An unpublished study being completed by Market Platform Dynamics says there’s little data to support assertions that mobile payments will become the payment vehicle of choice for the people under the age of 40 called Gen X and Gen Y. According to the company’s multi-year research, 62 percent of respondents said they think using cell phones as payment vehicles is unnecessary, and 38 percent said they don’t use their cell phones enough to make it worthwhile. The good news: People born since 1977—Gen Y’ers—like the idea better than their Gen X elders. Last week, founder Market Platform founder David S. Evans spoke with NetBanker about his findings, and their implications.

NB: Tell us about the difference in attitude between the 16-to-19-year olds and older people.

Evans: The very young people indicated they’re more interested in using their mobile phones as a payment device, and the very old people—real geezers in their late-30s to early-40s—are less enthusiastic. Everyone else is about the same [as the geezers]. But still, even 50 percent of the real kids say ‘not really interested.’

NB: Most of the enthusiasm for mobile payments is based on the idea that these children are going to be flocking to use their cell phones like they do in Asia, and that therefore, mobile payments is not only the wave of the future, but also the demise of the credit card and the credit card brand as we know it.

Evans: Let’s be careful about a couple of things there. First of all, and despite the survey results, I’m still bullish on mobile phones eventually becoming payment devices. The thing you need to keep in mind is that people can’t really imagine what it is like to use one of these things until you actually present them with the goods. So, despite these numbers, I’m still bullish on mobile phones.

Number two, you say ‘Displace the credit card industry.’ There are two issues: One, whether the mobile phone is going to become the new form factor—just a physical thing that people use instead of a magnetic stripe card. The other question is whether the possibility of the mobile phone carriers being in the loop has an implication for the card system.

Those are two different questions. For the second question: What is currently happening in the U.S. is that the mobile carriers are not expressing, at the moment, great enthusiasm to be card systems. But having said that, it’s ultimately the mobile operator that has the relationship with the customer, so the mobile operators are being injected into the payment eco-system, and it’s possible that that could have some implications for the card associations. But it’s pretty complex.

NB: It seems to me that the real impetus here is going to be the first question—will the form factor impel the cell phone operators into the loop.

Evans: That’s correct: If consumers are interested in using their mobile phones as payment devices, then you can be sure that ultimately, the mobile phone operators are going to want to figure out some way to get a piece of that action.

NB: Based on your research so far, what are those indications?

Evans: Based on what’s happening in Asia, and looking at the U.S., our sense is that in the long run, and despite the lack of enthusiasm that we get in the survey, the mobile phone has many advantages as a form factor, because of the possibility of its being a contactless device with a graphical user interface—able to do lots of different stuff and being ubiquitous as well. So it’s a natural thing for them to become an important—if not the—form factor for paying for things.

NB: So I take it that your ultimate conclusion here is that this will happen, but it will take longer than some enthusiasts may be suggesting.

Evans: That’s correct, and I think the survey results indicate that people aren’t going to flock to this thing just because it’s new, and whoever is trying to push this form factor on consumers, or on merchants, is going to have to present a solid value proposition to the consumers. Consumers will have to be able to do something with this device that they can’t do with their current, easy-to-use magnetic stripe card. It underscores the fact that the introduction of a new technology in the payment card space is always an uphill battle.

NB: So first of all, the way to accelerate adoption will be to offer something the cards don’t do, aside from being able to use your cell phone as a gizmo; and number two, the people who want to push adoption will have to be willing to buy market share by accepting lower margins today.

Evans: I don’t necessarily agree with that. If you can come up with a clever, valuable thing on the mobile phone that is of interest to consumers, consumers will be interested in it. And that can happen without necessarily taking a hit on margins.

NB: Would that include rewards programs?

