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Author: SusanV1 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 24252  
Subject: Dear PCBanker.com (Mark) Date: 5/26/2001 1:08 PM
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Dear Mark,

I understand the need to change policies and programs at PCBanker to remain profitable and a viable ongoing business concern.

In light of the Fed rate cuts, the necessity for American Bank to remain profitable and to answer to shareholders, you have announced upcoming policy changes.

Borrowing (cutting and pasting) liberally from other posts here and at Gomez, I would like to convince you to look at some different ways of achieving the same goal.

1. We all love the current PCBanker.com.
Many of us have brought in other people by word of mouth. PCBanker has achieved what few businesses do. You have a cult following. PCBanker dominates the OLB board here and at Gomez OLB boards. Like financialcafe.com, USAA (insurance), Costco and Starbucks (in the early years), and other companies, you have created a corps of people who love the business institution and actively market for you by word of mouth.

Don't jeopardize the loyalty of your corps followers. Many are already feeling disenfranchised from your announcement. One of the biggest PCBanker fans on the Gomez board posted, “I feel "slapped in the face" I made PCbanker my "home" and now I don't feel welcome anymore!!! I keep over $1000 in my account; the increase in minimum balance doesn't directly affect me. But the five other customers I've convinced to sign on with American Bank?

I doubt that they have 1000 spare dollars lying around in their checking accounts. Now I feel awful, having held their hands to sign on this "amazing" bank's dotted line...only to have to stare at my toe in the dirt and apologize that, "none of us saw this one coming."

2. Examine other ways to change the policies

A. Set up different “classes” of bank customers.

The Eaton Vance mutual fund I have charges me the same management fee they charged me when I joined. New classes of investors who came after 1997 pay more. Many banks already do this. They have employee “packages,” and different terms for members of different affinity group affiliates. We are in the Charter Member affiliate.

As a (apparent) former Navy poster stated, “As a Plank Holder (Navy term for first crew to occupy a ship) in AB, I want the terms I signed up for. Go ahead and institute new requirements, but just put them on the new members. Other banks have done it, my HMO does it, and my golf club does it...

First it engenders a sense of loyalty and specialness in the "Charter Members" (to steal the term from ATT Universal), which will help make them less likely to leave.

Second, it seems less like a bait and switch tactic -- you are keeping the faith with the Charter Members, the ones who helped put PCBanker on the map.

B. At least give current PCBanker customers “grandfathered status” in instituting the terms in a more customer friendly manner.

Go ahead and put the new requirements on new customers.

I like the suggestion of increasing customers (who are customers by a certain date of record) minimums by $100 a year up to $500.00.

C. Cut in other areas or in other ways.

-Get rid of promo (TMF, Gomez) bennies. The real thing that brings in customers is rates, service, and word of mouth.

-Reduce the number of ATM rebates or tier them.

-Charge a much higher amount to open the account. Undoubtedly the higher the entry requirement, the higher the average balance will end up. VirtualBank now requires $5000.00 to open a checking account. A year ago it was $100.00, but they still have no minimum to earn interest or avoid fees - and they are making money.
So VirtualBank made a move for the same goal and didn't disenfranchise the current customers.

3. Customer Stickiness is important in banking.

As you know, it costs money to open and close accounts. Your announced policies may end up being more profitable implementing some of the aforementioned suggestions. And those accounts that do not presently generate profit will Grow over time – or the grandfathered requirements will allow more to stay and grow over time.

Many of us have already had the OLB runaround. We've been thru Compubank, Citi f/I, x.com and others. It's a time consuming process to switch banks and bill paying and all the associated tasks. We've spent a lot of time moving our accounts to PCBanker. Don't make changes that dramatic now. Increasing the minimum requirement by 1000% is excessive.

Don't jeopardize the loyalty of your corps followers. Again, change terms for newcomers, but keep the loyalty and cult following of the present group.

Thanks, Susan

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Author: zskii Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7307 of 24252
Subject: Re: Dear PCBanker.com (Mark) Date: 5/26/2001 1:20 PM
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I'd agree with all you said, except to reiterate that USAA is much more than property & casualty insurance, with a good chunk of their business taking place in their bank, life insurance, and brokerage subsidiaries. When it comes to their target market (military & dependents) they eat the competition (including pcbanker) alive. Why? Service. It's that simple.

