Economies in an early stage of development are characterised by small scale production processes and relatively local markets in which relationship development between producer and consumer is relatively easy to achieve. Buyers are able to learn through personal experience of the abilities, consistency and reliability of a supplier, while suppliers are able to adapt simple production methods to the needs of individual customers who are known personally. Through personal knowledge and trust, a supplier is likely to be able to judge the credit worthiness of each customer. With the development of mass production methods, producers are able to achieve economies of scale in production and, through price advantage, to encroach on the traditional markets of smaller, less efficient producers. Relationship building based on personal knowledge becomes more difficult. Branding emerged as a means of providing reassurance of consistent quality to spatially dispersed customers who, because of the use of intermediaries, had no direct relationship with the manufacturers of their products. More recently, it has been suggested that in mature markets, consumers increasingly evaluate products on the basis of the quality of relationship with the supplier. It is no longer sufficient to offer better merchandise, or even better levels of service.
When markets become saturated, better quality of relationships can give competitive advantage (for example, the marketing of cars in the more developed economies has moved from an emphasis on better design characteristics and brand image, to better service facilities, and subsequently to superior relationships which provide complete finance, maintenance and replacement facilities. In developing economies with less mature markets, the emphasis remains on better physical design and brand image).In relationship marketing the customer interface is broader, and the Bank should have opportunities to provide its customers with added value of various types like technological, information, knowledge, social, etc. Hence, the second quality dimension, how the interaction process is perceived, grows in importance. When several Banks can provide a similar technical quality, managing the interaction processes becomes imperative also from a quality perception perspective. Thus, in relationship marketing the functional quality dimension grows in importance and often becomes the dominating one. Of course, this does not mean that the technical quality can be neglected, but it is no longer the only quality dimension to be considered as one of strategic importance.
A normal way is to monitor customer satisfaction and success is to look at market share and to undertake ad hoc customer satisfaction surveys. A stable or rising share of the market is considered a measure of success and, thus, indirectly, of customer satisfaction. When the customer base remains stable, market share is a good measurement of satisfaction. However, very often one does not know whether it in fact is stable, or whether the Bank is losing a fair share of its customers, who are replaced by new customers by means of aggressive marketing and sales. In such situations following market share statistics only may easily give a false impression of success, when in fact the number of unsatisfied customers and ex-customers is growing and the image of the bank is deteriorating. For a financial institution, which typically would apply a transaction marketing strategy, there are no ways of continuously measuring market success other than monitoring market share. A service firm like banks, who more easily could pursue a relationship marketing strategy, have at least some kind of interactions with almost every single customer, even if they serve mass markets. Thus, customer satisfaction can be monitored directly.
A Bank that applies a relationship-type strategy can monitor customer satisfaction by directly managing its customer base. Managing the customer base means that the bank has at least some kind of direct knowledge of how satisfied its customers are. Instead of thinking in anonymous numbers, or market share, management thinks in terms of people with personal reactions and opinions. This requires a means of gathering the various types of data about customer feedback that are constantly, every day, obtained by a large number of employees in large numbers of customer contacts. In combination with market share statistics, such an intelligence system focusing on customer satisfaction and customer needs and desires forms a valuable source of information for decision making. Consequently, in a relationship marketing situation the bank can build up an on-line, real-time information system. This system will provide management with a continuously updated database of its customers and continuous information about the degree of satisfaction and dissatisfaction among customers. This can serve as a powerful management instrument. In a transaction marketing situation it is impossible, or at least very difficult and expensive, to build up such a database.
The Internet, a text-based system that links computers around the world, was originally funded by the united States government as a way to ensure that a fail-safe network of super-computers would link defense and research sites around the country. The word Internet is used to describe a massive worldwide network of computers. The World Wide Web is officially described as “a wide area hypermedia information retrieval initiative aimed at giving universal access to a large universe of documents”. The Web is the system most often used to gather information on the Internet and is not the same thing as the Internet itself: the Web refers to a body of information, while the Internet refers to the cables and the computers.
Few business people understand the Web and the interactive marketing it makes possible-they just know that it’s hot and they want to get involved.
In banking circles, the real excitement is “virtual banking in cyberspace”. That’s a plan that will take more time to fully realize, due to security and fraud prevention concerns that need to be addressed before transactions an be safely conducted via the Web. But many bankers believe at the very least, they need to establish a marketing presence on the Web.