Evans: It may turn out that mobile phones make it easier for card issuers and merchant participants to have rewards programs, because you have a graphical interface on the phones. That implies that you can basically beam rewards to people. There are more clever things you can do with a computer than you can do on a mag stripe card, or even a contactless chip card. So that’s one of the value propositions that one can start thinking about with mobile phones: Are there ways to turn the mobile phone into something that’s valuable to both consumers and merchants?

NB: And what do you think?

Evans: Once you start moving towards a smart computing device with a screen, there is an enormous amount of things, including rewards, that people in this business can start thinking about—things we can’t even imagine. The mobile phone is most interesting because it truly is a computer. And in other parts of the information technology world, we’ve seen that once you start talking about software platforms for computers, developers come up with all sorts of ideas about how to use that computing power. That’s the true excitement of the mobile phone.

NB: So the payments mechanism will just be included in the phone, and over time, people will use it more.

Evans: We have to be careful about one thing, though: When you think about people using mobile phones, we’re talking about contactless, and therefore the adoption of mobile phones as a payment device is tied to the adoption of contactless at the point of sale by merchants.

NB: Which is the chicken-and-egg issue.

Evans: It’s a chicken-and-egg issue. There are all these contactless cards out there now, but there aren’t a lot of merchants that accept them. But if consumers wind up really liking the idea of contactless mobile phones as a payment device, and people start getting those sorts of phones, it could propel adoption of contactless. Having said that, if I gave you a mobile phone with a contactless chip today that was an incredibly powerful payment device, you could use it at your local McDonald’s to buy a Big Mac, but not much else.

NB: Everything you’ve said is contingent on a screen. What does your research tell you about what people say will be the generation after cell phones—a chip embedded in a wristwatch or token?

Evans: I don’t think that’s after mobile phones—I think it’s pre-mobile phones. One of the things that came out of our research is that our respondents exhibited utter lack of enthusiasm for fob-like devices.

NB: Yet most people have predicted that that is the next generation after this, and that’s what’s going to atomize the brand value.

Evans: The Gen Y people indicated slightly more interest in fobs than Gen X, but no one expresses a lot of interest in fobs.

NB: I infer from that that some of the anxieties that I’ve heard about the next generation of payment devices atomizing brand value is, at a minimum, overdone.

Evans: Yes. I don’t think there’s any reason to think that mobile phones are going to atomize the brand. I think that the major implication is that in the long run—five to ten years—mobile phone carriers are potentially important players in the eco-system, and whether they  become allies of the card systems, or whether they think about becoming alternatives, or allying with someone else, remains to be seen. But it’s certainly not going to atomize the industry—it’s just going to inject another set of interested parties into the business.

NB: What’s happened in Japan [where DoCoMo already operates a thriving mobile payments system] could be done in this country just as easily. Do you think that could be the disruptive element that could marginalize cards?

Evans: It’s possible, but there are very important differences between Japan and the U.S. Japan has a poorly developed card industry and not a lot of interest in the use of credit cards. It has enormous interest in the use of mobile phones. DoCoMo got established in Japan mainly because people don’t have personal computers, and there is an extensive broadband penetration, so Japanese consumers standardize all their Internet activities on mobile phones. And you have companies that are able to push the mobile phone manufacturers around and tell them what to do. When you come to the U.S., you have totally different sorts of operators and a very, very well-developed card industry, with plenty of muscle behind it. So I think the [U.S.] mobile operators are an interesting set of entities that, as the mobile phone becomes a more important payment device and gets injected into the [U.S.] payments eco-system, could alter that eco-system. It could possibly take on a more significant role. But I think that’s a long time coming, and certainly not imminent. It remains to be seen whether that is even a plausible outcome in the U.S.

(Contact: Market Platform Dynamics, David Evans, 617-266-6839)

The potential of cellphone-based mobile payments to eventually squeeze banks out of their central role in payments can already be seen in East Asia, says Andrei Hagiu, a principal at Market Platform Dynamics, and by ignoring it, American banks have nothing to lose but their business.

