AOL recently made news with its $299 PC deal (plus $50 shipping) reported in the Dec. 3 Wall Street Journal. Customers willing to commit to AOL’s standard $23.90/mo dial-up plan for 1 year are eligible to purchase a well-equipped PC/printer bundle from Systemax. The package, sold for $699 plus shipping at sister company www.TigerDirect.com , features an Intel Celeron 1.7GHz processor, 256MB RAM, 40GB hard drive, CD/floppy drives, 56k modem, Ethernet, Windows XP, 1-year warranty, Sun’s office software suite, and comes bundled with a 17” monitor and Lexmark Z605 printer. See  http://www.299pcdeal.com/    for more details.  

¹For example, Dell currently offers a similar PC with 17" monitor for $399 (+ $99 shipping), that includes 6-months free AOL access.

Banks could piggyback this deal with extra incentives to signup for a new checking account, online banking, bill pay, overdraft protection, or whatever. With additional rebates, you could drop the price to $249, $199, or even lower. However, there are two big drawbacks: a $280 AOL subscription commitment which could put you at odds with local ISPs and customers who consider it a bait-and-switch offer; and the 21.9% APR financing option (at checkout) through Wells Fargo Financial Services. Although, the current offer is available only through Dec. 31, 2003, you might be able to swing a deal directly with Systemax  http://www.systemax.com/  or with a name brand such as Dell, to offer a Yourbank Optimized PC, without the AOL commitment.¹

Overture

Overture, the IdeaLab venture that pioneered the pay-per-click auction process originally under the name GoTo.com, also reaches a significant number of Internet users: 80% of the total according to the company. The majority of the volume is through MSN, AOL, Yahoo, and others that display its paid listings for a cut of the revenue. Overture.com itself attracts 6 million unique search users each month.

Overture PPC ads displayed on Yahoo.

Overture’s 100,000 advertisers have their listings displayed at Overture.com before any non-paying websites. Some banking terms have more than 200 paid listings. However on partner sites, such as Yahoo (screenshot above), only the top three or four advertisers are displayed on each page, leading to intense bidding for top slots.

For example, in early May the top four bidders for “home equity loan(s)”¹ were all paying about $4/click. Converting one of every 100 visitors would result in an acquisition cost of $400/loan.

Other financial services terms had even higher bids, especially anything to do with debt or credit. For example, the top four bidders for “debt management” were willing to pay more than $9/click (Table 5, right).

More targeted search terms such as “home equity loan(s) Seattle” had much lower bids, in this case just an average of $0.11 per click for the top-four spots.  However, geographic targeting doesn’t always result in lower CPCs. In the case of “mortgages yourstate” average costs for the top-4 bidders were 15% higher than for the unmodified “mortgage”.  

¹On Overture, but not Google, singular and plural versions are covered by a single bid, e.g., mortgage and mortgages return the same search results.

Table 1

10 Most Expensive Financial Keywords

average pay-per-click cost on Overture, May 2003

Source: Overture, 5/29/03

Yahoo, MSN, AOL

Advertising placed through Google and Overture will get you placed on AOL, Yahoo, and MSN. However, all major search engines except Overture limit the number of paid ads to eight or fewer per page of search results.

Table 2

PPC Listings Displayed at Major Search Engines

includes pay-per-click sponsors only

Source: Online Banking Report, 5/03

*Not all keywords display Overture paid ads.

LookSmart

Motley Fool

www.fool.com

Motley Fool delves into online banking.

Motley Fool, famous for their irreverent investor’s forums on America Online and now the Web, are offering content in the online banking arena www.fool.com/Media/Bank/BankCenter.htm . The Online Banking Center includes general articles and summaries of the online offerings from the six sponsors listed on the right hand side of the page (see screenshot above).

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Republic National Bank’s section on Motley Fool.

After 12 months of hard work your Web site finally passes muster with the EVPs of Marketing, IS/IT, Legal, and Branch Administration, but can users find out how much a new order of checks cost? Here are some ways to boost your Web site’s usefulness.

For most companies the most important function of a Web site is helping existing customers find answers to product and service questions, reorder products, and build brand loyalty.

You still have some time to get it right. The early adopters using the Web today are accustomed to plodding through confusing user interfaces in search of an elusive kernel of information. Tomorrow’s user looking up an account balance on their WebTV during a commercial on The Tonight Show won’t be so tolerant, which makes 1998 the year to fine-tune your online presence before mistakes start costing real money.

There are three areas of Internet-based customer service that could stand improvement at most financial institutions:

• Facilitating self-service
• Responsiveness (speed/quality)
• Personalization

Self-Service

High-tech companies such as Sun, Microsoft, etc. report millions of dollars of savings each month delivering technical support over the Web. For a financial institution, the savings won’t be as dramatic, but they may have similar effects on the bottom line. Depending on how clever you are in migrating customers to self-service (without alienating your profitable customers in the process), you may be able to get at least some of the more mundane questions solved on the Web instead of your call center (e.g., What is the rate on _____?).

Furthermore, e-mail lends additional flexibility in staffing customer service centers. E-mail queries can be answered during lulls in call volume, or if the call center becomes overloaded, e-mails could be forwarded to back-up staff elsewhere in the company (or at their homes).

Here are some ideas to consider for 1998:

1. Upgrade your online help/FAQs (frequently asked questions). The problem with most online FAQs is that they are not updated frequently enough, nor are they organized in a logical fashion. Part of the problem is that making changes is often a tedious process, taking days, or even weeks to wind their way through the appropriate departments for approval. Why not empower certain customer service leads to log into your Web and make additions/clarifications to your FAQ as needed? Marketing/legal could review changes in “real-time” as part of the posting process, not as a separate step slowing up the process.

