 COMPANY: Allfirst Financial
PRODUCT/SERVICE: Online Banking & Online Brokerage Services
TECHNO-READY MARKETING CONCEPTS ILLUSTRATED IN CASE STUDY:
- Customer-Focused Design - Offering customers a product/service that is functionally beneficial and usable to techno-advanced as well as techno-challenged customers alike
- Reassuring Communication - A display of the efforts a company has taken in order to ensure the security of online monetary transactions
- Responsive Customer Care - Provisions taken by a company's customer service department to provide effective customer care that takes into account varying degrees of customer techno-readiness
ABSTRACT:
Allfirst's launching of its e-service banking and online brokerage services displays several concepts of a well-implemented techno-ready marketing scheme. It introduced these services in January 2000 in response to fierce industry competition. However, the skeptical and paranoid mood at the time in regards to online monetary transactions posed serious obstacles to the bank's plans for a techno-edge. Allfirst had to come up with a marketing scheme to reassure customers of their online communications with the company by reinforcing the idea of online banking security. Secondly, the bank had to assure its customers that this new technology service was simple to use and would be backed by responsive, sensitive and timely customer care service at no extra charge or hassle. This is a classic example of a customer-focused design that not only deepened relations with existing customers but also forged paths towards acquiring new customers.
Allfirst Financial Inc. is a Baltimore based, regionally diversified financial services company. It offers a full range of services including banking, trust, investment and insurance to retail, business and commercial customers.
Responding to the fierce competition in the U.S. financial services industry, Allfirst introduced its own online banking and online brokerage services in January 2000. These services allow customers to conveniently access their accounts and trade stocks 24 hours a day, seven days a week.
"Our Internet Brokerage Service is another way that we can help customers forge a strong financial future," says Mark A. Mullican, president of Allfirst Brokerage Corporation. "We feel the competitive price, convenience and speed of this service will be attractive to many of our customers."
However, at the time many customers viewed online banking and investing as a forbidding area in e-business. Among the top concerns customers had were the security of their personal financial information, the user-friendliness of complex technology, and the need for advanced financial knowledge.
Management at Allfirst understood that the most critical issue facing their e-business initiative was whether they could overcome security hurdles and ensure effective customer service to alleviate any problems customers might have with the technology. Recent statistics from Boston Consulting Group emphasize the difficulties consumers experience with online transactions:
- 4 out of 5 online purchasers have experienced at least one failed purchase
- 28% of all online purchases fail before the transaction is completed
- 25% of those frustrated by an online purchase say they will not shop online again, and 23% will not buy from that particular site again
How did Allfirst solve these problems? The following provides a brief summary of the strategies they adopted.
Safety issues:
Allfirst decided to focus its online business primarily in the Maryland, Virginia, Washington DC and Pennsylvania areas, where it has 575 ATMs, 250 branch offices and a strong brand name. The company's physical presence served as a source of comfort for Web skeptics in those areas. In addition, Allfirst designed and posted a clear and detailed privacy statement on its website to guarantee the privacy of its customers' financial information.
Customer service issues:
To ensure responsive customer service, Allfirst provided a variety of services that included an online demo, FAQs, e-mail, and 1-800 numbers. However, as its online business has grown, Allfirst has also felt the need to add personal real-time interaction to its Customer Relation Management (CRM) strategy. The company evaluated three options - text-chat-room, call-me-back-message, and Web-Voice - against four criteria- immediacy, ease of use, ease of implementation, and cost. Among the three options, Web-Voice stood out across the board.
The key technology for Web-Voice was provided by eStara's OneClick contact. Using VoIP (Voice Over Internet Protocol), customers can use a single phone line to surf the Web and pose questions to a customer service representative at the same time. Thus, VoIP facilitates query resolution on subjects ranging from e-transactions to customer complaints, all in real time. After a Web user clicks the button, eStara delivers the call directly over existing phone lines. The end result is clear, crisp voice quality communicated in seconds.
As an enhanced CRM tool, the Web can increase sales efficiency and customer retention, and prove to be an integral part of an enterprise's e-business model. Addressing the bottom line, this solution generates more online sales and converts browsers into buyers. Additionally, no change is needed in infrastructure, as the connection is delivered directly from the Web to existing phone lines. The result can then be tracked and measured just like a traditional phone call. More important is the ease with which employees can implement the practice: "Since the people in the call center are trained to answer calls, we did not have to do anything differently," notes Megan Lembach, Allfirst's assistant vice president and Web content manager.
Results of Techno-Ready Marketing
Within a year after initiating its e-business model, 10% of Allfirst's retail customers (representing 50,000 households) had started using the Internet for home banking. Indeed, the marketing demand for their online service was growing beyond Allfirst's own projections.
One year after the launching of its Internet banking and brokerage services, Allfirst reported net income of $184.4 million for the year 2000, representing a 7% increase over 1999. Allfirst announced that it "benefited from strong growth of 14% in non-interest income from core banking activities (excluding securities gains), most notably 16% growth in electronic banking income. These income streams were driven by both the acquisition of new customers and increased penetration of the existing customer base."
Beyond those monetary benefits, Allfirst also maintained its proud heritage of serving the community, and is now known for its "human approach to banking."
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