Hong Kong’s Octopus prepaid debit card (see inset) is one example: Issued by Hong Kong’s subway system and several other transportation companies—with no bank involved—Octopus cards drive about $2.2 billion in annual payments volume.

Continue reading "Mobile Payments: Japan Leads the Pack" »

During the past 12 months, investors’ blind enthusiasm for anything Net-banking has reversed. It’s been lumped with e-tailing as a losing sector. We couldn’t disagree more¹. Net banking is not a digital catalogue like eToys or CDNow. It’s not reliant on advertising revenues like DrKoop.com or TheGlobe.com. It’s more an infrastructure product, supporting payments, purchasing, and security.

NetBank’s stock, the bellweather of the Net banking sector, has been in a free fall, despite little fundamental change in the company (although intererest rates have been on the upswing.)

In high-tech parlance, online banking is an “enabling technology.” In other words, a service that runs in the background, greasing the wheels of ecommerce. A weakness with many first generation bank Web sites is that they’ve been built as destinations. Banks hoped to lure customers using account data as bait, then assumed users would become so enchanted with this “convenience” they would magically reappear time and time again.

The problem with the bank-as-a-destination model is that it overlooks an important element of consumer behavior, NO ONE WANTS TO VISIT A BANK WEB SITE. People want to accomplish tasks, make or save money, communicate, learn, or be enter-tained. Net banking is only convenient if it helps get those things done better/faster/cheaper. Or, as cyber-pundit Esther Dyson put it, “(banking) is sort of like vacuuming. (it’s vital) but people try to reduce their vacuuming time. They don’t try to make it fancy or more enriching. Like electronic banking, you really want it to vanish.”

Making payments by email is something most of your online customers will use now and again. If they have to go to another company, especially an aggressive VC-backed startup such as X.com, you risk losing transaction business. To fight back, follow these steps:

1. Hook up with a vendor to “email payments enable” your checking accounts.

2. Make it free (for now).

3. Develop checking account alerts so users can better track epayment activity.

4. Get your customers using your program so that it spreads virally across your market(s).

EXTRA CREDIT: Develop a metapayments
engine that allows users to use and track any
online payment system directly from the
password-protected safety of your bank.

Source: Online Banking Report, 11/98

Ever wonder why you can never get a straight answer to how big the small business market is? It’s because there are so many ways to slice and dice it. We like the SBA’s estimate of 13 million to 16 million. This includes both employer firms and the full-time self-employed. Table 1 provides some other choices for the top line of your spreadsheet.

What’s this business worth for your bank? That depends on how you price and market small business services. Last year, McKinsey/BAI concluded that the small business market was worth $78 billion (OBR 9/97) across 5.6 million employer businesses, or $14,000/yr for each business. But as we pointed out last month (OBR 9/98), this figure doesn’t include the internal and external costs for accounting, financial management, and billing that can now be outsourced to Web-based service providers. We expect both financial and non-financial companies to compete for this growing market.

Nearly all U.S. commercial banks serve the small business market. Yet, relatively few banks are using the Internet to build share. A search for “small business” plus “bank” on Yahoo! only turned up eight banks worldwide. Surprising, considering the number of small businesses using the Net for research and commerce. In fact, Ziff-Davis recently found that more than 40% of small businesses (<100 employees) are using the Internet. Furthermore, the Software Publishers Association reported that 23% of PC households claim to be operating a small business of some type from their home.

* Searching on “small business” + bank resulted in 8 unique banks, 1 in Australia and 7 in the United States.

Source: Mainspring, 6/98, www.mainspring.com

*Pricing generally includes a limited number of bill payments with extra payments available for $0.21 to $0.50 per payment.

Source: Ernst & Young, 10/98; Online Banking Report, 10/98

*Online Banking Report estimate plus or minus 33%; includes consumer or business online banking programs that includ access (Web or direct-dial) to business checking accounts.

