Then get ready to pony up some serious online advertising dollars.
According to data compiled by TNS and published in American Banker (pw req’d), financial services firms competing for deposits by offering high-yield savings accounts are spending big bucks online.
Granted, online spending from the big firms doesn’t support just their high-yield savings accounts. But through the first three quarters of 2006, Wamu spent $12.5 million on online ads, Citi chipped in $19.5 million, while HSBC anted up $20 million (47% of their total ad spend).
Big spending isn’t limited to the big banks. Early entrant ING Direct spent $9.4 million, slightly more than the $9.1 million that Emigrant Savings spent. [Point of reference: US Bank, the 10th largest bank in terms of assets, spent $11 million on ads across TV, print, radio, online, and outdoor].
So, there are a few things you may want to consider before jumping in:
- What are you going to tell your existing customers (you know, the ones with today’s low rate accounts)?
- How are you going to reallocate your marketing budget to accommodate the commitment in online advertising it will take to compete with the current market entrants?
- What are you going to do to keep these customers, who are likely to churn through accounts at every movement in the rates?
Please don’t expect some Chief Deposit Officer to come swoop in and save the day. That isn’t going to happen.
p.s. Email me for a white paper on what you can do to increase deposits.