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Author: aditya Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7310 of 24252
Subject: Re: Dear PCBanker.com (Mark) Date: 5/26/2001 1:33 PM
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I am mot really fond of military institutions.

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Author: zskii Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7315 of 24252
Subject: Re: Dear PCBanker.com (Mark) Date: 5/26/2001 2:45 PM
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I am mot really fond of military institutions.

Exactly how is this relevant to the services provided by a business? Apparently you read too much into these posts. USAA markets to and is owned by military personnel, but is not affiliated with the US government.

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Author: mrvilla One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7327 of 24252
Subject: Re: Dear PCBanker.com (Mark) Date: 5/26/2001 6:12 PM
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<<...it seems less like a bait and switch tactic -- you are keeping the faith with the Charter Members...>>


Yes Mark, maintaining a profitable operation while ACTING IN AND KEEPING GOOD FAITH is absolutely key.

Your presence on this board has bought you much in the way of good faith.

I think you need to step up to the plate for all current customers who will have difficulty with this.


<<The Eaton Vance mutual fund I have charges me the same management fee they charged me when I joined. New classes of investors who came after 1997 pay more. Many banks already do this. They have employee “packages,” and different terms for members of different affinity group affiliates. We are in the Charter Member affiliate.>>

I love this concept. And if you are operating on the assumption that the new requirements will not decrease net revenue, this makes sense. You could remain the cult hero for all of us OLBers.

And, yes, many years ago I worked at a bank named Equitable Bank, and we had at least 5 different account types (employee, high rollers, senior citizens, a former banks customers we bought, and university students).

People do like being in special clubs. Being in the PCBanker Charter Member Club sounds pretty good to me.


Take Care


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Author: dmede Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7347 of 24252
Subject: Re: Dear PCBanker.com (Mark) Date: 5/27/2001 12:01 PM
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Mark,

Well, I'm personally still trying to figure out what I think of all these changes. For me, the changes are not that consequential. I guess I'd rather see you stay in business with a lower rate and higher fees than go out of business with a higher rate and lower fees. You're not running a community service organization; you're running a for-profit banking institution and I respect that. I feel sorry for those who are going to be chased away from pcbanker by the changes, but I'm not really sure what the alternative is (again, what's the point of high interest rate / low fees if the bank goes out of business?). Pcbanker still is preferable to any B&M back of which I am aware.

I also do not think you are guilty of "bait-and-switch" with regard to current customers. Banks change rates and fees all the times, and they reservet the right to do so in the fine print. HOWEVER, I do think you face a "bait-and-switch" issue with NEW customers. Say, Joe Q. Public signs up for an account with pcbanker this week thinking that he's going to get certain rates and fees. Meanwhile, he's unaware that the CEO has announced on message boards, but not on his own site, that things are going to change in September. I'd be pretty upset if I were Joe Q. Public. Perhaps, in the interest of full disclosure, you should update the account info on the pcbanker website to reflect changes that you've announced here. I know that this might chase away new business, but I guess this is the catch-22 of making announcements on message boards.

-dmede

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Author: UKBankerBoy Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7351 of 24252
Subject: Re: Dear PCBanker.com (Mark) Date: 5/27/2001 12:25 PM
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I also do not think you are guilty of "bait-and-switch" with regard to current customers.

Mark made several comments in the past regarding the tiered interest being lower over $10K than below. He stated that the smaller accounts was what PCBanker was targeting. Having a $1000 minimum seems to negate that comment.

UKBB

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Author: dmede Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7354 of 24252
Subject: Re: Dear PCBanker.com (Mark) Date: 5/27/2001 12:43 PM
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OK. So, Mark may have been disingenuous about targeting smaller customers. But, I still don't see how this is a bait-and-switch. Banks reserve the right to change rates and fees. We all should know that when we open an account with any bank. To me, that seems to obviate the charge of bait-and-switch (except, as I noted in my previous post, with regard to new customers who are not made aware of an impending change that has been announced elsewhere). I think pcbanker is open to the charge of being dishonest, but bait-and-switch is a serious charge (with serious legal implications).

-dmede

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