message boards, and if you make it easy enough (for example with a preapproved eBillPay account, OBR 2/99), they may even use your products.

19.

Zero-risk Guarantees

If Net banking is so safe, why don’t the big players say so? Because they can’t afford the legal liability if something does go wrong. That creates an opportunity for newcomers to offer clear-cut, unequivocal guarantees that users won’t lose a cent to fraud or error. Period. The words can be backed by insurance from Travelers (OBR 9/97).