Source: SBA, 1997

*Micro-business friendly banks, according to the U.S. Small Business Administration (SBA), have significant business lending activity in loan amounts less than $100,000.

**The 449 MBF banks make up 3.4% of total bank assets, but 13.2% ($14.8 billion) of the dollar value of micro business loans outstanding.

***Banks reporting small business lending data in June 1997 call reports.

Source: SBA, 1997

Credit Usage

Not surprising, more than three-quarters of all small businesses report usage of some type of credit. With more than 40% of small businesses now using the Internet (Table 1), the Web will increasingly become an important venue for selling and servicing business finance products.

Source: Federal Reserve Board, National Survey of Small Business Finances, 1995; data compiled during 1994 and 1995 for fiscal year 1993

* Suppliers not shown include family members, unrelated individuals, other businesses, and government (see table 8a and 8b below)

Source: Federal Reserve Board, 1995 (using 1993 data, see above)

Source: Federal Reserve Board, 1995 (using 1993 data, see above)

Source: Federal Reserve Board, National Survey of Small Business Finances, 1995; data compiled during 1994 and 1995 for fiscal year 1993

If you are looking to sub-segment the small business market, you may want to consider characteristics of the business itself, such as age, size, growth rate, industry, and so on. Another approach is to segment by characteristics of the business owner. For a wealth of data to support either approach, look at the SBA report Characteristics of Employees and Owners, 1997, available online at www.sbaonline.sba.gov/ADVO/stats/ch_emp_o.html

CAGR = compounded annual growth rate

*In 1995, 5.35 businesses with less then 500 employees employed a total of 52.7 million people; the 15,000 businesses with more than 500 employees employed a total of 47.6 million.

Source: Bureau of the Census

Source: SBA from Bureau of Census Data

Source: Bureau of Labor Statistics

*Does not include approximately 1 million reporting self-employment as second job; unknown how many reporting self-employment are also included in the employer counts in Table 10.

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source: Bureau of Labor Statistics

Source: IRS, 1998 P= Projected

*Overstates number of business entities due to multiple tax returns being filed by some businesses.

Source: U.S. Department of Labor

*State-by-state count of new business registrations. Includes approximately 200,000 businesses already operating in another state at the time of registration in the new state.

Sources: U.S. Department of Labor (terminations); Administrative Office of the U.S. Courts (bankruptcies)

* State-by-state count of all business closing, overstated by an estimated 200,000 businesses who close in one state but remain in business in another.

** Bankruptcies included in termination total

Note: In another study of closures between 1992 and 1996, the Bureau of the Census found that 57% of firms with employees and 36% of firms without employees were successful at the time of their closure.

Source: SBA from Dun and Bradstreet database which includes mostly employer firms

Source: Bureau of the Census

Note: 57% of firms with employees and 36% of firms without employees were successful at the time of their closure.

Source: SBA from Census Bureau data

Note: Excludes non-S corps (mostly large companies)

Source: IDC/Link, 1995

Source: Online Banking Report, 10/98

*estimated plus or minus 25%

Web ad measurement service, NetRatings www.netratings.com reported a precipitous decline in click-through rates this summer (click-through is the percentage of viewers of an ad banner that click on it). Part of the 60% decline is the summer slow-down in commerce, but it’s also a likely indicator that Web users are tuning out banner ads.

Last month we explored the financial services competition you may soon face from unregulated Web-based start-ups. That was interesting, but not so pertinent for the pressing issues facing you next year. So, for those in the real world of budget cuts, personnel shortages, unrealistic revenue goals, and brutal office politics, we offer relatively more down-to-earth advice in this, our fourth annual look at the year ahead.

Looking back to our recommendations of a year ago, we still believe most will work in 1999. But you’ll need to be even more creative if
you hope to maintain or grow market share with online consumers, now numbering over 79 million in North America according to the latest Nielsen/ CommerceNet study (fielded 6/98). For 1999, we developed a Strategy
Matrix with a laundry list of online product and marketing tactics to support your bank’s strategies. We also included a list of “Quick Hits” that could be implemented by year-end to boost Web traffic.

