Academic journal article ABA Banking Journal

Web Banking- Now in Stage Two

Academic journal article ABA Banking Journal

Web Banking- Now in Stage Two

Article excerpt

Bill Orr, contributing editor of this journal and editor of a newsletter about banking on the Internet. Orr writes from Waterbury Center and can be reached via the Internet at

Marketing theory has long held that the life cycle of any new product tends to follow a predictable pattern. That pattern is the familiar bell curve, segmented into market subgroups. The amplitude of the curve, as shown in the accompanying graph, indicates strength of demand by each group.

A famous corollary of the life cycle theory was laid out in Geoffrey A. Moore's book, Crossing the Chasm. Moore was a pioneering Silicon-Valley marketer who helped guide high-tech products from Intel, Apple, and Genentech through the early phases of their life cycles. His insightful contribution was this: Marketers can't expect to glide smoothly from one phase to the next, picking up momentum as they go. That's because each market segment is separated from the previous segment by a marketing chasm. So marketers must create specific strategies for reaching each new segment-i.e., offer a value proposition compelling enough to energize the new segment.

How do these theories apply to Webbased home banking? Here's our analysis of the five market segments.

Innovators have a core faith that credible new technologies are likely to make good things happen. Like this columnist, they signed up for an account at Security First Network Bank as soon as it opened its virtual doors in the fall of 1995. For innovators, the value proposition is simple: Because it is there.

Early adopters are just a few steps behind innovators. They, too, have an affinity for new technology. Not for its own sake, but because they are quick to believe that Web banking holds the promise of helping them solve some other problems in their business or private lives. We are now in the middle of the early-adopter phase, which will probably last through 1999.

For early adopters, the value proposition is something like You owe it to yourself. Interpretation: As a busy person, you are compelled by your lifestyle (career, family, sanity, etc.) to make the best of every minute. …

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