If the Web, virtual banking and cyberspace sound too much like a “Star Trek” episode to mean much to you today, consider this angle:
A businessman breaks from a meeting, realizing the next day is his mother’s birthday. He fires up his laptop, dials a wireless connection over the Internet to his virtual shopping mall page, and scrolls to PC-Flowers. He orders his mother’s favorite flowers, then hot-links to the wine section, where the auto-chaumelieur is running a special promotional project on wines, provided by the vineyard customer of a bank. The vineyard offers delivery service for special occasions from local wine shops. Working with a courier, he picks a wine, confirms a secure credit card transaction, and heads back to his meeting.
Is that banking ?
I believe that the financial services business is facing a fundamental upheaval in both structure and delivery, and ourselves as the bankers need to know what to do about these changes, or I believe there is a significant chance we shall see our business erode. The good news is that all this change presents a tremendous opportunity to every one of us in this room. But to seize this opportunity, we’ve got to understand at a minimum three meanings. First, that technology will continue to change the delivery dynamics of financial services. Second, that technology has tremendous potential to cause banks to be disintermediated out of the crucial role they play, unless they understand how to use it to be competitive in this new world. And last but not least, that banks have a role in the future of money if we take action now.
These computer-age customers are not walking through our doors, waiting patiently in a teller line for service. They’re zipping through cyber-doors, wanting on-line access to financial services and payment vehicles, and wanting it today. They want to bank on demand, with services customized to their individual needs. They don’t want to drive around to find an ATM to get cash. They want access to their accounts and to pay their bills at home, at work, on vacation – wherever they are right now. They look at a computer, and they see the closest branch of their bank.
On the other hand advertising on the Web requires that you create a Web site, an interactive form of advertising that calls for special marketing talent and programming skills in the hypertext markup language (HTML). Think of your Web site not only as the page in a magazine where your advertising begins. The browsers help people find your site since they can search thousands of sites by category, key words, or, in a soon to be released browser, abstract concepts.
Your Web site consists of a “home page” or welcome screen and as many sub-pages or screens as you require to communicate your message. These can include graphics, photos, animation, sound, full motion video or simple text.
Some of the benefits of marketing via the World Wide Web are:
- Achieving instant international exposure and reaching potential clients on a global scale.
- Targeting local markets with specific offerings or by using “neighborhood” sites or malls.
- Spending fewer marketing money.
- Creating interactive advertising: your audience gets involved with your messages, customers are not just reading them.
- Educating, entertaining and selling interactively.
- Expanding your reach and providing users with convenience because there are no time limits, geographical boundaries or store hours.
- Tracking and retaining valuable information about clients and prospects to improve future performance.
- Increasing the timeliness of your messages-it’s easy to update or change your advertising messages, as often as you wish
While bricks and mortar will be around for a long time, they will be far less important and incrementally more expensive in the future. Locational convenience, the key delivery philosophy of banking for decades, now means: “I want to bank in the location I choose, when I choose, in the way that feels most convenient to me.” The banks of the future will organize around that desire. The successful financial institutions of the future will deploy their assets – talent and technology – to deliver that level of convenience. So what is your next job ? Select and load a Web server with information
Selecting a Web server requires balancing your needs with the different ways there are of placing material on the Internet. Basically, you can either rent disk space with an existing Web server company or you can buy a computer and connect it to the Internet. If your information processing department has experience connecting UNIX computers to the Internet, then you should consider handling your own Web server. If your Bank is just learning to use the Internet, then you may be better served by renting space at a Web server company. Once you have determined what Web server computer will be used, you will upload your text and graphic files to your secured directory. We will also work with the administrator of your Web server to register your Web address with the Internet administrators so any user in the world can connect to your marketing material. And don’t forget to promote your Web site. Here are five ways we help promote your Web pages to your target market:
- List your Web site in on-line directories with live links
- Post announcements in appropriate public discussion areas and mailing lists
- Distribute a news release to editors of print and on-line publications
- Assist you in answering questions on-line that lead people to your Web site
- Include your Web address in traditional marketing materials (e.g., advertising, literature, etc.)
By developing an on-going promotional program, your Web pages stay in front of your key prospects, generating inquiries and new accounts !!!
After you have generated awareness and interest in your Web pages, and after consumers have decided that your bank services is best for them, the next step in your Web marketing program is to Respond and to Accept.
While these steps may sound easy, it takes proper implementation here to ensure that you receive the full benefit of your marketing program.
