No. of Recommendations: 16
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
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, 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, 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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