I’ve been a print and direct mail consultant for 30 years and have served the banking industry for near 20 years.
I was on the radio regularly for 25 years and have a degree in communications. My wife Stephanie and I have two daughters and three grandchildren – and are involved in our church.
On weekends during the fall, I’m hopelessly devoted to the Nebraska Cornhuskers and the Chicago Bears. (I grew up near Peoria but have lived in Neb. for almost 40 years.) I’m a Creighton University alumni.
Years of bank marketing experience
During the second half of my fine college career, I was barely getting by working two jobs. I was married and had a baby daughter at home. Each month I balanced my checkbook to the penny to the statement I got in the mail. Yeah that was a long time ago. Pre-Internet by about 15 years. Baby daughter is now married with three kids.
Anyhow, despite my best efforts, I bounced a check. I was sooooo embarrassed. Not only that – the merchant charged me a fee as did the bank and TeleCheck. I’m thinking it was total of $50 in fees but that was a lot for a poor college student. I drove to the TeleCheck office in town and took care of the whole mess with the promise I would never do that again.
Fast forward about seven years and consultant Ralph Haberfeld grabs bank CEOs by the lapels and tells them just because a customer bounces a check from time-to-time, doesn’t mean they’re not a good customers. It’s a lifestyle choice. Cover the check and charge a fee and you’re saving the customer a boatload of money. And give them the option of free checking. Customers will love you and you’ll profit from the overdraft fees.
What’s more, Haberfeld convinces banks they’ll make more profits if they bring in more of those types of accounts. Offer free checking with a free gift. The lowest cost acquisition media was (and probably still is) direct mail. It was revolutionary. Haberfeld banks saw lines of potential new customers overflowing into the parking lot. And for a long time, free checking and overdrafts were the gifts that kept on giving.
Times have changed. Reg-E, Durbin, Dodd-Frank. Lots of banks have dropped free as the non-interest income is no longer there to make free profitable. And with online banking, RDC and mobile; in-branch transactions have declined 25% in just 5 years. It’s harder to connect with customers and NII revenue is down.
What to do? In my opinion banks need to offer a customer-friendly, fair value checking account that’s engaging. Think of combining a checking account with LivingSocial. Then give them a mobile app to access savings on the fly. Customers will pay for it. What’s more, you’ll get buzz from your retail customers about how you saved them money and your small business customers will see how the bank helped. For your customers, it’s direct interaction with the checking account.
Here’s another compelling point. Free still brings them in the door. But not everyone needs a free account. In fact statistics show 45% will opt-in for the account I’ve described at the new accounts desk. I know of a company that enables you to offer this type of account and it’s worth about $75.00 of non OD fee revenue per year. Schedule a webinar – and I’ll get you connected. It’s a cool offering. I’m happy to help.
My Favorite FI Bloggers:
Ron Shevlin’s Snaketing2.0 – One of the best blogs out there – no matter the industry. Ron focuses on marketing – but not always. http://snarketing2dot0.com/
Jeff Marsico. I look to Jeff for good info on operations. Fellow Notre Dame fan. http://www.jeff-for-banks.blogspot.com/
Brett Kings’ Banking 4 Tomorrow. One of the top banking experts in the world. http://www.banking4tomorrow.com/blog
The Financial Brand. Marketing insights for banks and credit unions. Actually TFB is an online publication with a blog. Very well done. http://thefinancialbrand.com/
JimMarous – Marketing services leader focused on building strategic solutions for the financial services industry. Highly rated industry speaker. http://jimmarous.blogspot.com/
Favorite FI Micro Bloggers:
David Gerbino with Sterling National Bank. All sorts of good info including space travel https://twitter.com/dmgerbino
Bryan Claggett – one of the honchos at Geezeo. Lot of fun tweets and pictures of cars. https://twitter.com/Clagett
Jim Perry – Senior Strategist at Market Insights. Great way to keep track of mergers. https://twitter.com/mi_jim
Mark Zmarzly is a SVP with Deluxe Marketing/ACTON. He publishes the “Best of Bank Marketing” pretty much daily. Another great way to keep up. https://twitter.com/BankMarketing