Bank Marketing News

Millionaires are Bouncing Back: 16% more in 2009

Mark Rodrigues — Wed, 10 Mar 2010 18:14:00 GMT

Chicago, IL/ March 9, 2010 – Following a sharp 2008 decline in the in ranks of the wealthy, The Spectrem Group reports that 2009 was a bumper year for growing millionaires.

The number of U.S. households with a net worth of $1 million or more, not including primary residence (NIPR), grew 16% to 7.8 million in 2009, up from 6.7 million the year before, according to Affluent Market Insights 2010, a new report released today by Spectrem Group. This increase follows a 27% decline in the millionaire population during 2008.

Spectrem also reports that the number of Ultra High Net Worth households, those with a net worth of $5 million or more (NIPR), advanced 17% to 980,000 in 2009.

“The nation’s millionaires – together with its Ultra High Net Worth households – are bouncing back from the recession. Following a sharp decline in 2008, both groups saw their numbers advance nicely in 2009, with the U.S. millionaire population rising to 7.8 million. While still well short of its all-time high of 9.2 million in 2007, this year’s growth in the millionaire population is nevertheless welcome news for an economy still working to recover,” said George H. Walper, Jr., President of Spectrem Group.

In addition to the millionaire groups, the broader affluent population, those with a net worth of $500,000 or more (NIPR), grew by 12% in 2009 to 12.7 million.

Chart: Total Households 1997 to 2009 (millions)

Spectrem’s Affluent Market Insights 2010 is based on Spectrem Investor Research surveys of 3,000 affluent households conducted throughout 2009 with a margin of error of plus or minus 4.4%, an online survey of 1,498 households with a net worth of $100,000 to $1 million fielded in July 2009, and online surveys of 1,089 households with a net worth of $1 million to $5 million and 523 households with a net worth of $5 million to $25 million conducted in November 2009. The margins of error for those surveys range from plus or minus 2.4% to plus or minus 4.2%.

Source: The Spectrem Group.

Banks Have a New Troubled Asset: Their Customers

PRNEWSWIRE — Wed, 10 Mar 2010 14:38:00 GMT

Los Altos, CA, March 9 /PRNewswire/ Guardian Analytics, the innovator in predictive analytics-based fraud prevention software, together with independent research firm, Ponemon Institute, today announced the results of the 2010 Business Banking Trust Study.

The research offers the first comprehensive look into the pervasiveness of fraud, the state of security at banks and SMBs, and the impact of fraud on businesses' relationships with their banks. The results indicate that criminals are successfully attacking SMB bank accounts at an unprecedented rate, banks are failing to proactively catch fraud, and a high percentage of SMBs are firing their banks because they are experiencing fraud.

Over 500 executives and business owners from small and medium businesses (SMBs) in the United States participated in the study.

"Banks have a new troubled asset - their customers," said Terry Austin, CEO, Guardian Analytics. "The survey data proves that financial institutions are failing to protect the small and medium businesses that are at the heart of our economic recovery. SMBs are fed up with the banks that are leaving them vulnerable to fraud and not reimbursing them when they are attacked. Banks that do not improve their fraud prevention practices will lose customers and hurt their own recovery."

The 2010 Business Banking Trust Survey sheds light on where security, communication and trust are breaking down between SMBs and their banks, and the destructive impact that fraud has on the SMB-financial institution relationship. It also highlights that customers and banks are out of alignment regarding responsibility for protecting online accounts. Data highlights include:

Fraud Attack Rate: 55%of businesses reported experiencing fraud in the last 12 months, with 58% of fraud enabled by online banking activities.

Fraud Detection Rate: 80% of banks failed to catch fraud before funds were transferred out of their institution.

Fraud Loss Recovery: In 87% of fraud attacks, the bank was unable to fully recover assets.

Fraud Loss Reimbursement: 57% of the respondents that have experienced a fraud attack were not fully compensated by their banks.

26% were not compensated for any part of their losses.

Customer Churn: 40% of businesses said have moved their banking activities elsewhere after a fraud incident. 11% of businesses that have experienced fraud claimed they have terminated their banking relationship following fraud attacks, and additional 29% said they did not fully terminate their relationship, but moved their primary cash management services to another institution.

Transparency: 24 percent of businesses claim that their banks do not provide a policy explaining the bank's responsibilities to secure and protect their companies' accounts from fraud. 39 percent are unsure if such a policy exists.

