It's been awhile since we've had an installment of What NOT to Do! (note to self: think of a catchier title). There have been a number of candidates in recent weeks, but the winners are HSBC, M&T, and TCF, which have elected to get out of the federal student-loan business (FFEL) (see notes 1, 2).   

Although overshadowed by the Bear Stearns debacle and other unpleasant economic news, these three banks managed to make the first page of Thursday's Personal Journal section in The Wall Street Journal (here) as well as a number of regional news sites (here and here).

It's a difficult time for financial companies (except Visa of course), so I understand how it would be appealing to exit this relatively low-profit market until the credit markets calm down. However, what's a sound short-term financial decision could be a public relations and brand image disaster.

If there's one thing most Americans believe in, it's the importance of education. Sen. Kennedy's recent statement from the Senate floor provides a sample of how the general public views student loan support or lack thereof (the full text of the March 8 address is here):

Americans are anxious about their economic futures. They’re seeing volatile markets, disappearing jobs, home foreclosures, rising debt, and declining benefits. Now the crisis in the credit markets stemming from irresponsible lending practices in the mortgage industry may impact their ability to secure student loans at fair rates so their children can go to the college of their choice.  

With consumer confidence down, investors losing faith in the financial markets, and Congress pointing fingers at mortgage lending practices, this is not the time to exit a business that's associated with all things good about our country. It's like saying you're temporarily eliminating charitable contributions until the economy picks up. 

If there is something fundamentally unprofitable with student lending, by all means pull back, raise prices, redeploy resources, lobby Congress, whatever you have to do to save the bottom line. But unless you are in dire financial straits, don't risk your brand's reputation by turning your back on a market segment that needs your support now more than ever. 

What to do
This is a perfect opportunity for banks and credit unions to distance themselves from the big banks pulling out of student lending: 

• Develop a multi-media campaign, "we're on your side" that reaffirms your support of higher education through all that you do: scholarships, internships, donations, and a variety of loan options.
• Contact the local press and reiterate the above points and make executives available to speak to the strategic importance students and student loans are to your company.
• Release a microsite that serves as resource for students weighing financing options.

Notes:

1. We have less of an issue with the smaller lenders that have exited the FFEL program including: Boeing Employees Credit Union, First Niagra Bank, Spokane Teachers Federal Credit Union, and Kansas State Bank of Manhattan (see the full list of dropouts at FinAid.org here). Smaller financial institutions, with less of a brand name to protect and fewer resources, may have to make the hard decision to exit an unprofitable product line. 

2. The graphic image is for effect. We do not expect HSBC to close their online Student Center, although it will need a major redo, and quickly.

At 8:30 AM today, we heard an unusual advertisement on classic rock radio for the Bank of America Alaska Airlines affinity card.

It wasn't the ad itself that was so spectacular, although it's not every day that you hear credit cards being pitched on radio. And it wasn't the offer that made the ad stand out, although 20,000 bonus miles is a pretty good perk.

What made it memorable was the call to action, "visit myalaskacard.com." They didn't even bother to throw an 800 number into the spot.

It's hard to say whether a radio spot will prove cost effective, but using a memorable URL should help. It's far easier to remember than a telephone number, and prospective applicants can be immediately greeted with an effective sales pitch reinforcing the product benefits and bonus offer.

Analysis
However, once again BofA stumbles with its search engine support (see previous article). Searching on Google for "my Alaska card" brings up a single ad for a Web-based portal site, CreditStep.com (click on inset for closeup).

In fact, we tested every variation of "my" + "alaska" + "airlines" + "credit" + "card" and BofA was nowhere to be seen UNLESS we dropped "my" from the search query. Interestingly, Chase was an aggressive advertiser on several of the search terms offering a competing airline card with 15,000 bonus miles. BofA showed up as an advertiser only when we dropped the "my" from the search query.

The lack of advertising against "my alaska card" is especially damaging because the first few organic search results do not link to BofA or Alaska Airlines. Also, if you type a similar URL, such as www.alaskacard.com or www.alaskaairlinescard.com you either end up at a generic link site or an error page. At this point, potential prospects will either apply at the wrong place or give up on the search. 

If you correctly input the exact URL, you end up at the following landing page. It's OK, but should reinforce the impressive benefits of applying now, a free ticket right away and a $50 companion ticket every year on renewal (see screenshot below).

Action Items
Here's what you should do to ensure better search-engine support for your offline advertising:

1. Advertise at search engines on likely search terms that would be used by consumers responding to your advertising
2. Create a memorable URL that is not easily mistyped
3. Register or purchase domains similar to the advertised URL (including common misspellings), or pay the owner to refer traffic to your landing page
4. Design a landing page that boldly supports the benefits in your advertising and includes a prominent "Apply" button