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5: Web: More than 10 Years Old and Still Broken

In terms of banking online, the Web has become an essential part of the business, but very little has been done to take advantage of the channel because it's been viewed primarily as a cost-savings mechanism on which certain functions have been offloaded, rather than approached as a service-delivery channel.

From conversations in the industry, the author has the sense banks feel that they have "tried the Web" and found it to be unsatisfactory. It isn't getting enough attention from customers, and the revenue generated through the channel is insufficient to justify capital investment. This becomes a vicious circle - refusing to provide fuel to a stove because it's not presently giving off heat.

There are five "mechanisms" that affect the generation of online revenue:

  1. Offering the right product mix: given that customer preference for channel is based on product, you must offer the products online that customers seek in that channel.
  2. Ensuring that customers are aware of the services you offer and that prospects can find your site on the Internet and the products on your site.
  3. Ensuring that your site is usable. According to research by Forrester, some 43% of online purchase attempts fail and customers who were interested in buying are turned away by poor design.
  4. "Value/exchange content scoring," meaning that the content you place on the site is relevant and generates revenue or cost-savings.
  5. Using the site as a medium to sell additional products to existing customers, rather than merely servicing existing ones.

The author concedes that volumes can (and have) been written on each of these specific topics, and that the present chapter is merely an overview that will not go into detail.

The Right Mix

Simply stated: certain products are not going to "work" on the Web, in the sense that a sufficient number of users will not choose to use this channel for all products.

The author mentions the three "C"s that drive customers to adopt a channel: Convenience is a primary motivation for going online (going online is much more convenient that visiting a physical location during specific hours). Control is another factor (the customer wants to control the experience, rather than being herded by the company). Reduced complexity is the third (an online process is often very simple).

Culture also plays a factor. The author contrasts the kinds of banking products that people in three countries (India, Singapore, Hong Kong, and the UAE) seek to obtain and service online, and while there are some similarities, there are also stark differences.

The author also mentions regulation. Financial services are heavily regulated, and it may not be possible at all to provision certain products online, or regulatory requirements may add so high a degree of complexity to the process that it is unacceptable to the customer (difficult process) or the company (increased risk, possible noncompliance issues).

The author divides the customer-product relationship in terms of three phases: the pre-purchase process (information gathering and product selection), the purchase process (applying and obtaining), and the post-purchase process (maintaining) - suggesting that a product it may be possible for some, but not all, of these tasks to be supported by the online channel.

There's also the matter of complexity: credit cards and checking accounts are very simple products, but mortgages and life insurance are more complex products. For all three products, the online channel can easily support pre-purchase activities. For complex products, one or both of the later phases may not be appealing in the same channel. For example, a given customer may research a mortgage online, seek to purchase it at a branch office, and then want to make online payments.

(EN: The author's discussion, while good, seems to omit the most critical element - the customer himself. Largely, familiarity with the medium and the product will have a great deal of influence. A person who has never had an auto loan, or never bought one online, may be reluctant to purchase online, whereas another person who has experience with both loads and the online medium will not think twice. In that sense, I would reject the categorical suggestion that a given product won't work - merely that it won't work for specific market segments.)

Findability

The author explains a bit about search engines, and then notes that recent research indicates that 55% of purchases online are made by customers refereed by search engines (only 16% from advertising, and 30% from "other" sources) - so making sure that your site can be found is critical.

The author differentiates between search engine marketing (paying for placement or ads) and search engine optimization (modifying site content to get placement in "regular" listing) - obviously, the latter is more effective, longer lasting, and less expensive. However, it's a long-term effort that does not have an immediate effect - search engine marketing is more effective for a short-term campaign.

(EN: there's much more to this topic - but it's worth noting here that it takes very little effort to enable a customer who's searching for your company by name to find it, but a lot more effort to get a prominent listing for more general-interest terms, such as "credit card," and the latter are of greater promotional value.)

Usability

Usability has a very specific meaning: whether the user of a site is capable (physically and cognitively) of completing a given task online.

This is more critical on the Web than in any other channel, because the effort to switch is much lower - i.e., a customer can go to another Web site within seconds, as opposed to driving to another bank's office or finding a different ATM. As such, if the customer encounters any difficulty with your web site, he will leave promptly.

Web usability focuses on specific tasks and channels, but should also be considered in the context of the entire customer experience, through all phases of product experience (shopping, buying, owning) . For example, if your site provides good product information but requires the customer to print an application and take it to a branch, it is less usable than a competitor who provides an online application process - and if the customer is aware of this, you will lost them, even though the Web site experience is entirely usable.

The author provides a fair amount of detail about usability studies - laboratory experiments, ethnography, and monitoring site activity (EN: good information, but nothing revolutionary).

