Monday, March 22, 2010
Should Fifth Third Bank Really “Fire” Customers?
I read that Fifth Third
Bank has recently instituted a policy by which a customer may be charged a $19 fee if they go a year without a charge on their
MasterCard or Visa account. I’m certain that as that news became public Fifth Third was lambasted
in the press, television news, and in the Social Media.
12:05 pm edt
Before we start jumping all over the bank’s management, let’s take a look at what might
be happening here. In reality, if executed properly, this could be very smart marketing. After all, there
are costs associated with maintaining an inactive credit card account, and we are all continually being reminded that to succeed
we need to retain and nurture our profitable customers and jettison our unprofitable customers.
Third is not a client of ours, but if they were I would recommend a few ideas. First, don’t think
of this as an opportunity to generate revenue in the short term. Second use the policy carefully.
If a customer isn’t using the credit card but does have a checking account, savings account (with some established
minimum balance), a mortgage or some other personal or business loan, then don’t apply the fee to their account even
if they never use the card. Next, do send statements to charge other inactives, but be sure to remind the
customers of your customer service number. Most importantly, if a customer calls to question the fee, remove
the charge. At the same time explain that the fee will come up again in the coming year and that if they
really aren’t going to use the account, suggest that they close it so they won’t be charged at that time (when
the fee might not be waived). Keep it upbeat and helpful.
At the same time we always remind clients that if they
“fire” the unprofitable customers they take a risk of generating horrendous volumes of negative word of mouth.
Similarly having customers walk away really mad could be just as bad. But that all doesn’t
have to happen.
Friday, March 12, 2010
Twitter offers it all – It’s big, fast, inexpensive
Marketers seem to have fallen in love with Twitter.
When you think about it, what’s not to love? The “space” costs nothing.
It may take a while to learn how to get the most out of 140 characters, but then again no art direction is required.
The opportunity to monitor what customers are thinking and saying to one another looks fabulous.
4:15 pm est
There has come news in the past few weeks however, that suggests that while
it’s not going away, Twitter may also not quite be a silver bullet. Yes, growth has been nothing
short of phenomenal. There are at last count some 50 million accounts and a reported 50 million tweets
per day. But:
1) A whopping 73% of those 50 million Twitter accounts have tweeted
fewer than 10 times according to a new report from Barracuda Networks.
2) Only 21% of Twitter account holders were
what Barracuda defines as "true users" (meaning someone who has at least 10 followers, follows at least 10 people
and has tweeted at least 10 times.)
3) According to Paris-based
Semoicast, only about 50% of Twitter traffic today is in English (down from 66% in the first half of 2009, and expected to
continue trending down in the future).4) While there is some evidence that Twitter messages are leading to increased consumer behavior, participation
seems to involve events and promotional offers, or be focused on recommendations for “entertainment” and “dining
None of this means Twitter shouldn’t be counted on
as a part of a marketing campaign, but despite all they hype it would be a mistake to count on the
monitoring of Twitter to deliver a truly representative and objective picture of what your customers are thinking and communicating
to others about your brand. A more balanced measure of both Public Social Media and Private Social Media
is essential to understand the market and to drive communications strategy.