Banker with balls

You may have seen Bob Garfield pointing out the new Realtor® TV ad in Advertising Age, attempting to convince people now is still an excellent time to invest in real estate. People have plenty to say about the ad and the industry on Bob’s blog.

I was amazed recently speaking with representatives from a company who is planning on launching a new company with real estate agents doing business the old way. In their opinion no more than maybe 2% of buyers will ever skip working with an agent and use web technology to find and conclude a real estate purchase. Gee, don’t know how many people sell their homes without at least a seller’s agent but counting the “For sale by owner” boards in our neighborhood it seems to be increasing in popularity.

I’ve rented an apartment over the internet, sight unseen, and recently purchased a vehicle on eBay. A friend purchased a $400K+ home over the internet without ever seeing it other than 360 video. No, that is not the average consumer, but plenty of people today are booking their own travel, buying stocks without a broker and trading happily on auction websites.

Sure consumers will be reluctant, but in my mind requires that a) trust be established so people can feel safe concluding deals without an agent, b) access to information, listings and buyer-seller tools to schedule your own showings, determining property value (think KBB in autos - Zillow and Trulia are slowing getting there), etc, and c) an easy can’t-mess-it-up process to handle the paperwork. It’s only a matter of time before all the parts come together and it starts gaining momentum. (Naturally, Realtors® will be quick with their PR and TV ad to point out any disastrous consequences a few consumers may have experienced!).

There are certainly enough people with bad experiences with real estate agents (whether Realtor® affiliated or not) to want a better alternative. And if you ever wondered why there is so little competition amongst agents or it seems like such a club just read this from the ethics code they have: “Realizing that cooperation with other real estate professionals promotes the best interests of those who utilize their services, REALTORS® urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners.”
Good ethics, but also seems to depress any sense of aggressive competition that drives innovation, survival of the fittest and better pricing for consumers.

Posted by Banker with balls at 08:49 PM | Permalink | Comments (0) | TrackBacks (0)

Last week I presented at the Net.Finance Online Innovations conference sharing how ING DIRECT lets customers interact with the brand in fun and innovative ways. It also provided an opportunity to connect and socialize in Life 1.0 with friends and industry contacts. William Azaroff provides a great highlight summary of the conference. If you haven't already checked out any of these sites, they all provide fascinating studies in applying social networks to financial services: Prosper, Wesabe, TradeKing and Zecco (both claim that 10-15% of customers are actively participating in their communities) and Virgin Money.

The week prior I presented at a lunch seminar for the Philadelphia Direct Marketing Association on brand building and direct marketing. Thanks to the large crowd and especially for your generous 4.8 out of 5 rating of my presentation!

One more comment on the Online Innovations conference. A credit union doing a very interesting job with a blog is Verity. It's the first time their blog has come to my attention and Shari Storm shared great information on their experiences of using the blog in the community and even how the blog is resulting in new members. Wow! Some great best practices to take a look at.

Posted by Banker with balls at 10:12 PM | Permalink | Comments (4) | TrackBacks (0)

>>Update: Thanks to Phil and Jim for pointing out that Wachovia doesn't give you $1 - they merely transfer $1 of your OWN money from your checking account to the special savings holding account. So that makes it far less attractive than my initial calculations. Also a good lesson in the importance of carefully reading bank marketing literature to not miss the details! 

So soon we'll see Wachovia breaking a new advertising program for their Way2Save "savings account". The spokesperson says they will make it "fun" for consumers although I miss where the fun part comes in. Similar to credit card rewards, the "fun" is primarily in shopping and then getting a small cut back from those funds.

The program seems quite rich (for first 3 years), paying $1 per debit card transaction or online bill pay, plus additional levels of complexity in limited transfers, changing interest rates and bonus payments. If you assumed no bank fees incurred with Wachovia, by my quick comparison calculations (per month 15 check card transactions, 3 bill pays, no additional deposits vs. 3.15% APY at ING DIRECT) you would need approximately $7,500 in an ING DIRECT Electric Orange account to earn more in interest a year than through your free Wachovia checking account linked up to Way2Save. Naturally there are additional comparisons in terms of ease, functionality, fees, etc. (Instead of using a debit card but a credit card with 1% cash back and paid your bill in full, the avg. balance you would need would be even lower).

Since you are limited to no more than $100 a month in additional deposits, and the account is opened with a $0 balance it really seems to be more of a checking account/check card rewards/cash back program than a "savings account". At the end of 3 years it converts to a regular savings accounts. So a great way to build habit and lock in customers into the use of their checking account. 

For those who already have a checking account with Wachovia and not willing to shop around for a better deal, seems like a no brainer to add this account. Curious to see the advertising! You have to open the account in a branch. A bummer for those who prefer to do their banking online. Let's see how this compares to the success of Bank of America's Keep the Change program. A pity that it takes so much complexity in banking to make something "fun". But hey, anything that will help people save, is a good thing.

Posted by Banker with balls at 07:21 PM | Permalink | Comments (4) | TrackBacks (0)