"Ultimately the data points to the need for banks to evolve their definition of reasonable security and proactively invest in process and technology to better protect their online banking customers," said Dr. Larry Ponemon, chairman and founder, Ponemon Institute. "Only 20% of banks were able to identify fraud before money was transferred. The ROI of investing in fraud prevention is clear when you consider how fraud and churn drive productivity and profit loss as well as legal and reputation risks."

The Guardian Analytics 2010 Business Banking Trust Study includes more details on SMBs online banking behavior, their views of banks' security practices, and top five recommendations for banks to retain customers through better security and communication practices.

The full report is available for download at www.guardiananalytics.com/newtroubledasset.

Ponemon Institute was commissioned by Guardian Analytics to conduct the survey independently in February 2010. Guardian Analytics protects financial institutions and their customers from online fraud attacks and recently released FraudMAP® for Business Banking, the industry's first solution designed to prevent fraud in online business banking accounts from login to logout.

About Guardian Analytics

Headquartered in Los Altos, Calif., Guardian Analytics is focused on the prevention of online account fraud. The company's real-time risk management approach to fraud detection, forensics and risk monitoring is built on strong analytics and predictive models of individual behavior. Leading financial services institutions rely on Guardian Analytics to protect individual account assets and the integrity of their online channels. Founded in 2005, Guardian Analytics is privately held with venture funding from Foundation Capital. For more information, please visit www.guardiananalytics.com.

About Ponemon Institute

The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries.

Source: Guardian Analytics

BofA to drop Debit Card Overdraft Fee

Mark Rodrigues — Wed, 10 Mar 2010 14:27:00 GMT

Charlotte, NC/ March 9, 2010: Bank of America announced today plans to stop paying debit card advances that go over the available balance limit. The practice of paying overdrafts and charging a $35 fee has been an important source of revenue for Bank of America, as for most institutions.

The new policy will begin for new customers on June 19 and in August for existing debit-card holders. Citigroup Inc. already has a similar policy in place.

"The majority of our customers who overdraw their account do so with everyday debit purchases," said Susan Faulkner, senior vice president of consumer banking for Charlotte, N.C.-based Bank of America. "They're doing this unknowingly, because they aren't aware that they are about to overdraft."

Since the bank doesn't have the ability to notify the customer when they're at the register and give them the chance to agree to a fee, it will simply reject such transactions.

Also, BofA has announced that they are paying a $75 bonus to open their new "My Access" checking account. Terms include the requirement that $125 must be deposited into the account within 30 days of opening the account, and that the bank has up to 90 days to payout the bonus.

Equifax Study: Business Failures on the Rise, Small Business Bankruptcies on the Decline

Mark Rodrigues — Wed, 10 Mar 2010 13:42:00 GMT

Atlanta, GA, March 9, 2010: To understand how market conditions today impact small businesses, Equifax examined key credit trends within the portfolios of top national and regional financial institutions, which together extend about 75% of all commercial credit. What the study found was something seemingly contradictory.

According to the Equifax study, fourth quarter 2009 data indicated that there were both improvements and setbacks notable in the trends for commercial bankruptcy, business failure and delinquency. While Equifax analysis showed an average 15% decline in commercial bankruptcies for the second half of 2009, there was a 14% increase in the number of bankruptcies reported during the fourth quarter of 2009 compared to the same period in 2008.

"Despite rising business failures and account delinquencies, the commercial landscape has revealed some surprises such as a double digit decline in small business bankruptcies during the second half of 2009," said Dr. Reza Barazesh, senior vice president, Commercial Information Solutions, Equifax."While these trends send mixed economic signals, it is clear that small businesses remain in a fragile state trying to navigate strong market pressures. How long this trend will continue is the question."

According to the Equifax study, there was a smaller bankruptcy rate change for multiple geographical regions from Q3 2009 to Q4 2009 than in previous quarters. However, bankruptcy rate changes across multiple regions remained high from Q4 2006 to Q4 2009. In all, 5 out of 9 regions saw a rate change of more than 50 basis points during this time period.

The most difficult regions for bankruptcy were the Pacific and Mountain regions. These areas experienced a rate change of 72 and 61 basis points respectively from Q4 2006 to Q4 2009.

Small business bankruptcies continue to climb in the transportation sector,surpassing all other industries. According to the study, the bankruptcy rate for the transportation industry reached 2.64% in Q4 2009 - a marked increase in the rate change from Q4 2006. Strongly impacted by these trends as well was the construction industry, which experienced the largest rate change from Q42006 to Q4 2009. Manufacturing, retail and mining also showed strong increases during the same time period.