Respond to inquiries. When on-line consumers find a product they like, they want to move from high-tech to high touch—and ask a human a few questions. Sometimes you’ll receive e-mail. Sometimes you’ll receive phone calls. Either way, you must respond to these questions quickly and intelligently.
Why quickly? Because the speed of providing information on Web pages conditions people to expect quick answers to questions about their unique needs.
Why intelligently? Because the information you provide prospects on Web pages has taken them further through the product evaluation process than any other marketing process you’ve used. While this reduces the time your sales staff spends with unqualified prospects, it increases the level of expertise needed in your sales staff. If they can’t quickly answer technical questions about your products, you’ll lose sales that were already yours.
Accept orders. The question of how to accept orders from Internet bank customers is quickly changing via Electronic Commerce.
Electronic commerce, will provide a convenient way to pay over the Internet, using existing relationships. Merchants and banks alike will be able to reach the millions of customers throughout the world who use the Internet and who want to buy and bank at home. Buyer values are changing. Traditionally customers wanted locational convenience, convenient service hours, professionalism, and competence. In the future customers will want convenient access anytime, anywhere, seamless service over multiple locations and channels, and security. Banks responding to those values by opening on Saturday and Sunday will find that response both inadequate and expensive, and that it won’t be enough for the future. Chip technology is letting consumers to download value onto their cards from a PC or telephone in their homes, whenever they want, and then to use that value as cash. They won’t even need ATMs. They’ll even be able to transfer money peer-to-peer, further eroding the need for cash or checks.
The question of whether to take your financial institution online seems hardly worth asking. Of course you’ll go online. Everyone will go online. The entire world is wiring up as fast as it can. In fact it certainly is worth taking your bank online. Along the way you’ll face some of the same questions and concerns that early adopters of the telephone faced, and that the earliest advertisers on radio and television had to deal with.
I believe that the Internet will be the medium of economic interaction between financial service providers and consumers in the not-distant future. I also believe that hype and a headlong rush are counterproductive. Technology is maturing, and our culture is coming to grips with the idea of global interconnectivity. Whatever your current web strategy, now is a good time to catch your breath, and ask how the communications technology of today can be used to connect you to the customers of tomorrow. But the big question is Ok we build it, will they come? Websites are expensive to develop and operate, especially secure financial sites. What is the payback? Will customers use the site, and thus see the professionally designed, psych profiled content that you paid so much hard-earned profit for? Well yes, they will. Direct mail arrives at the sender’s convenience. Telephone calls often lead to a black hole of voice mail. Television advertising is asynchronous, unpredictable, and unindexed. Newsprint leaves black stuff on your hands. The web offers people a way to sit down at their convenience and extract amazing amounts of information on the products and services they need. It’s a lot cheaper than traditional forms of advertising. One of the reasons for this is that the web is not advertising. It’s more like a storefront that isn’t subject to zoning regulations. Your storefront on the web can save you a lot of money. It can help you successfully market accounts, and then retain them post-sale. But you’ll see these benefits only if you can entice people to self-select themselves into your community. Give your customers just a little bit more of it, and they’ll stick with you. Websites can be tremendous time savers, if they are interactive and let the customer accomplish useful activities. How do you deliver? Pre-sale your site is a marketing and information collection machine. Customers should quickly find your site when searching on any of the relevant keywords, or by following links from resource lists. Once there they should be able to move directly to the information they need. If there are unanticipated questions there has to be a way to ask them. It may slow one customer down to submit email, but you’ll collect these queries and provide the most popular online for the next guy. In the future you’ll be able to have representatives who can speak to the customer online over the net using voice technologies.
Assuming the information is satisfactory, you want them to move from the prospective to current camp right there, without delay. Once they are in the current customer column, the website becomes a place for you to service them, enhancing account retention. You save time and money, and so do they. How do you service them? By plugging them into their account information, and into your customer service operation.
