If you owned an ice cream stand with 20 different flavors, why would you only promote vanilla? That would give consumers the impression you only sell one flavor, right? Or would it whet their appetite for more? And would advertising all the bells and whistles (or sprinkles) run the risk of falling on deaf ears?
Get Them In the Door
Not every consumer is looking for the same thing. When it comes to promoting checking accounts, it’s imperative first to get consumers in the door. Once they’re in, financial institutions can conduct a needs-based discussion about which checking account is right for them.
Free or low-cost checking accounts — the vanilla flavor — attract many consumers to come in the door. Customizing the account to fit individual needs — the different flavors or sprinkles — is what will ultimately make them an account holder.
Do Fees Come With That?
Consumers expect low-cost checking accounts to have associated fees. Most consumers are okay with such fees as long as they can avoid them by keeping a minimum balance or enrolling in direct deposit. Nearly 6 in 10 consumers say such requirements for a checking account are acceptable in order to avoid a fee.
Some requirements and fees, however, are more tolerable than others. Consumers are less likely to pay fees for rewards programs and debit cards. They don’t want to pay fees for inactivity, check images or paper statements. And they don’t want high minimum balances ($1,500) to avoid such fees, either.
What Makes Account Holders Switch?
As I said in a previous blog post, convenience is the strongest factor in choosing a financial institution. In 2014, more consumers (30 percent) identified branch location as most important to their convenience. The next year, however, online and mobile banking were the strongest trending convenience for most consumers (25 percent).
This tells us that while the perception of convenience may be changing, it’s still what’s driving account holders to choose their financial institution. They want fast and easy access to their funds — whether it’s at a brick-and-mortar branch or via their laptop or smartphone.
So while most consumers are okay with fees (as long as they can avoid them), they’re not okay with inconvenience. Whether you offer physical convenience through an extensive ATM or branch network, or offer robust digital and mobile services, you first need to get consumers in the door. Promoting your basic free or low-cost checking account can do that. Once in, you can tell them all about your other flavors and sprinkles — based on their appetite to know more.