Equifax research on business failure uncovered some interesting findings in light of continued delinquencies and bankruptcy trends. According to Equifax, the percent of businesses with the highest risk of failure increased from 0.31% in Q4 2006 to 0.85% in Q4 2009. For the analysis, Equifax leveraged its Business Failure Risk Score, which projects the likelihood of business failure in the next 12 months.

Chart One: Percent of Businesses with Highest Risk of Failure

(Note: Analysis conducted using Equifax's Business Failure Risk Score.)

According to Equifax data, average past due dollars for lines of credit reached $37,160 in Q4 2009, a 273.4% increase over Q4 2006. Delinquencies for term loans saw the second highest rise, with a 139.8% increase in average dollar delinquency during the same period. Also not immune to this trend were credit cards, with the average account delinquency totaling $3,255 in Q4 2009 - a 43.3% jump from Q4 2006.

Chart Two: Delinquency Dollars

For more information about Equifax Commercial Information Solutions, visit www.equifax.com/commercial.

Equifax is a registered trademark of Equifax Inc. Inform, Enrich, Empower is a trademark of Equifax Inc. The Equifax Business Failure Risk Score is a trademark of Equifax Inc. Copyright © 2009, Equifax Inc., Atlanta, Georgia. All rights reserved. Printed in the U.S.A. Media Data Primer - 2/2010

To view a PDF of this entire study, see www.equifax.com/PR/pdfs/CommercialFactSheetFN3810.pdf.

Experian Study Profiles Demographics of Digital Marketing Channels

Mark Rodrigues — Wed, 24 Feb 2010 19:59:00 GMT

Schaumburg, IL, February 23, 2010: Experian Marketing Services released today the results of its annual digital benchmark survey. This updated study aimed to profile consumer behaviors and preferences for 2010 with regards to text messaging, cell phone, email and internet marketing channels.

The key findings from the report include:

Adults ages 18 to 34 prefer instant messaging, text messaging, cell phones and social sites as main sources of information and entertainment;

Consumers 50 and older prefer the Internet to their mobile phones;

Adults over age 50 tend to engage in online activities like researching financial and medical information;

Those ages 25 to 49 spend more Internet time banking online and reading news;

Digital addressable advertising delivered to targeted households improved media efficiency by 56%;

Emails promoting in-store visits in 2009 grew by 50%, highlighting the increased usage of email for cross-channel marketing;

There are 276.6 million mobile phones in the United States, and more than 70% of mobile phone owners always carry their phone; and

Consumers continue to start offline shopping trips while online at home with searches that usually are branded or navigational and comprise only one or two keywords.

"Consumer behavior and preferences have shifted in favor of digital experiences and constant connectivity," said Ashley Johnston, vice president of marketing for Experian Marketing Services. "Marketers who understand and embrace the digital landscape as it exists today and combine this knowledge with consumer insight and data-driven best practices will realize greater customer engagement."

To download Experian Marketing Services' 2010 digital marketer: Benchmark and trend report, visit http://www.experian.com/marketing-services/register-2010-digital-marketer.html

Source: PRNewsWire, Experian Marketing Services

Rate Trends: Y2Y, over Six Months, since Year-end

Mark Rodrigues — Mon, 22 Feb 2010 18:59:00 GMT

Yes, the long-standing decline in deposit rates nationally continues. And with the exception of conventional mortgages, loan product rates continue shrinking slowly. Fee based services, however, show significant movement particularly with bill-payment services. Has the industry reached a critical mass of users for more to start charging for bill-pay? The highest monthly fee we've noted is $25, with most at no-charge. The average for bill-payment services nationally, considering all the free programs, is up to $6.76.

	Trend - Percentage Change from
	Trend - Percentage Change from
Liquid Accounts	from February 20, 2009	from August 21, 2009	from December 21, 2009
Interest Checking $2,500	-17.39%	-7.32%	-2.56%
Premium Interest Checking $10K	-21.82%	-10.42%	-4.44%
Regular Savings $1K	-28.26%	-5.71%	0.00%
Money Market $10K	-38.71%	-16.18%	-5.00%
High Liquid Money Market $25K	-39.66%	-16.67%	-5.41%
High Liquid Money Market $50K	-39.10%	-16.49%	-5.81%

Term Accounts
3 Month CD $25K	-55.56%	-27.78%	-8.77%
6 Month CD $25K	-49.35%	-24.27%	-7.14%
1 Year CD $25K	-42.02%	-19.26%	-5.22%
2 Year CD $25K	-28.24%	-11.43%	-3.13%
5 Year CD $25K	-13.57%	-4.35%	-0.82%
1 Year Jumbo CD	-41.97%	-19.42%	-5.88%

