Banks want you!
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Banks want you!
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KAI RYSSDAL: Wedged all around the political ads we’ve been hearing this fall was a campaign of a very different sort, and this one’s still going on: Banks trying to woo you to bring your money to them. There’s nothing new about a financial institution trying to attract new customers, but there’s a lot new about banking that makes those institutions eager to get you to do business with them. We asked Marketplace’s Lisa Napoli to investigate.
[Bank Atlantic commercial
“Over 20,000 people a month are opening bank accounts at Bank Atlantic. Are you ready to switch banks?”
LISA NAPOLI: This East Coast bank wants your money, and to get it, they’re offering you a variety of gifts:
[Bank Atlantic commercial continues
“Don’t you want a $77 Master Card gift card for opening a free checking account? Don’t you want a portable TV or MP3 player, free?”
The answer might be yes, but that’s not inspiring most of us to sign up. Fewer of us are switching banks these days, and banks are learning there’s more to winning you over than freebies.
RICHARD WESTELMAN: “People aren’t chasing the toasters any more.”
That’s Richard Westelman of Hitachi’s Dove Consulting Group, which studies banking trends.
He says banks have done a good job of convincing us to do everything electronically. 70 percent of us now use direct deposit and half of us pay at least one bill online. That means it might just be too much work to leave your bank:
WESTELMAN: “When I go online to pay my bills, there’s now probably 30 different payees and if you told me tomorrow you want me to switch banks, my first question is gonna be, what about all that?”
Banks are ready with an answer:
LINDA VERBER: When a customer comes to use we can get them everything they need as it relates to the new account opening process.
That’s Linda Verber of Commerce Bank in Cherry Hill, New Jersey. Like many banks, they’re offering to do the heavy lifting:
VERBER: “We’ve got a concierge service that helps with the tougher stuff, so the tougher stuff is direct deposit and a lot of those bill pay transfers, but we can do it right there. We can do it for them, we can do it with them.”
New technology coming down the pike will make it even easier for banks to make it easy for us to switch, but how do you convince an entrenched customer that a checking account’s not just a checking account?
LANI HAYWARD: “You can’t really differentiate through product, you cannot really differentiate through rate, and you really can’t outspend or outresource the big guys.”
Lani Hayward’s with Umpqua Bank, which serves the Portland, Oregon area.
HAYWARD: “So we decided we were going to hone in on something that was missing in the financial industry, look at being a retailer of financial products and services.”
That’s marketing speak for making snazzy branches look like boutiques, not banks — and function like community centers.
No desks. Cozy chairs. Mood lighting.
Umpqua serves free hot coffee and cold water. It even has a dog dish out front to welcomes pets.
There’s free Internet access at computer terminals and a music download station so you can sample local artists, and after every transaction, you get a free chocolate.
HAYWARD: “And it’s good chocolate, not just any chocolate.”
Hayward figures if perks like chocolate make people happy, then they’ll tell their friends.
HAYWARD: “The best marketing is word of mouth-if you want anyone to switch banks or doctors or whatever, it’s who tells you about it and that’s what this is really all about, is that it’s something that’s so different and so good that you go tell other people about it. It really is the small things like that just make you feel welcome. Simple.”
In other words, toasters may be out, but service is back in style. That’s got to be good news for anyone with a bank account, even if you plan to keep your money where you’ve got it.
I’m Lisa Napoli for Marketplace Money.
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