2. Build a customized search engine with integrated table of contents. When you look for something in a book you may use the table of contents to find the general area of information, or the index to find citations for specific terms. Your Web should work the same way. The table of contents (or site map) should point users in the general direction of interest (e.g., financial planning for retirement) while your index (search engine) delivers them to the exact right spot (e.g., home equity rates). And make sure you put the search engine through rigorous testing. Many financial institution search engines are laughable. More than once I have found no citations for “online banking” on a bank’s Web that just launched a huge online banking initiative.

3. Develop a full set of interactive customer service forms. Many financial institutions are finding that the biggest cost of a Web presence is customer service. The first line of defense against spiraling customer service costs is helping customers help themselves. But that won’t solve all customer problems. When they do come to your for additional information, use detailed forms with built-in diagnostics that elicit all the pertinent facts right away so that you don’t have to waste time going back for more information. To get an idea of how this works, check out the Member Services area of America Online (screenshot on facing page). Users are taken through a series of yes/no questions to narrow down their problem before requesting assistance.

America Online puts users through a series of diagnostic steps before hitting the free-from
“e-mail us” screen. Keyword <Member Services>.

4. Develop multi-level FAQs that can be browsed or searched. In a multi-level FAQ, only the most common questions are shown for a given subject. Users drill down from the top-level if they want additional information. Check out the QSpace FAQs on credit reports for a good example of how to nest questions, www.qspace.com.

You may also need a search engine that hits only your FAQs. That way someone with a question on balancing a checkbook won’t be taken to the check reorder form. For an example, see the Quicken Support area of Intuit’s Web www.intuit.com.

Intuit’s searchable FAQs begin with the user entering a product name to further refine the search. A similar approach would make sense for financial institutions.

Bank of America’s Contact Area

When you click on Contact from anywhere on BofA’s Web www.bankamerica.com you are delivered to a page that prescreens your questions. For example, the Technical Questions area asks for basic information such as browser type/version, computer platform, service provider, problem description, error messages, etc.

Bank of America does a good job directing users to the proper area to get help. Internally, this is an enormous help to BofA in providing timely responses. We especially like how they provide mini-FAQs before presenting the e-form to ask a question.

BofA’s HomeBanking help area.

When clicking on HomeBanking users get a 24-question FAQ list that answers the most common questions such as “How much does HomeBanking cost? or “Does HomeBanking work with Quicken?” Following the 24-question overview is a simple e-form to request help. www.bankamerica.com/contact/homebanking.html.

Responsiveness

Expectations of a timely response vary with the medium. When you write a letter, a response within a few weeks is deemed adequate. When you send an e-mail, a response is expected within a few hours. Few firms are delivering that kind of turnaround, providing you the opportunity to become known as the Nordstrom of cyberspace (i.e., provider of tremendous service).

5. Offer instant credit approval even if it’s conditional on employment verification, home appraisal, etc. The big consumer lenders will eventually all adopt some type of instant approval/prequalification. If you intend to compete with the aggressive lenders, you’ll need to consider instant online credit approval. Not only does this position you as a highly responsive lender, done right it could be quite profitable as well.

Only three lenders in North America have gone real-time: Beneficial National Bank, Bank of Montreal, and BayShore Trust, so you still have time to position yourself as a pioneer in this area. We know that online credit applications, especially with instant approval, give your underwriting department a major headache. But you don’t have to sacrifice credit quality to give applicants quick feedback on the likelihood of their loan application being funded.

6. Offer real-time customer service via online “chat” mode. Online chat allows users to type questions and receive real-time typed replies. Chat can be public, visible to anyone in the “room,” or private, visible only to the customer and the customer service rep. Private chat has the most applications for financial institutions, though you could experiment with public chat. There are a number of tools available that allow you to moderate, or censor, chat in real-time so that offensive or inappropriate material is squelched. Though you would most likely want a human moderator involved at all times.

Thanks to new “chat servers” available from several vendors such as iChat or eShare, you can experiment with chat services with little up-front investment. These vendors will host private-branded chat on their servers using their software. You provide the artwork, layout, context and moderator. Start with just a few experimental hours each day where you offer “beta testers” a chance to interact with service reps real-time.

Another advantage of chat is that edited transcripts of pertinent conversations could be posted to add some interesting ever-changing content to your Web.

7. Automatically confirm all e-mails submitted. Every e-mail submitted to your bank should get an immediate response confirming receipt and providing an estimate of when the user will receive an answer. This can easily be done entirely with automation.

8. Provide fast e-mail problem resolution. E-mail customer service has been getting a bad name in cyberspace. Many large companies have done a poor job in staffing this area, and response times (if you even get a response) are often measured in days or weeks instead of minutes or hours as expected from serious Internet users. In our experience, we rarely get a response in the same day, and it is not unusual to wait a week or longer. Differentiate yourself by promising 60-minute turn time on most e-mail queries. Even if you can’t solve the problem entirely, you can get back to the customer within an hour to explain what research is being conducted and an estimated time to expect resolution.

Personalization

We recently spent two months covering personalizing and customizing ideas and tactics so we won’t reiterate those here. Keep in mind that customization schemes will flourish next year as Web publishers take advantage of the latest browser features. You would be well-advised to begin at least experimenting in this area.

9. Store online form inputs on your server. Once a user has submitted an online application or info request, the data would be saved on your server for immediate recall for a future application. Users should be given the opportunity to opt out though, since many recoil at the thought of their personal profile being accessible through the Net.

10. Provide personal e-bankers. E-bankers are real people providing sales and service to their own book of Web users. E-bankers should be armed with complete account history, user profiles, historical records of electronic interactions, and preference data for their customers. Using Web-based messaging and e-mail, personal e-bankers could manage a portfolio of 1,000 or more users.