The author also advocates involving the customer in the design process, by means of market research, review panels, prototype testing, and even direct participation in the creative process.

Value Exchange

Within an organization, management has a number of ideas about the value of the Web site to the organization. The trouble is, the things that are important to the company insiders seldom coincide with the things that are valuable to the customers and prospects whom they want to visit the site - without whose attention, interest, and participation the site will not succeed.

Another issue is that the company Web site is a property that everyone in the company seeks to own, and have redesigned for their purposes. As such, sties are often designed to appeal to journalists, investors, retailers, prospective e employees, and a plethora of other interests when, in reality, the vast majority of visitors are retail customers seeking product information.

The principle of the "value exchange" is the value you provide to Web site visitors in exchange for the time they invest in visiting it. Said another way: if the site provides no value to the visitor, they will not visit. Ideally, it is win-win: the company gets some value from the customers (their business, their loyalty, their advocacy) in exchange for serving their needs.

However, not all visitors are created equal: when there are conflicting needs among different kinds of visitors, the company benefits from serving those customers who provide the greatest value to the company, even if they are a smaller in number. For example, if the company generates 70% of its profits from 10% of its customer base (the high-net-worth customer), it would make sense to tailor the site to their needs.

(EN: This is similar in principle to the service model, where your "regular" customers who contribute the greatest lifetime value to your business are given preferential treatment over the occasional drop-in customer, even those who might make a very large purchase that day, because the latter are of lesser value to the business.)

The author mentions the notion of a "brand portal site" that serves as a gateway to all, but within a single click of the home page, the experience is tailored to the needs of a specific customer. (EN: This is also called a "corporate site", and is more common in consumer goods marketing where the parent company is different from the brand - Proctor & Gamble's Web site is a corporate site, but its consumer brands have sites that are more geared to the customer. In financial services, the trend seems to be for the company and brand to be one mark, so I'm not sure this approach works).

The customer-focused Web site is more typical, in that the majority of the site is sales and marketing for prospects, a login that takes customers to maintenance interfaces, and a few links in a low-visibility location for journalists, investors, job-seekers, and the like. The core of this approach is simple: customers first.

Content Scoring

(EN: I'm not taking notes on this section because this is outlines very bad approach to site design. It begins with making an inventory of the content and rearranging it. The reason this is a rotten practice is it assumes you already have the content right, which is seldom the case. The better approach is to begin with audience analysis, determine their needs and interests, and then identifying what content would serve those needs - which would include developing new content if none is available to serve those needs, and discarding current content that doesn't serve any purpose.)

Cross-Sell to Existing Customers

The author asserts that the greatest potential for increased revenue, which is largely overlooked by current banking Web sites, is the ability to cross-sell to existing customers. While a site gets some traffic from prospects, the vast majority of users go directly to "log in" to view and manage their existing accounts - and many banks fail to capitalize on their attention. The servicing interfaces are bare-bones and functional, and make no effort to sell additional product to current customers.

The problem should be simple to address: not only do you have their attention, sometimes on a daily basis, and not only do you already have their trust to the level taht they are willing to do business with you, but you also have in your databases all the information you should need to be able to identify customers who could benefit from a product, as well as the information you should need to pre-qualify them for an offer.

The author returns to the notion of offer management: you should not use a random banner approach, but tailor your offers to the specific customer. For example, if your web site offers a product to someone who already owns it, it sends a message: that you don't know your customer, or don't care.

The author mentions the phenomenon of "banner blindness," in which Web users are so accustomed to seeing advertising that they no longer pay attention to any Web content that resembles an ad in design or placement on the page. While advertisers have experimented with changing the format (a banner, a button, a vertical banner, etc.), it's only successful for a little while before people recognize the format and stop paying attention.

It's also noted that other attention-grabbing formats have been experimented with: animated ads, video ads, click-through pages, pop-up windows, pop-under windows, and so on. None have been effective for long, as customers will ignore them, avoid them, or even disable them (software is made to block pop-ups or eliminate graphics in sizes that are typical for ads). Or if you get their attention, they are annoyed at the interruption and do not have a favorable impression. You may get a trickle of sales, but give far more users a negative brand experience.

(EN: it all seems like bad news for advertising - but my sense is that it underscores the need for innovation in customer messaging. There is no "magic bullet" to grab attention in the online medium, and anything that works today will be old hat tomorrow, so you will need to look beyond the standard solutions to find what is effective at getting attention, and probably change it up often.)

Internet Channel Improvement

The author provides the usual list of "initiatives" that largely echo what's been said in the remainder of the chapter ... but there appear to be a few "fresh" items this time, so I'll preserve it:

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