When sales or profits start to slip—on any account—changes are immediately made to improve things.
Searching for the sweet spot
The goal is to find a winning combination of checking account features that drive both sales and profits.
Selecting which features to offer is the challenge, and it varies with each type of account you offer.
Chances are good, however, that all of the consumer checking accounts you offer will include a mix of these 10 product and marketing features:
1) A memorable name. We like checking account names that incorporate your institution’s name, such as “123 Bank’s Senior Checking Plus” account, as opposed to just calling it Senior Checking. To consumers, the name is easy to understand, plus they know it’s a proprietary account with features only available at your institution.
2) A no-minimum balance requirement. Consumers often associate minimum balance requirement accounts with loss of benefits and fees. This means that even if you put a low $100 minimum balance requirement on your account, some people are going to look elsewhere. So don’t risk it.
3) A killer mobile app. I travel extensively and typically end up using my mobile phone more than my laptop to transfer funds, check rates, and make deposits. And for anyone under the age of 40, a mobile app is pretty much all they use. This means your mobile service needs to be continually updated to be relevant.
For example, can mobile users chat with your reps? Can they quickly find a fee-free ATM, make a remote deposit, open an account online, or apply for an HELOC? If not, you are giving them reasons to bank elsewhere.
4) Hefty cash opening bonuses. Yes, free bonuses are expensive, but what’s a new checking account worth to your institution? Right now cash bonuses are running around $100 in value, with some as high as $300. Of course, the institutions that offer these bonuses also have a hefty list of requirements that must be met before the prospect receives it, which are all designed to make the account more profitable.
5) Flexible requirements to receive a bonus. If you are going to make account requirements, it only makes sense to give people a choice in how they fulfill them. For example, an institution might require the consumer to make a direct deposit into the new checking account within the first 60 days, or complete 10 debit card transactions totaling $500 or more. If they both have a similar impact on account profitability and retention, give new accountholders a choice.
6) A BIG list of no-fee ATMs. Locating the nearest an ATM is one thing. Paying to use it is another. That’s why consumers like many free ATMs to choose from. Today, some institutions even reimburse checking accountholders for ATM fees charged by other institutions. Or, they will automatically credit the accountholder’s account for $5 to $10 each month to help cover these fees. If the customer uses ATMs often, this is a BIG deal.
7) The ability to talk with a real person. Sometimes, all the technology in the world won’t suffice, and accountholders simply want to visit with someone who can answer their questions. A live, actual person, for example. If a checking accountholder at your institution has a question, can they easily find a name and number to call—or a location to visit?
8) Easy access to friendly branches. Right now, it’s almost impossible to watch a YouTube video without seeing Capital One’s ad for its new “cafe” branches. Here’s the thing: We all know that many consumers still appreciate quick and easy access to a branch that’s staffed with friendly people. Ideally, this branch is in their neighborhood or on their way to work. But do they actually want to sit down and drink coffee there? Not so much. However, free dog bones in the drive-through or a chocolate-covered doughnut once in a while is still a good idea!
9) Automatic savings plans. More people are saving today, and this is likely to continue if interest rates keep rising and the economy doesn’t tank. This is why you need to make it easy for your new checking accountholders to also open a savings account, and then automatically transfer a specific amount to it each week or month.
10) Cash back and reward programs. These programs are popular but can also be enormously expensive for the institutions offering them—so keep a careful eye on their ability to reel in new checking accounts that actually churn out profits. Right now, a typical reward program offers 1 percent cash back on purchases up to $3,000 per month.