To run the numbers for 1999, you’ll need the latest market projections. So, we’ve updated our forecasts first presented in January (OBR 1/98). Delays in bringing bill presentment to market have hurt consumer adoption, but that is being offset by the surge in activity in the real estate and mortgage fronts.

Finally, we don’t envy those of you trying to make a business case for aggressive online initiatives amongst the Y2K hysteria and e-commerce mania. Our advice: show how your Web and online banking programs support overall bank strategies, such as increasing loans or decreasing customer attrition.

Marketing on the Web used to be a low-cost proposition. Build a Web, register it with the search engines, exchange a few links, and you were in business. Those days are long gone. Launching a Web brand today is little different than launching a new brand in the off-line world. To succeed you need talent, money, and luck, but not necessarily in that order. Search engine banner ads are probably the most effective way to generate traffic, but with companies like GetSmart and First USA bidding up the price of financial keywords, search engine advertising may not be cost effective. Luckily, there are always alternatives to the conventional approaches.

Guerrilla Online Marketing Tactic #1

Buy Dormant Web Sites*

1. Use personal finance terms to search for defunct, dormant, or underutilized personal finance and/or banking sites, preferably ones within the first few pages of search engine results.

2. Visit the Web sites and find out who owns them.

3. Contact the owners.

4. Negotiate an outright buyout or exclusive long-term traffic-sharing arrangement. The arrangement should be flexible depending on the needs of the individual Web owner. For example, create a new home page that directs most of the traffic your way, but still sends appropriate visitors to the other Web site.

*This technique recently made headlines as fish processor Zapata bought or invested in 21 Web properties with total traffic of nearly 1 million visitors per month.

Guerrilla Online Marketing Tactic #2

Bill Pay Associates Program

One of Amazon.com’s brilliant grassroots marketing ideas is the Associates Program. Associates essentially co-market books on behalf of Amazon.com, picking up a small percentage of sales originating from their site. There are nearly 60,000 associates registered with Amazon.com including major players such as Yahoo and Quicken.com.

We plan to follow a similar path, introducing a bill pay associates program. For each bill pay/credit line user referred by an associate, we will pay $1 per month forever, as long as the account remains active (pays a bill or revolves credit).

Associates will place our catchy “Pay Your Bills Now” logo on their site, and we’ll track usage, paying associates on a monthly basis.

Guerrilla Online Marketing Tactic #3

Flood the Market with Press Releases

Sure, the world doesn’t need any more press releases, but until they stop working we strongly recommend an aggressive preplanned series of press releases touting your online initiatives. Why? Press releases are served up and read by potential end-users subscribing to many of the major news areas such as NewsPage, NewsBot, and many others. They cost as little as $75 each to distribute through the two major U.S. wire services, PR Newswire and BusinessWire. Any actual media interest generated is a bonus.

Hints for maximizing exposure through press releases:

•  Run multiple smaller press releases, rather than a single huge one at launch. Why? Sometimes, the news sites will put your release in the wrong category, e.g., electronic commerce when you hoped for home banking. Multiple releases improve your odds that at least one ends up in the right place.
•  Space the small releases one to two weeks apart. Why? Many online news outlets such as Yahoo and NewsPage only archive a week’s worth of news. Your prospects can easily miss your release unless they log into the news server every week.
•  Use catchy keywords. You want users to find your release when doing news searches. Make sure you have as many of these keywords in the release: online banking, home banking, Internet banking, bill payment, your town, your state, PC, personal computer, bank, Microsoft, Quicken, and any other appropriate term your target market might be searching on.
•  Use a hook in the title and first 25 words. Many news sites index articles by title and the first few words. Make sure your press release grabs the attention and interest of your target market in the first few lines.