Average Checking Fees & Service Charges at Nat'l Banks
Flat Fee Checking -- Monthly Fee	7.50%	0.49%	0.16%
NSF Fee	0.38%	-0.86%	0.56%
ATM Surcharge Fee	-1.48%	-2.91%	0.00%
Stop Payment Fee	-3.28%	-3.52%	0.07%
Bill Pay Monthly Fee	92.59%	72.01%	-0.15%

Direct Auto Loans
New - 3 yr term, $20K	-6.00%	-2.69%	-1.49%
New - 4 yr term, $25K	-5.69%	-2.65%	-1.42%
New - 5 yr term, $30K	-6.14%	-3.43%	-2.05%
Used - 1 yr old, 5 yr term, $30K	-5.53%	-2.84%	-1.29%
Used - 2 yr old, 4 yr term, $20K	-5.19%	-2.69%	-1.90%
Used - 3 yr old, 3 yr term, $20K	-5.02%	-2.57%	-1.84%

Conventional First Mortgage
15 Year Fixed Conforming	-8.43%	-4.22%	0.63%
30 Year Fixed Conforming	-1.93%	-3.21%	1.87%
15 Year Fixed Jumbo	-12.88%	-6.57%	-0.02%
30 Year Fixed Jumbo	-11.60%	-5.90%	-0.85%
3 Year Adjustable Conforming	-20.11%	-8.66%	-2.90%
5 Year Adjustable Conforming	-19.74%	-8.56%	-2.27%
7 Year Adjustable Conforming	-18.14%	-7.88%	-2.27%

Mercatus Study Finds Strong Consumer Interest in Mobile Remote Deposit Capture

PRNEWSWIRE — Wed, 17 Feb 2010 14:31:00 GMT

BOSTON, February 1, 2010 /PRNewswire/ -- Strong consumer interest in Mobile Remote Deposit Capture (Mobile RDC) will dramatically alter the current deposit-taking activities of retail banks and provide a viable road map to banks pursuing 'thin branch' strategies, according to a study released today by Mercatus LLC, a strategic consulting and investing firm focused on retail financial services.

The Mercatus Mobile RDC Adoption Research Study was conducted in December 2009 as part of Mercatus' on-going Franchise Health study. The research queried more than 2,100 US consumers regarding their retail banking services needs, decision making, and behaviors.

"We expect consumers to significantly embrace mobile remote deposit capture and it will be the 'killer app,' said Bob Hedges, Mercatus managing partner. "With consumers placing a premium on convenience, mobile RDC has the potential to significantly change retail banking's business model by providing a way for people to do basic banking without branches. Retail financial service companies have the game-changing opportunity to provide both increased convenience and lower costs. Mobile RDC definitely levels the playing field across competitors."

According to the study, close to two thirds (59%) of today's mobile banking customers are likely to adopt mobile remote deposit capture if the technology is offered by their banks. At the segment level, 66% of mobile banking consumers age 26 to 34 and 69% of mobile banking users age 35 to 44 years old indicated they were likely to adopt mobile deposit capture.

Adoption potential was also strong among consumers not currently using mobile banking. Among consumers not currently utilizing mobile banking, 35% of consumers 18 to 34, and 25% of those age 35 to 44 indicated they were likely to adopt mobile RDC if it were offered by their bank.

Likely adopters pointed to several key factors driving interest in mobile remote deposit capture, including:

Convenience and accessibility of mobile phone-enabled deposits (52%)

Faster accessibility to funds (45%)

Lower time cost relative to other deposit options (39%).

Consumer reluctance to adopting mobile RDC was focused on a limited set of factors. In the Mercatus study, not surprisingly, potential security concerns were cited as the leading consumer factor in not being positively inclined to adopt mobile RDC. Reflecting the routine nature of deposit-making transaction, the next set of reasons cited by consumers for not using mobile RDC were the already convenient locations of branches and ATMs. Convenience is clearly the dominant consumer consideration.

"Consumer interest in mobile RDC, and mobile financial services in general, suggests that a significant percentage of deposit volume is available for migration to those financial services institutions offering mobile RDC," said Hedges. "Despite the potential opportunity mobile RDC presents, only a limited set of competitors have launched mobile RDC applications today. A significant strategic opening exists for the early adopters in that they can gain new customers, as well as reduce bank branch operating expenses," he said.

