Banking on inertia: how US banks are missing the online opportunity
With only 27% of North American consumers stating that they have a seamless experience from their banks’ branch, online and mobile offering despite 60% of them using online banking at least weekly , the pressure is on for these large organisations to shift their customer strategies to active engagement from one that relies on inertia. This week The Drum’s Mystery Shopper reviews the online performance of the USA’s top four banks in terms of numbers of branches open to identify who is cashing in and who is checking out.
Insight: Revenue comes from traffic that converts. Having more traffic than your competitors is a real advantage
Analysis: This is a huge market. Between them these four attract c.100m visits in a month in search alone on Google. Wells Fargo are ahead of Bank of America and Chase. US Bank are a long way behind the other three with around 25% of the traffic of Wells Fargo which, with this advantage, has the largest opportunity to make a success of its online sales execution.
Insight: If you are confident about your sales execution (ie customers stick on your pages and convert well) then you don’t have to outbid your competitors to gain a top 3 ad slot, which is where you will attract exponentially more traffic than position 4 or below.
Analysis: This is an industry where paid advertising plays a less significant role in attracting visits from search. Partly, no doubt, because three of the four have very limited campaigns. Even while having a significant advantage over the other four, Bank of America is only attracting 1.4m visits a month out of its c. 40m – fewer than 5%. This is a market where leaders are not as concerned about competitive threats as say those in fashion retail.
Insight: Landing pages are a mark of how well you understand the different customer needs that you are fulfilling. The Landing Page Ratio indicates how much thought is going into segmenting both the marketing proposition and the initial sales engagement – the higher the ration, the more effective the customer engagement. The ration takes the top 100 keywords and identifies how many, as a percentage, have an individual landing page.
Analysis: E-commerce performance comes from successfully segmenting customers in the market and ensuring that where they land on the most relevant part of a website for their search. Despite the importance of segmenting their target users, none of the companies here perform particularly well. The best, Bank of America, stands at 27% and the worst, US Bank, sits at 17%. As a point of comparison, Walmart.com’s landing page ratio is 76% and Amazon.co.uk’s is 67%. Failure to respond directly to the specific search causes unnecessary frustration and will drive potential customers away.
Insight: Listening to your customers is vital, without understanding the needs and wants of a potential buyer it is near impossible to improve conversion.
Analysis: Of these companies, Bank of America and US Bank have full digital toolboxes while Wells Fargo is missing a voice of customer tool and Chase lacks on-page analytics. A full toolbox is crucial in being able to build the insight required to identify where the problems with the online execution lie and to then test these proposed changes. Despite three of these companies possessing surveying tools, at the time of writing none were actively asking for their customers’ opinions.
What can you tell from this?
• The obvious conclusion: Bank of America is the strongest online performer in this competitor set. They have a good level of search traffic, an extensive paid campaign and a full digital toolbox. This is however a position flattered by the performance of the competitor set. Against high performing e-commerce sites, with the exception of the traffic volume, this wouldn’t be anything to write home about.
• The inevitable conclusion: US Bank is the struggler. It has relatively poor search traffic levels and a small scale paid campaign. It needs to ask if it's effective in deploying the performance software it has put on its site.
• The surprising conclusion: Given the amount of money invested in marketing by the sector, this is not a vibrant and competitive online market. There is, relative to other sectors, far less investment in paid traffic, less interest in acquiring traffic (low keyword volumes bar one player) and evidence that, despite the investment in performance software, no-one at the time of writing is actively listening to customers and utilising this information in testing to find more effective marketing and sales executions.
• The insight: This is one of the few sectors where, despite significant levels of customer dissatisfaction (23% of customers are considering switching banks) there is a high level of customer inertia. Banking competition has been slow to build in other markets – for example in the UK the government intervened to create a simple bank-managed process to enable a ‘one-click’ transfer to help reduce inertia – but this won’t be true for ever.
While the crash of 2008 has made it more difficult for new challenger entrants to come into the market, it would only take one bank to wake up to the opportunity of becoming customer-led to be able to make significant inroads into the US market as more and more US bank customers engage online and feel less attached to the bank with the branch in their community.