Guerrilla Online Marketing Tactic #4

Private-Branded Bill Pay Centers

Using a similar model as the associates program, we’ll try to build Bill Pay Centers on Web portals and other well traveled sites, especially those dealing with news and personal finance. If the top-tier sites are locked up by MSFDC and others, or require significant up-front fees, we’ll move downstream to lesser known and regional sites.

Bill Pay Centers will provide much the same functionality as our flagship site, but will be private- or co-branded for the sponsoring site. Sponsors will share in revenues based on traffic, outstanding loan balances of their referrals, and other factors.

Guerrilla Online Marketing Tactic #5

Bill Presentment Keyword Buys

If we have the funding, we’ll try to negotiate with the search engines for long-term sponsorships of certain billing keywords that are little used today, but could become hot when the Internet billing hype begins to grow in 1999. Here are some keywords to look at:

•  bill(s)
•  bill pay
•  bill presentment
•  Internet billing
•  pay bills
•  MSFDC
•  Checkfree

Guerrilla Online Marketing Tactic #6

Multiple Domain Names

For $70 each, you may as well register every domain name related to your company and service offering that you can think of. Of course, people have been doing exactly that for the past 12 months, so most of the obvious ones are taken.

But if there is one you really want, don’t hesitate to contact the owner and make an offer. How many offers do you suppose Bill McCauley has received since he registered bill.com in Nov. 1994? If you would like to make him an offer he can’t refuse, he’s at (650) 596-1700.

Guerrilla Online Marketing Tactic #7

Send-a-Buck Campaign

Registered bill pay users, especially new ones, will be encouraged to send a buck to their friends and associates. We’ll gladly pick up the $1 expense since it will buy us up to five impressions with each recipient. Following is how it works. You might want to sweeten the pot for the senders, automatically entering them into a drawing for $10,000 each time one of their bucks is cashed.

1. Registered users can send a buck to anyone in the U.S. through a special screen in your bill pay area.

2. With each buck, recipients will receive an email from the sender that includes a personal message, if desired, and our brief sales pitch. This is how Hotmail and others built their free email user bases. (Note: You’ll need a clear privacy guarantee to assure both senders and recipients that their personal info will remain confidential.)

3. The envelope containing the buck will include our name, Web address, and 3 x 8-inch flyer explaining the program. (We’ll do the stuffing in in-house if our bill pay service provider cannot accommodate inserts.)

4. Ten days later, each recipient will receive another email asking whether they got their dollar and inviting them to our site to send their friends a buck. The catch is they must become registered bill pay/credit line customers to send out bucks (they don’t have to register to receive a dollar).

5. Finally, when the check clears we’ll send a thank-you email which will contain another brief sales pitch. We’ll also ask for permission to send future offers.

Guerrilla Online Marketing Tactic #8

Biller Database & Notification Service

As a public service, and killer marketing technique, create an area on your Web where users can search by biller name, location, and/or industry to see if a company supports Internet billing (aka bill presentment), preauthorized debit, and/or automatic credit card payments.

Also, we’ll allow users to sign up for notification when specific biller(s) comes online.

How many times have you seen the “three-legged stool” sketched on a whiteboard? The subject matter differs, but the point is always the same. No matter how sturdy you build the first two the thing doesn’t work without three legs. Applied to online lending, the three legs are:

1. product

2. online sign-up form (i.e. application)

3. proactive marketing

There are far too many two-legged stools on the Web today. The missing leg? Marketing. Without proactive marketing to drive a good cross-section of borrowers to your online loan center, you are destined to spend most of your precious resources processing loan applications for the credit-impaired, kooks, and con artists. (This isn’t unique to cyberspace. Lay a pile of loan applications on the sidewalk in front of your branch and you’ll get a similar response.)

Online loan marketing has picked up considerably since October when the term “refinance” went begging for a sponsor on four of the five major search engines. In our latest test, “refinance” was sponsored by mortgage companies at every search engine we checked (see below).