Beyond the compelling convenience benefits for Mobile RDC to consumers, the adoption of Mobile RDC represents a significant opportunity to reduce traditional branch deposit transaction volume. The Mercatus study found that consumers likely to adopt mobile RDC, today, are responsible for approximately 30% of branch consumer deposit volume. "With only moderate adoption of Mobile RDC by consumers, banks can expect to see dramatic reductions in the volume of branch deposit transactions. The incredible convenience benefit to consumers is equally matched by the strategic cost structure benefit to banks," Hedges said.

Mercatus forecasts that with Mobile RDC, more than 1.5 billion check deposit-making transactions will be eliminated from U.S. bank branches by 2014.

The Mercatus Mobile RDC Adoption Research Study builds on previous mobile financial services consumer research conducted by Mercatus. Among the findings of the December 2009 study, were:

Banks offering mobile financial services can increase new customer acquisition by as much as 60%

Nearly one-third of consumers are using, or considering using, mobile financial services in the next year

Consumer mobile financial services adoption will reach 53% by 2015, and exceed the use of online banking.

"Owing to its rapid pace of adoption, mobile is a market that offers a clear first-mover advantage. Banks that act soon, and aggressively deploy mobile financial services, will capture a clear market opportunity. Banks that delay will risk losing their best customers to the competition," said Hedges.

Methodology

This Mercatus research study surveyed more than 2,100 consumers over the age of 18. The survey was fielded to an online panel managed by Market Tools in December 2009. The results are representative of the U.S. population. The Mercatus Mobile RDC Adoption Research study was part of the on-going Mercatus Franchise Health consumer research program.

About Mercatus LLC

Mercatus LLC is a strategic consulting and investing firm focused on the retail financial services. Mercatus works with industry executives and private equity investors to make investment and business growth decisions. Mercatus is dedicated to delivering the insights, innovative thinking, and information required to equip clients for success in today's fast-changing marketplace.

Study Finds Direct Mail Usage on the Rise

Mark Rodrigues — Fri, 12 Feb 2010 16:22:00 GMT

Toronto, CN: February 10, 2010: Global market research firm Synovate reported today that the volume of direct mail credit card offers is starting to rebound. Synovate attributes the increase in direct mail volume as consumers become more financially confident and resume use of their credit cards.

According to Synovate, U.S. households saw 398.5 million credit card offers mailed to them in the fourth quarter of 2009, an increase of 46% over the third quarter of 2009.

"As the economy recovers, even at a modest pace, we expect credit to become available to consumers, albeit at a higher price," said Anuj Shahani, director of competitive tracking services for Synovate's financial services group. "With innovation on the forefront, credit card issuers are poised for a comeback."

This report found similar results to one by Mintel Comperemedia released at the end of January, which found that there was a 47%increase in direct mail credit card volume from the third quarter of 2009 to the fourth quarter of that year.

Five Bank Marketing Changes Predicted For 2010

Mark Rodrigues — Fri, 12 Feb 2010 14:58:00 GMT

February 10, 2010: According to Chicago-based Mintel Comperemedia, bank marketers may expect five significant changes in the industry for 2010. These changes involve:

1) The end of "totally free" in checking direct marketing;

2) More comprehensive rewards programs;

3) Programs designed to increase deposits;

4) More aggressive debit card marketing; and

5) An increase and expansion of cash incentives.

Marketing Daily quotes Susan Wolf, vice president of financial services at Mintel Comperemedia, commenting, "From the fall of free checking to the rise of comprehensive banking rewards programs, banks seem poised to make 2010 a year of innovations. The biggest challenge will be finding new opportunities for revenue."

According to the Marketing Daily article, one way that banks will attempt to increase revenue in 2010 is by creating automatic account builder products that boost deposits. Leading players Bank of America and Wachovia already feature savings programs -- Keep the Change and Way2Save. Capital One has just launched SmartCents checking. The objective with deposit-building accounts is to get customers invested in multiple products to improve retention while growing deposit balances.

According to reports from Mintel Comperemdia, Capital One and Key Bank are already offering $200 and higher as a cash incentive for opening a checking account. Mintel predicts that these cash offers will grow into a "hot" direct marketing tactic to gain accounts, with cash incentives growing even more enticing.

Source: Tanya Irwin, Marketing Daily

Please Participate In this Survey

Mark Rodrigues — Thu, 11 Feb 2010 14:51:00 GMT

Please take my survey on Post Recession Brand Marketing for Banks!

As banking professionals, let your voice be heard! In this current economy, and the era of "bank-bashing", branding and marketing your bank in a positive light is optimum for success.

