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Rates Aren’t As Important As You Think

There’s an old adage in financial marketing: “It’s all about the rate.” Recent evidence from two different case studies suggests that’s wrong.

Case Study #1

Take BankWest’s promotion to launch a new savings account, where they tested two versions of their online ads. Both versions of the ad were animated. In the first version, the ad started by introducing a big rate. In the other version, they led with a photo.

Bottom Line: The version of the ad leading with the photo generated three times as many deposits as the version leading with the rate.

Key Question: Have you ever tried testing two versions of your marketing?

Case Study #2

Yesterday, some well-respected voices in the financial industry blogged about a South African bank that conducted an interesting marketing test. One version of the bank’s loan mailer had a man’s photo in it, another version had a woman’s photo.

Bottom Line: The woman’s photo impacted the bank’s male customers about as much as dropping the loan’s interest rate by 4.5%. (Women, it seems, were less impressionable.)

Key Takeaways:

  • With both deposit and loan promotions, there’s a lot more to it than just the rate. Other psychological and emotional factors are at work.
  • Be brave and have the courage to experiment. Financial marketers need to conduct more tests like these.
  • Pay attention to what’s really driving your results, but be prepared to have your assumptions challenged.
  • The next time you do a rate-based promotion, shift your focus from the rate to a photo and see what happens.

Little details can have a huge impact on the bottom line. As one credit union marketer recently pointed out, even something as subtle as a pronoun can make a big difference.

Further Reading:

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  1. Thanks for the link love.

    I think that one of the biggest take-aways for a marketer is that they need to constantly challenge their own preconceptions. Things change and some things change quickly. I have had clients say that they dont want to use bi-racial couples in their marketing, though they were marketing to a very socially liberal market with a huge demo of people in bi-racial relationships. Their reasoning is that it was controversial.

    I love the client, but they couldnt be more wrong. In their area, it is not only common, but almost expected. If you hang out in any of the common areas of town, there are more bi-racial couples than not. The only people who would have found it controversial is a minute group of people who, honestly, probably weren’t very profitable accounts for the CU anyway.

    But it was an old-school preconception that had never been challenged or checked.

    Credit unions need to constantly test the waters. Technology changes, tastes change, needs change. 20 years ago the thought of someone paying $5 for a cup of coffee was too much to believe. Now we stand in line like everyone else to shell out the dough to get our sugar/caffeine fix. Who knew that adding sugar chocolate and milk to coffee would allow you to quadruple the price until someone tried?

    Missed opportunities come in all flavors.

  2. I’ve tested multiple versions of some of the promos we run on our website. For larger promos, photos of faces (esp babies!) generally do well, but for smaller ones, rates beat all. (At least for CTR; I haven’t been able to follow all the way through to results, although I really want to!)

    Of course, on those smaller pieces, the comparison is between a tagline & a rate. Taglines in general just don’t get the clicks. It would be interesting to do 3 versions in that size (rate, tagline, photo) and see where it ends up.

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