ATM Machines As A Sales Channel
How many times one has deleted that email offering that free gold credit card or a pre-approved loan? How many times one has curtly disconnected the phone call from another tele-caller with a pre-approved check for that awesome holiday in Hawaii? In a market, where retail banks have exhausted almost all the channels to reach the target customers, ATM machines can be a powerful alternative for cross-selling. ATM machines also provide the opportunity to reach out to the otherwise difficult to reach customers such as expats.
So, how would it work? Almost every bank has pre-approved offers for certain customers. The bank can load the offers for some of the pre-approved customers to the server that interacts with the ATM machines. The moment the ATM recognizes a preapproved customer, it can show her the pre-approved offer through a blinker or an additional screen at the end of the transaction. If the customer is willing to go ahead with the offer, all she needs to do is to press “Y”. The moment she presses “Y”, the bank gets notified and can track the lead through different mechanisms. For example, an SMS can go to the sales manager nearest to that ATM with the customer detail, who can take up the matter further.
Surely, it’s not as easy as it sounds. While the technology for such a process is available in the market, it’s still a challenge to implement it. Prediction accuracy is another big challenge.
· It is not feasible to upload the entire set of pre-approved offers to the server. And hence the need for a model, which can forecast with high accuracy the probability of a customer visiting a cash machine.
· Each ATM screen on an average takes 5-7 seconds, which includes the time taken to interact with the server. So, the time to pitch the offers must be chosen judiciously, especially for locations with long customer queues. But restriction of timing will in turn affect the prediction accuracy.
· The ATM cannot close the sell. The completion of the process depends on further integrations of channels.
Nevertheless, ATMs can still be used as an excellent channel and in the near future itself, with the advent of technology, it can be expected to be one of the primary channels.
I am a firm believer in the concept of right-channeling: that there is a right channel for each type of transaction (fastest, easiest, cheapest, etc.)
The ATM is not the right channel for sales messages.
First off, as you mention, customer queue is a consideration. And how, pray tell, will the ATM know if there’s a line of customers waiting to use the machine?
Second, how many people want to lengthen their time at the ATM by pressing Y to accept the offer, especially considering that they’ll have no idea what happens next.
Third, I would strongly recommend to any bank foolish enough to consider doing this that it does some user testing first. I wouldn’t be surprised if a fair number of customers DON’T EVEN NOTICE the message. It’s like banner ads on websites. We’ve become very good at tuning them out.
Fourth, while the bank is conducting its consumer research, it should gauge whether or not its customers actually form a more negative opinion of the bank.
Fifth, I would encourage the bank to make this decision in a broader context. That is, if it cost $1 million to deploy this, is this the best use of that $1 million? I can’t imagine that too many banks could honestly answer yes to that.
Comment by Ron Shevlin — February 13, 2008 @ 2:23 pm
Thanks Ron for your comment and providing another perspective to the discussion.
(1) As you have rightly noticed, we have mentioned this as a challenge till now. ATMs will not know anything. Servers will be populated with the detail of preapproved customers, who will be pitched the offer while they visit the ATM. Now if we have a server with enormous storage space and have connections that are amazingly fast, then ATMs will not have any problem in knowing who is visiting. Till then, we will have to build predictive models trying to maximize the probability of who visits when and load the data of the preapproved customers with maximum probability of visit. Some customers have enough periodicity and leave enough data.
(2) Quite a few. Banks are already pitching offers through SMS, where willing customer press just “Y” for a preapproved personal loan. So, this other channel is worth exploring.
(3) Sure, many wouldn’t notice. But let us not forget, banner ads still work and have established itself as a proper channel
.
(4) We do not think it will leave any negative impact as long as it is not being disruptive to the primary task for which the customer has come to the ATM. We are trying to achive a better use of the time on the machine, instead of using up more time on the machine.
(5) On this we agree. On current scenario, may be you are right. But in a near future scenario, whereas the criticisms are based on the present limitations. Challenges are already noted but the pace, with which memory space is becoming cheaper and the connection speed is rising, will make ATMs a very valid touchpoint to the customers. For instance, within last two years the basic cost of an ATM in India has fallen from $ 50,000 to less than $ 20,000 (and is dropping further).
It may be the “not the right channel for sales messages” now, but that does not stop it to be a “…right channel for sales messages” in near future
.
Comment by Subhrajyoti — February 15, 2008 @ 3:51 am
Well, this has been implemented by Chase. Maybe I’m in a test market, who knows?
I went to a Chase ATM this week. I was pre-approved for a credit card. I said yes and now I am the holder of a signature credit card with great benefits from a prime lender. I was actually thinking of applying for this very same card for a while, so I was ecstatic to see the message that I was approved.
This is a very new practice apparently as nobody at Chase has ever heard of it.
I talked to the branch manager, the credit card support team and the customer service for retail banking. Not one of them knew. Now these are the people on the “front lines”. They know mostly everything about what customers are experiencing and not one of them knew. Somebody, somewhere at Chase made a conscious decision to load pre-approved offers into an ATM. I can’t be the only one.
I’ve spent a good portion of my life dealing with credit cards and I had never heard of this. I did a google search and wound up here. I thought I would share my experience.
Comment by willy woodall — April 2, 2008 @ 10:28 pm
Thanks Willy for sharing your experience here!
It is great to know some Banks actually implementing/ exploring this option. Last week,I have also come across pre-approved offer from ATM and will update about this on a brief post sortly.
In the mean time, request you to continue reading the blogs in this site and share your thoughts on them.
Comment by Subhrajyoti — April 3, 2008 @ 7:34 am
[…] It appears that utilizing ATMs as a sales channel is not even a near future thing as we thought it was, it has already arrived. Last Friday on my way home, I decided to withdraw some cash from an ATM of one of the larger private banks in India. When I was almost done with the transaction and was about to collect the money, there was a surprise waiting for me in the screen! The ATM offered me a reasonable amount of home loan and requested me to click a radio button written “Y” if I want to avail or click a radio button with instruction of reminding me later if I want to think about it later or click “N” in case my answer was an outright no. But then neither am I the only one, nor India the only country where it’s happening. One of our blog readers, a few continents away from my city, has already come across and availed one such offer from Chase! Things surely are fast nowadays! […]
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