I am a graduate student, currently going for my MBA Degree and am entering in the final year of studies. I am making this post in order to request your help in researching my MBA thesis which, in part, deals with the branding and marketing of banks in three different United States regions.

Marketing the image of a bank after the Sub Prime Meltdown and Wall Street crisis of 2008, and the ensuing Recession, has changed the way banks need to market themselves - or has it? Please take my survey and let me know!

If you are a banker in one of the following U.S. regions, your respective survey can be completed in 10-15 minutes and I would be extremely grateful for your time and opinions!

For the Midwest (the East North Central / Great Lakes states) survey,
please click on the link below, or paste the following URL into your web browser: http://www.surveymonkey.com/s/Q7XRN2W

For the Northeast (New England, Tri-State and Mid-Atlantic States) survey,
please click on the link below or paste the following URL into your web browser: http://www.surveymonkey.com/s/BCXV8PQ

For the Southeast (Southern seacoast and adjacent states) survey,
please click on the link below, or paste the following URL into your web browser: http://www.surveymonkey.com/s/Q7MTBZL

I thank everyone for their participation and continued success!

Submitted by Mike Dougan

How To Tell If You Have A Good Response

Mark Rodrigues — Tue, 09 Feb 2010 19:28:00 GMT

February 5, 2010, Chapel Hill, NC: "A good response is one that reaches your objective or better. How do you set a good objective? That depends upon measures that take in the bottom-line," stated Steve Cuno, author of The Bankers Direct Mail Bible and Prove It Before You Promote It.

[For more of Cuno’s secrets to direct marketing success, see Direct Mail Guru Tells Success Secrets.]

"If you can show provable results, the bean counters will leave you alone," commented Cuno.

Cuno, CEO of the Response Agency, Salt Lake City, Utah, offered his observations during an February 4, 2010 Webcast entitled, “Direct Mail: What Works, What Doesn't, and How to Get Started.” The presentation was hosted by OnsiteConference, Inc., a privately held research marketing firm located in Tampa, Florida.

"Your earnings objective should be based upon on what you know about the value of the customer,"stated Cuno. "That's where the LTV (Lifetime Value) comes in. If you know the return you can expect over the life of an account relationship, you can figure out how much you're willing to spend to secure that relationship. If an SBA line brings in a net $2,500 per year in revenues over five years, the LTV for that product is $10,000. When your cost-per-sale is equal to or less than that, you have attained a "good" response."

According to Cuno, It’s important to consider not just the income the product will generate over the life of the customer relations, but also the LTV of the client relationship itself. A new SBA client will likely open other accounts. The predicted profitability of all of these relationships combined should be considered when estimating the client's LTV. In the above example, $10,000 might be just the beginning of a new client's profit potential.

Once you have determined LTV, you can determine how much you're willing to spend to acquire the relationship. Again, let's say the LTV of a new relationship is an estimated $10,000. Now, do the math. What is the cost of your direct mail program? How many people is it targeting? What percentage of those people must sign on in order for you to average spending less than $10,000 per acquired account? Once you have that number, you can assess whether or not it's realistic to expect that from your direct mail. If you'll need to close 10% of the people on your mailing list to break even, that's ambitious. If you can make a profit by closing 0.25% of them, that's far more attainable.

Once numbers and objectives are in place, it's important to use every bit of direct response knowledge to your advantage. Include a compelling incentive offer. "Remember, the better heeled and better educated your market, the better incentives work,” continued Cuno, adding, “I know that may sound counterintuitive.”"

Cuno recommended the use of proven direct response formats and strategies. "If you don't know what these are, start reading direct response blogs, books and magazines. This is no time to proceed blind."

"So, how can you tell what response rate to expect? You need to consider past campaigns, your own testing and predictive results," Cuno continued.

Cuno believes that to establish response expectations, begin first with precedent—what’s happened before when you’ve run campaigns. Yes, you want to keep and roll out winners. But be careful, sometimes a winning approach wears outs. Also, flukes happen. A smarter approach, if you have the time, mail to a small, representative sample. If it gets the response you want, roll out the campaign.

"If your testing can garner thirty or more responses, you've got something predictable," says Cuno. Small tests keep failures small. Statistically valid small successes can indicate big wins ahead.

Cuno adds, "never retire a winning campaign simply because you’re tired of it. But do keep testing."

Edelman Survey Indentifies Keys to Repairing Trust in Bank Industry

Mark Rodrigues — Wed, 03 Feb 2010 18:45:00 GMT

Chicago, February 2, 2010: According to The 2010 Edelman Trust Barometer, the banking and insurance industries rank as the least trusted in the U.S., with banks recording the only slide in faith in the past year. In the U.S., trust in banks fell to 33% in the 2010 survey from 36%, while trust in insurers was the lowest in 2010 at 32%, although that level improved from 29%in the previous survey. Only media companies matched the 32% low. Technology ranked highest with a trust level of 81%.