Accounts are repositories of fluctuating value. Every day of our lives our accounts tell a tale of our activities, and our current financial balances. As consumers we’re interested in this information for the same reasons that we might have nervously counted our dried nuts on a winter’s evening a millenia ago.Just a hundred years ago it was a lot easier to keep track of your financial health. Today things move more rapidly. Transactions flow in and out: A son or daughter at college spends money on a charge card; An employer direct deposits a payroll voucher; A small businessman moves a cash advance from his charge card to his business checking account. Our financial fortunes change much faster now than the ability of monthly printed statements to keep pace. Consumers can call into customer service to get information, but that costs you money, and them time. They can enter transaction data laboriously into a money management program, but that gives a good view of the past only. A fully-interactive account website removes these barriers, providing the customer and institution with savings in time and costs. It makes available information on currently posted transactions. It exports transactions into popular software. It provides a set of management tools: searching and reporting, transaction annotations, transaction category management, consolidated billing statements, realtime balance queries. And it is not completely passive. The fully-interactive account website reaches out to its users. Users get mail from the site when certain transactions post, a balance approaches a set point, the account cycles, or when important offers are available. When users have a problem, a well-engineered account site offers them ways to resolve it, and email confirmation when resolution is achieved
To make the Internet pay for your institution, build a site that is fully-interactive; that plugs the customer into your services and saves them time, while saving you money. When you save customers time you’ll keep them coming back. They’ll visit the site monthly to download transaction data into Quicken, Money or any other financial software. They’ll set an email reminder to notify them when a credit posts, instead of calling you to see if it has. They’ll use the site to search their account history, finding specific transactions, or categorizing expenses. The future holds even greater promise. The networked future is going to be an interesting place, with far more benefit than risk. The costs of providing services are going to be reduced, because the costs of the storefront are being slowly eliminated. Making financial services available on the web is not cheap, but it is less costly by far than all of the delivery mechanisms it has the potential to replace. The only real question, which we hope these pages help you to answer, is which part of the wave you want to ride.
You’ll want as many people visiting your site as possible to generate leads and make sales. This means getting the word out about your locations and services.
Although the Internet initially provided only text-based information in one color, the Web is now completely interactive and viewers can see your materials in full color. And you get a bonus: unlike printed material, there’s no premium for having a full-color Web site since most PCs today have color monitors. “Interactive” means the reader gets involved in the material-making choices, clicking buttons, choosing what to read, completing interactive forms or questions, viewing, considering and responding. Viewers can respond to questions, get answers to their questions, review catalog pages and more. Interactive sites may also include a video clip or allow viewers to complete an application or order form on-line.
The Web offers a valuable opportunity to present dynamic, full color information to potential customers. But much like direct mail, you have one brief chance to capture a viewer’s attention. If your home page doesn’t appear to offer anything of interest, or if it never changes from week to week, you can be sure viewers won’t linger or return. You will have lost your opportunity to make a strong, positive impression on a potential customer.
Here’s an example of a menu that is not likely to attract much interest, therefore a format you will want to avoid.
- Papadopoulos Bank is the largest bank in the country
- Papadopoulos Bank has more branches than any other bank, and more ATMs, too.
- Papadopoulos Bank does business in 50 countries.
If a list continues like this indefinitely, and offers no benefits or entertainment, few viewers will be tempted to read on. Consequently, the business benefit Papadopoulos Bank receives from its Web investment will probably be minimal or nonexistent.
Be sure you offer viewers information of interest to them and let them know they will find equally interesting information if they return to your home page again next week and the week after.
Don’t just convert your print or TV advertising, the Web is interactive. Computer users need entertainment as well as information. Make sure your site includes a live exchange of information and results.
- Avoid the “King Kong Syndrome”-give them more than just chest pounding. Tell them some thing they can use.
- Merely having buttons viewers click to access new pages isn’t interactive marketing. Get them involved.
- don’t use a complicated Web address. Spend a few more money (in Greece is approximately 250 Euro) and get your own domain name, for example, MyBank.com instead www.papadopoulos.net.gr/financial/banks/mybank
- Don’t leave people hanging in sub-pages with no fast way to get back to your home page. Good Web design includes hot links or buttons for navigation throughout the site.
- Forget pictures of your headquarters, branches or ATMs. Nobody is interesting and don’t forget that these prospects are banking in cyberspace.
- While video clips, sound bites and animation can be entertaining, don’t get carried away and over-use them right now. Most PC users don’t have fast enough modems, sound cards or full motion video.
- Remember to emphasize benefits, and make it worth while to visit your site.
- Be sure to keep it up to date to encourage repeat visits.
- test your site before you on-line with it. You don’t want to frustrate customers or viewers with many options that don’t work.
With Web use booming so rapidly, hundreds of programmers are popping up all over the place offering to put your message on the Web. watch out. Could you justify hiring computer programmers to create your print or television advertising? Of course not. The same is true for developing interactive advertising and message content on the Web. Even traditional agencies may find the transition difficult. A television commercial or print ad is one thing, involving the viewer in interactive choices is another.
