American Banker reported yesterday that Bank of America will launch an online and in-branch advertising campaign called “A little knowledge is a powerful thing” to educate consumers about banking and credit card fees. The article calls the campaign “ironic” since more than half of BofA’s revenue comes from non-interest income. Bruce Hammond, president of BofA’s card services division was quoted as saying:
“Our research shows that if we equip consumers with this account information, they become more empowered to manage their finances and more satisfied with their banking experience.”
My take: This is a bold move — and great marketing — because it demonstrates:
1) Transparency. I’ve argued before that the way to win over financial services customers is by demonstrating customer advocacy (versus worrying about whether or not they advocate for the firm). Transparency — being open about fees and rate structure — is an important component of being an advocate for the customer.
2) The importance of customer engagement. Engagement isn’t about how long someone looks at your ad (sorry, branding folks). It’s about the emotional connection someone has with your brand or firm. BofA’s move will help engage consumers more deeply with managing their financial lives — an important step to becoming engaged with BofA itself.
3) Long-term thinking. Is BofA putting some of its fee revenue at risk? Possibly. But they’re betting that by delivering on points #1 and #2 (transparency and engagement) that it will win out in the long-run. Many industry observers (myself included) have long criticized financial institutions for taking the short-term view towards building profitability. BofA’s move clearly displays long-term, strategic thinking.
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