The inaugural 2010 Edelman Financial Services U.S. Trust Barometer found that 93% of those surveyed believe problems exist in the industry that must be addressed and 63% think financial institutions need more regulation. While the Edelman survey was the first to focus in-depth on financial services, Edelman has conducted an annual Global Trust Barometer of major industries including banking and insurance since 2001.

This survey of 500 consumers age 25-64 also determined that "quality of communications" and "customer service" rate as important for the banking public as "price" and "performance" in influencing trust.

"We've seen significant changes in how people evaluate corporate reputations and the factors they view as most important in shaping their decisions," said Matthew Harrington, president and CEO, Edelman U.S. "Just three years ago, financial performance ranked as the top criterion for all U.S. companies. It now scores at the bottom, replaced by transparency and trust. In financial services specifically, companies must realize that transparency via frequent communication and high-quality customer products and services are as essential to creating and maintaining investor trust as superior returns and five-star ratings."

In the survey, community/regional banks ranked as the most trusted financial institutions in the U.S., with mutual fund companies and life insurance companies close behind. Brokers/advisors were ranked as the most-trusted sources to provide accurate information on investments, investing, or the markets. They were followed by friends or family, and CEOs were judged least-trusted.

While trust in U.S. financial services companies declined from last year's record low, the survey signaled a rebound in trust among informed publics ages 25-34. F or this demographic group, trust levels rose to 47% from 36% the previous year. "Informed publics" are college-educated, within the top 25% of households by age, and report significant media consumption and business news and public policy engagement.

Still, only 7% of those surveyed think the industry is problem-free, while just 8% believe financial services should be regulated less than they are now.

Business TV news, family and friends and local newspapers are the most widely used sources for financial information, according to the survey. However, among traditional, corporate and digital vehicles, none was more widely used than the others.

"With so many communications vehicles available to investors today, it's imperative that corporate marketers and communicators use them all," said Jeff Zilka, general manager, Edelman Financial Communications. "Our research underscores that people use a spectrum of media and need to hear a message five times before it registers. This suggests that financial-services executives must use a portfolio of traditional and online communications vehicles to convey their messages successfully."

About the Edelman Financial Services U.S. Trust Barometer

The 2010 Edelman Financial Services U.S. Trust Barometer is the firm's first annual trust and credibility survey tailored specifically to the financial services industry. The survey was produced by research firm StrategyOne and consisted of 10-minute telephone interviews using the fielding services of World One from October 13 - November 8, 2009. The 2010 Edelman Financial Services U.S. Trust Barometer survey sampled 500 informed publics in two age groups (25-34 and 35-64) in the United States. All informed publics met the following criteria: college-educated; household income in the top quartile for their age; read or watch business/news media at least several times a week; follow public policy issues in the news at least several times a week. For more information, visit www.edelman.com/trust/2010/docs/2010_Financial_Services_US_Trust_Result s_Deck.pdf or call 312.297.7508.

About the Edelman Trust Barometer

The 2010 Edelman Trust Barometer is the firm's 10th annual trust and credibility survey. The survey was produced by research firm StrategyOne and consisted of 25-minute telephone interviews using the fielding services of World One from September 29 - December 6, 2009. The 2010 Edelman Trust Barometer survey sampled 4,875 informed publics in two age groups (25-34 and 35-64) in 22 countries. All informed publics met the following criteria: college-educated; household income in the top quartile for their age in their country; read or watch business/news media at least several times a week; follow public policy issues in the news at least several times a week. For more information, visit www.edelman.com/trust or call 212.704.4530.

About Edelman

Edelman is the world's leading independent public relations firm, with 3,200 employees in 51 offices worldwide. Edelman was named Advertising Age's top-ranked PR firm of the decade, PRWeek's "2009 Agency of the Year" and "Large Agency of the Year" (for the third time in the last four years), and Holmes Report's "Agency of the Decade" and "2009 Best Large Agency to Work For." Edelman owns specialty firms Blue (advertising), StrategyOne (research), and BioScience Communications (medical education and publishing). Visit www.edelman.com for more information.

