Are ATMs the new marketing vehicle for banks?

As phone and online banking, as well as ATMs, increasingly allows customers to bypass the traditional retail bank branch, how will the retail banks grow their business when their most important customers refuse to walk through the door?

According to the 2006 World Retail Banking Report by Capgemini, banks need to design a more sustainable marketing formula. One solution the report highlights is something the consultancy terms “Inbound Customer Marketing,” a practice where a product or service is only offered after a customer has initiated the contact. The goal is to tailor the message to a targeted customer-base as a way of cutting through the noise of all the other marketing messages that people are bombarded with every day.

The approach is also partially a reaction to concerns that response rates to current advertising messages are dropping.

The concept isn’t revolutionary. Boiled down, it resembles the foot-in-the-door sales approach: once a sales person has been invited in, the potential customer is more likely to listen to the pitch and buy-in to the product. Still, Capgemini says this approach would be particularly useful to call centres, in the branches and even online.

Capgemini also sees the retail banks shifting their marketing messages on to ATMs, the channel most frequently used by their customers. According to survey’s conducted for the World Banking Report, 47% of banks believe it is very likely that marketing based around a clients profile will appear on ATMs, while 40% say the notion is at least somewhat likely.

Currently, only about 10% of the banks interviewed in the survey said they have implemented this type of marketing approach on their ATMs. The challenge will be developing a succinct message since most people simply get their cash from the ATM and move on, especially when they have a line of people standing behind them.

“We don’t necessarily see ATMs being an advisor. We don’t necessarily see a call centre being an advisory component,” says Steven Luckie, financial services leader for Capgemini Canada. “It’s a matter of being able to present that in a multi-channel facet.”

For this to work it means sharing client information across all bank channels, right down to how many kids a client has. Ultimately, computer systems will be able to analyze a customer’s profile and tailor pitches to suit their needs.

“I think the next evolution is going to be on the predictive side of things and the only way you can garner predictive is if you have as much information about life events as possible,” says Luckie. “That’s where it’s heading.”

Aside from keeping tabs on how many kids clients have, where they live, what they do, and how much they make, banks will also monitor how they interact with the call centre and what they ask. “It’s not just a matter of knowing where they’ve been or where they are today, you need to know where they are going to go.”

Filed by Mark Brown, Advisor.ca, mark.brown@advisor.rogers.com

(05/26/06)