Category: Profitability

Business Models, Profitability

Community ROI – a sensible view

Colin Henderson

Will Pate and colleagues have put together a good summary, researched online, of metrics that could be developed into something. I think the term ROI is a stretch for some of these items, and have said so before, but the concept of new metrics to respond to this space is highly valid.

Some examples that I liked:

– Community users remain customers 50% longer than non-community users. (AT&T, 2002)
– Community users spend 54% more than non-community users (EBay, 2006)
– 56% percent of online community members log in once a day or more (Annenberg, 2007)
– Customers report good experiences in forums more than twice as often as they do via calls or mail. (Jupiter, 2006)

For the full list, go to Wills post here. Continue reading Community ROI – a sensible view

Profitability, Web/Tech

Maybe Microsoft is changing, but, maybe we are the problem?

Colin Henderson

 This comment late in the article is refreshingly positive about Microsoft.  Its a positive step that they are suggesting a break from old methods that date back many years.  I have sat through requirements sessions that listened to people indicating a need to retain access to Microsoft Mail files.  Folks … time to cut the cord.  The corporate costs are in the billions, when you factor in what Microsoft must do to maintain backward compatibility, not to mention the gyrations your Bank must go through, its just not worth it.  Save those old emails as text for legal storage, and move … Continue reading Maybe Microsoft is changing, but, maybe we are the problem?

Business Models, Profitability

NatWest is taken to court over bank fees

Colin Henderson

 The matter of Bank service charges, or fees, is being attacked on the consumer fairness front in the UK.  Although the real cost to banks of bounced payments and exceeded overdraft limits is only around £2.50, controversial charges of up to £39 can be levied on consumers. Over the past few months, thousands of people have threatened their banks with legal action if they refuse to refund money taken in charges. But the banks have always succeeded in settling before claims could reach courts. The Office of Fair Trading was due to rule on the matter last month, but delayed … Continue reading NatWest is taken to court over bank fees

Profitability1 Comment

Banks’ use fees for customer behaviour modification | Cap Gemini

Colin Henderson

Cap Gemini have a 2007 review of Banks fees.  Please note that its co-sponsored by ING, the no fee Bank. The average fee is €77 but the thing that stands out as it did in previous reports, is the North American picture.  North Americans pay through the nose for banking – no doubt there.  Asia is cheapest, and Europe has the narrowest distribution (least competition?).  Hat tip to Chris Skinner for this one.  Full report is here. But as usual the devil is in the details.  In terms of homogeneity, five countries have the least differentiation: Austria          6% UK                5% … Continue reading Banks’ use fees for customer behaviour modification | Cap Gemini

Profitability

£2500 per seat per month – the price of customer service…

Colin Henderson

 Some good stats from contactcentrelink.com.  They above estimate per seat includes salary, technology, and support.  That number does not surprise me in the slightest, and in fact might be low.  In Canada we used a rule of thumb of $75 – $100K per seat. What is more worrisome is the effectiveness of the investment, which they describe here.  40% of agents time is involved in non-customer facing activity.  This is is partly because of follow up on customer questions, but he next question, is whether expensive and highly trained call centre folks are the right ones to be be performing those … Continue reading £2500 per seat per month – the price of customer service…

Profitability

BMO eliminates broker mortgages

Colin Henderson

 BMO follows through on something that makes good sense.  This move eliminates internal competition for the same mortgage product, and allows the bank to focus on optimising the process for acquiring mortgages, once.  Previously, broker mortgages were understood to comprise a significant percentage of all mortgages acquired. The bank is no longer buying third-party mortgages and in the past month it decided to stop using mortgage brokers, Frank Techar, the bank’s head of Canadian personal and commercial banking, said at a conference. Bank of Montreal said it will stop using brokers because their business, although profitable, brings in the lowest spread, … Continue reading BMO eliminates broker mortgages

Business Models, Profitability1 Comment

America’s subprime lenders create a domino effect problem amongst lenders

Colin Henderson

 Some background on the subprime lender problem in the US. The trouble started with New Century, which had become the nation’s second biggest lender to would-be homeowners with dodgy credit histories or little cash for a down payment. Last month New Century said it would be restating its earnings, triggering investigations into how it has accounted for its bad loans. Lenders have not only cut off all credit lines, many also demanded accelerated repayment of outstanding loans—which New Century says it cannot make. If the rest of its lenders demand their money back New Century will be on the hook … Continue reading America’s subprime lenders create a domino effect problem amongst lenders

Profitability

Apple stores get the last laugh – (37signals)

Colin Henderson

Sales per square foot in Manhattan.   Apple blows the doors off traditional retailing. Saks, whose flagship is down the street, generates sales of $362 per square foot a year. Best Buy (Charts) stores turn $930 – tops for electronics retailers – while Tiffany & Co. (Charts) takes in $2,666. Audrey Hepburn liked Tiffany’s for breakfast. But at $4,032, Apple is eating everyone’s lunch. Source: Apple stores get the last laugh – (37signals)   Technorati tags: sales+metrics, Apple Continue reading Apple stores get the last laugh – (37signals)

Profitability

Congressional Hearing on Credit Card Fees & Practices

Colin Henderson

Canadian Banks are under government fire for ATM fees.  Now US Banks are getting pressure on credit card fees.  The U.S. Senate Permanent Subcommittee on Investigations, chaired by Carl Levin (D-MI), has scheduled a hearing for Wednesday, March 7, 2007, on “Credit Card Practices: Fees, Interest Rates, and Grace Periods”. Source: Banking Law Prof Blog: Congressional Hearing on Credit Card Fees & Practices   Technorati tags: bank+fees Continue reading Congressional Hearing on Credit Card Fees & Practices

Profitability7 Comments

How should Canadian Banks respond to the Government pressure on ATM fees?

Colin Henderson

 I have had the job of creating the response to this type of criticism.  Its an easy response to make – we own the ATM’s, we can charge other Banks customers, but we don’t charge our own, ATM’s are horribly expensive costing $100’s of millions for a 2 – 3 thousand ATM network. If the banks gave up, or reduced, ATM fees, maybe implicitly Ottawa is saying, ‘We might look more favourably on you as an industry if you come to us looking for changes in the Bank Act,’ ” he said. Source: Canadian Banks & Insurance But all those … Continue reading How should Canadian Banks respond to the Government pressure on ATM fees?