Source: Online Banking Report, 4/2398 to 4/30/98

*Served to our browser searching from a Seattle POP. Banner ads displayed can vary by geographic location and sometimes by what ads you’ve already seen. We tested for multiple sponsors by hitting reload 10 times per search term.

Banner ads on search engines are just one of the more obvious and expensive ways to drive new loan business. Below are ten techniques for increasing loan volume from existing customers. To increase volume from outside your current customer base, consult the table on the following page.

How to Increase Refi Cross Sales to Current Bank Customers*

1. Make sure your customers find you when searching online. Page descriptions and meta tags should include the words: mortgage, refi, refinance, banking and/or bank (even if you are not one), your state, your city, and interest rates. Also consider purchasing a refi ad banner whenever your company name is used as a search term.

2. Leverage the paper statement (front, back, inserts) with your Web address and a list of services offered online. Wells Fargo includes this clever tagline, “With Online Banking you would already know what’s inside,” on the top portion of its checking account envelopes.

3. Plaster that Web address everywhere (print, radio, branch, outdoor, events, biz cards, VRU).

4. Assist local media in writing stories about how easy it is to track rates and make refi decisions using online tools and email.

5. Offer unique online features to attract attention in the press and with prospects.

6. Offer simple and advanced versions of refi calculators preloaded with current rates.

7. Offer email rate update services (see p. 6 and
E-Loan.

8. Provide multiple paths from other parts of your Web site into the refi area.

9. Offer preapproved mortgage refinances to qualified customers.

10. Offer lifetime mortgages that can be refinanced or rolled into a new home with no new “paperwork” (users would just update a few fields at your Web site).

*without focusing on price

Attracting Refi Business from
Outside Your Existing Customer Base

1. Maximize your free exposure on search engines (see number 1 in previous table).

2. Offer an “email this deal to a friend” so users can easily alert others to the great deals at your Web.

3. Create a local physical presence through Realtors, mortgage brokers, attorneys, and escrow companies located in your target market(s).

4. Buy banner space at search engines and rate comparison sites such as BankRate.com.

5. Purchase leads from Web-based lead generators such as GetSmart.com and Quicken.com.

6. Create a presence at Web sites frequented by homeowners in your target market(s); look beyond the banner and consider exclusive sponsorships and joint ventures such as E-Loan’s new arrangement with Yahoo!.

7. Create an online sweepstakes geared towards homeowners (see Intuit p. 16).

8. Post value-added content of interest to consumers thinking about refinance such as BankAmerica’s HomeWorth Search www.bankamerica.com/p-finance/athome/hmworth_ov.html free refi credit analysis complete with copies of credit reports; Relocation Wizards such as FinanCenter www.financenter.com Realtor links; home listings, and so on.

9. Try different headlines to entice Web users into the mortgage area. For example, “Trade-In Your Current Mortgage” may sound less onerous and/or more interesting than simply “refinance now.”

Driving new eyeballs to your Web is the first step in building out the final leg of your three-legged mortgage stool. Once a prospect lands in your refi Web, you have four goals to accomplish in the first 120 seconds:

1. Download the refi page quickly (15-20 seconds).

2. Reassure users they’ve come to the right place. For example, “Your spot for the fastest mortgage refinances in the northwest.” (5-10 seconds)

3. Entice users to begin interacting with your Web site. For example, “Click here to see if you can start saving money on your mortgage payment NOW.” (30-45 seconds)

4. Offer something interesting for free that requires users to enter their names and email addresses. For example, “Sign-up for our free rate update service and automatically save $100 on your refinance.” (45-60 seconds)

After these four goals have been achieved, begin a more thorough selling effort such as outlined below.

Ten Steps to Improving the Closing Percentage on Web Visitors

1. Make the intangible tangible with content and features that address refi prospects’ ten biggest fears (see p 7).

2. Tightly integrate a refi and payment calculator into the content. Pre-load current intere