You’ll also want to be careful not to simply convert your brochures. The Web is interactive and brochures are two-dimensional and static. Print brochures are held in the hand, and readers can skim and manipulate them at will. In many instances, brochures were designed to attract attention in a pile of mail. People choose to visit and view your Web site on their computer screens. The screen is a different size than a brochure, and the content viewers see should be designed for that media, using all of its potential capabilities to captivate, involve and motivate the viewer.
You also want to include an element of entertainment for your audience. Although computers aren’t televisions, monitor screens look like TVs and we’ve grown up in a TV culture expecting to be entertained. People browsing the Web should be entertained, too. Just slapping a logo at the top of your screen and scrolling through a lot of text will turn off more potential customers than it will turn on.
Also, it’s clear that advertising that strikes a cord with the viewer tends to attract more attention and be more memorable. If you can provide a menu option that is amusing, thought-provoking or educational (to name a few ideas), you are more likely to make a memorable impression on your viewers. Clicking Buttons Is Not Enough: Offer Useful Information
Having viewers click a button to get to the next screen may seem interactive, but it’s only equivalent to turning the page in a brochure. Remember that practically anything you can have viewers do over the Web, such as entering amounts that run through calculation routines on your Web server. Viewers can use their browser’s print feature to get a hard copy of the results.
Here’s a list of just some of the things you could do to involve viewers and get them referring others to your site:
- Let users enter a small amount they want to invest, select a term, and then give them the projected value in the account at maturity.
- Prompt potential home buyers to enter their income and expenses, and then show how much house they can afford. Pre qualify prospects over the Web.
- Give viewers different boxes to check on a mortgage comparison prompt screen, then show them the difference between a fixed and variable mortgage or one with no points.
- Another mortgage comparison screen could let viewers enter the amount of mortgage they need and the term. You show them a comparison between a conventional mortgage and a biweekly payment, including the amount the potential borrowers could save and how much faster they’ll pay off the loan.
- Put up a screen where viewers can compare credit cards. For example, they enter their current card rate and balance and the amount of the annual fee. Then you show them an instant comparison of the savings they could realize by transferring their balance to your card. One more click, and they can request an application, or even better-apply on-line!
- Show prospects the advantages of switching their checking accounts to your bank by giving them a place to enter their average balance and current fees, then showing them the annual cost of maintaining their current account and the potential savings by switching to your institution.
- Give prospects a comparison between buying or leasing a car. They complete appropriate questions and you make the calculations and show them the results.
That’s the simple stuff. It’s also simple to offer home banking on the Web, provided you pay careful attention to encryption and security. The possibilities are endless. The main idea is to entertain prospects by letting them explore ways to save money, earn more money or enhance their lifestyle, and then show them actual responses to their interactive input.
As the Web grows, so do new businesses. Some are devoted to rating Web site, and both new and avid browsers listen to these ratings. You’ll want to get a “cool” rating so people will want to visit you on the Web. Some financial institutions actually maintain indexes of all new or popular Web sites. Word spreads quickly on the Web: it’s a very powerful and efficient communication vehicle. Advertisers with “cool” or intriguing Web sites can have millions of people shopping them and buying their products. Offer Premiums or Provide Incentives To Visit Your Site. A great way to build traffic is to give people an extra incentive to visit you on the Web. Netscape does this by offering a free CD-ROM disc. They require you to navigate through all of the pages in their site to find the offer to get the disc, and they keep moving it around to make things interesting. Consider doing something similar for interest your new business over the Web. Start an On-line Newsletter or Chat Group An on-line newsletter is a great way to distribute information about your financial institution and products. And, just think of all the postage and printing you’ll save since people view it on-line. As users register to receive your newsletter, add their e-mail addresses to an electronic mailing list. When you’re ready to send a new issue, just e-mail the entire group and you will get your newsletter instantly. Once people start to visit your site, you can begin collecting information to profile them and store it in a database which can be mined for sales opportunities at a later date. Your database should include traditional demographic information as well as users’ e-mail addresses. This will let you broadcast responses via e-mail to selected targets.
I could not close my presentation as Cretan without a Cretan paradigm shift like the myth of Ariadne. So, if you want to be always connected with your Theseus (customer) in the daedal building of Knossos (market) you must be always aware of the King Minotaurus (competition) and always use your weft (marketing) to build a strong web !!!
Dimitrios Pavlakis
