Internet Marketing Strategies Shift to Education

By Monahan, Julie | American Banker, February 5, 2001 | Go to article overview

Internet Marketing Strategies Shift to Education


Monahan, Julie, American Banker


When it comes to selling investment products, banks keep trying to get the message out that retail investors should come to them first.

And big-spending discount brokers - both online and off - keep drowning out the message despite decades of marketing initiatives stressing to consumers that banks are the ones to trust with their all their investable assets.

Banks are hoping the Internet, combined with recent stock market gyrations, can help change that.

"People are finding out for the first time in eight years that the market doesn't always go straight up," said Mark Willis, president of Irwin Union Securities Inc., a subsidiary of Irwin Union Bank and Trust Co. in Columbus, Ind.

For now the emphasis is on the soft sell. Banks are shaping their cyberspace marketing strategies largely to boost their customers' investment knowledge base, while leaving plenty of room for the expertise of advisers reached offline.

Ken Kehrer, president of the consulting firm Kenneth Kehrer Associates in Princeton, N.J., said this approach makes sense. Banks have more success when they use the Web to support offline sales rather than leave it to customers to do transactions themselves, he said.

"The biggest advance in the use of the Web is in using it to facilitate business rather than for direct-to-consumer activities," Mr. Kehrer said.

Most institutions are holding off for now on offering the ability to conduct transactions, the exceptions including Wingspanbank.com, which offers stock trades at $9.95 apiece. These institutions' Web sites are similar to popular medical Web sites in that consumers use them as a starting point to seek out help from a live professional in other communications channels.

"We spend a lot of time coaching and educating clients," Irwin Union's Mr. Willis said. "We don't want to open that portfolio up to compromise."

Maintaining the role of a live adviser pays off when markets get volatile.

"We find that the customers we've educated up-front are not panicking," Mr. Willis said. "That' s difficult to do through a technology touch."

Bankers say their conservatism is one of their strengths in promoting investment products and services, and that they aren't about to let the wild Web undermine that. People bombarded with information from thousands of Internet investment sites are looking for a trustworthy source to help them make sense of what they learn, these bankers say.

Mr. Willis says the customer in a dual-income family who works an eight- or 10-hour day doesn't want to spend hours doing research on the Internet at home.

"There's a class of clients who are becoming affluent and seeing the value of paying an adviser rather than doing it themselves," he said.

When service is emphasized over sales, Mr. Kehrer said, communication is better. For example, customers and bank representatives can check account status online or use the Internet to review a financial plan together instead of waiting for e-mails or telephone calls to coincide.

Such ease of access overcomes what Mr. Kehrer called one of the biggest problems in financial services: legacy-based data. "I see the Internet as being more of an assistance to advisers than to the individual," he said.

PNC Advisers, the wealth management arm of Pittsburgh's PNC Financial Services Group Inc., says its wants to use its Web site to make established relationships stronger. Customers can easily access the names, telephone numbers, and e-mail addresses of individual PNC advisers through the company's Web site, which hosts password-protected customer mailboxes that can be used to store confidential, proprietary PNC research as well as account data.

"Ultimately what we're building is an expert-advice site," said Brian Burns, senior vice president of PNC Advisers.

PNC says it isn't worried that customers will take the information and run to a discount brokers such as E-Trade. …

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