CONTACT:
Sheila Keane, 312.297.7508, sheila.keane@edelman.com

Source: Edelman, Web Site: www.edelman.com/

Key to Wealth Management Sales Success: Trustworthiness and Resilience

Mark Rodrigues — Wed, 03 Feb 2010 17:31:00 GMT

Chapel Hill, NC/ February 3, 2010: According to semi-annual research just released by Phoenix Marketing International, investment firms must be perceived as trustworthy and able to weather difficult times in order to attract consideration from prospective customers.

"Financial services firms offering products and services for retirement must be perceived as trustworthy, that they conduct their business with the highest ethical standards, and are financially stable. They must also demonstrate that they are well positioned to weather the economic crisis and they care about their customers. Advertisers who promote these messages have the greatest success in the retirement category," stated Kristina Terzieva, Phoenix Product Manager for the study.

The Phoenix study found that Fidelity, Vanguard, and American Funds command the most favorable overall impression among firms well known to investors. Fidelity and Vanguard also receive top brand consideration among affluent investors. Prudential and John Hancock are leaders among the most important criteria used when selecting providers of retirement products.

The Phoenix study also found that 50% of investor households have experienced a moderately negative impact from the recent economic crisis, while 42% had been relatively unharmed or have seen some improvement despite the crisis. Nearly half indicated that they moved from riskier to more conservative investments in the past year, but the proportion who intend to do so in the next six months has dropped significantly (to 17%) and fewer intend to hold steady in their investment positions in the near term, compared with the past year (31% vs. 39%.).

Small community banks and mutual fund firms stand out as the most trustworthy, while credit card companies are viewed with the greatest distrust.

The Phoenix study was conducted among 850 individual investors age 35 to 64 with household income and investable assets (excluding employer-sponsored retirement plans) of at least $100k. Findings were representative of U.S. investors grouped by age and state of residence.

A summary of study is available for purchase from Phoenix. Also reported are detailed evaluations of 13 Print and 19 TV advertisements for 10 leading brands: John Hancock, Lincoln Financial, MassMutual Financial Group, MetLife, Northwestern Mutual, NY Life, Oppenheimer, Pacific Life, Prudential, and The Principal.

"Most successful ads share a number of common strengths observed in recent years by Phoenix. Among them are TV and Print ads from The Principal, Lincoln Financial, Pacific Life, MassMutual, and John Hancock," observed Terzieva.

According to the study, the most effective print ad was for Lincoln Financial, while Pacific Life had the most highly regarded TV ad.

Source: Phoenix Marketing International

CONTACT: Kristina Terzieva, Product Manager/Retirement Services Research, Phoenix Marketing International, +1-508-647-0151, Kristina.Terzieva@Phoenixmi.com

After 24 Years, TCF Stops "Totally Free Checking"

Mark Rodrigues — Sat, 23 Jan 2010 05:48:00 GMT

January 22, 2010/ Minneapolis, MN: Bill Cooper, chairman and chief executive officer of the Midwest-based regional bank, announced Thursday the end of the bank's Totally Free Checking Product, citing new Federal rules that limit overdraft fees as the reason.

Cooper disclosed the change on the same day that TCF reported a 30% drop in fourth-quarter profits, a decline linked to real estate-related loans. Although the bank recorded large increases in deposits and loan growth, Cooper felt the overdraft fee rules would further limit income potential. TCF's more than 1 million totally free checking accounts will now carry a minimum balance requirement to avoid a monthly fee. Cooper refused to disclose details regarding the new fee amount and the minimum balance requirement.

"It's the end of an era," Cooper said in an interview. "We invented totally free checking and everyone copied it. It was a wonderful product. But the regulatory apparatus, misinterpreting what everyone wants, has changed that."

In July, new Federal Reserve regulations will limit how banks charge overdraft fees on ATM and debit card transactions unless customers "opt in" to overdraft protection. For most banks,overdraft fees are a major source of revenue. Many national banks announced plans last year regarding overdraft fees. J.P. Morgan Chase, for example, quietly renamed its Chase Free Checking program Chase Checking, and added a $6 monthly fee.

Many credit TCF with the introduction of free checking in 1986, turning it into a competitive advantage. At the time, some banks charged as much as $20 a month for a checking account. The new product brought a flood of depositors to TCF and other banks soon followed.

Cooper credits former TCF president Bob Evans with introducing the product and considers Free Checking a seminal point in the history of the bank,a key strategy that transformed TCF from a small savings and loan intoa major regional bank. In 1986, TCF had just 35,000 checking accounts.Today, the bank has 1.7 million accounts.

"Everyone in the business world said we were nuts" when the product was introduced, Cooper said. "But we just went at it and marketed it hard, and it became very big."

Source: Star Tribune