The Acquisition Strategy Of Bankinter Marketing Essay

The Acquisition St turn of eventsgy Of Bankinter Marketing EssayBankinter is a small independent national rely, positioning itself as an innovative, multi transpose, cheap financial services provider. The bank uses various node attainment networks and distribution rail lines (brick-and-mortar outgrowth, virtual banking and agents, telephone, internet). The firm realized that the Internet is a low-cost channel sui display board for a smaller bank like itself, and launched its online site, e-bankinter.com in 1997, which ranked as the best online financial site in Spain. The Internet branch of the bank is called Branch 8700. In 2001, the Internet was the main source of entry of new consumers, so it was important part of the customer skill strategy of the firm.The Internet acquisition strategy of Bankinter was based on three channels alliances, e-collaborators and 8700. I prepared a table to describe the advantages and disadvantages of the alliances and e-collaborators acquisitio n strategies. As from the table stand be seen, the e-collaborator strategy was much more efficient in terms of acquiring new customers and it resulted in lower acquisition cost, so Bankinter decided to terminate the alliances with the portals and rivet on e-collaborators.AlliancesE-collaboratorsProsHigh trafficked portalsCo-brandingHigh traffic sitesDifficult to copy by competitors (customer-based CRM-system)Lower acquisition costsHigher number of new customersConsCo-branding (brand was hidden, adaptation)High costsReplication of systemsCreation and maintenance costsCustomer acquisition costs (promotion, advertising, fee/ separately customer acquired)Up-front annual feeEase to copy by competitorsSites regardless of contentNo targetingHigh number of nonformalized customersNumber of new customers/ course of instruction2000 5,000 clients2001 2,096 clients2001 43,433 clients1st table Pros and cons of the different Internet acquisition strategies of BankinterThe following table shows t he performance of the three online channels in terms of new customers. The Branch 8700 acquires the most customers, followed by e-collaborators and alliances. The nonformalization rate is the highest in case of e-collaborators (76%, 33,003 clients). The acquisition rate is non only the highest in case of 8700 but this option has the lowest nonformalization rate (47%), as well.8700AlliancesE-collaboratorsTotal clients68,1752,09643,433Formalized clients (active)35,8591,01510,430Nonformalized clients32,3161,08133,0032nd table Customer acquisition rate of the different acquisition strategies and channels at Bankinter2) Which channel (8700, alliances, e-collaborators) performs better for the bank, and why?To analyze the performance of the three online channels, I computed the customer sprightliness value for each channel. The excel tables containing the detailed analysis can be found in the Appendix. Due to the lack of information on interest rates, I used a 10 % interest rate in all sc enarios to make the calculations transparent and the results easily comparable. I used two decimals at the calculations, except for the retention rates, where I used rounded numbers. When calculating the retention rates I used the first years retention rate as a base to encipher each years retention rate. I assumed a short-term and long-term gunpoint to show the results 5 years and 10 years period excessively because at some scenarios the expected years in bank exceeds the 5 years period. By adding the first five years discounted values (including year 0 with the acquisition cost), or by adding the first ten years discounted values we arrive at the customer lifetime value.Based on the customer lifetime value, the 8700 is the best performing channel, because in this case the profitable clients have the highest customer lifetime value among the three scenarios. However, the customer lifetime value of the nonprofitable clients is also the highest in case of 8700, which means the hi ghest costs. As there are only slight differences among the customer lifetime values of the nonprofitable clients of the three channels, it is less important. I mentioned in the previous part that the rate of the nonformalized and formalized customers is the best in case of 8700 (47% to 53%). Based on these calculations the 8700 is the best performing channel. E-collaborators is the second best option, as it has the second biggest customer lifetime value in case of profitable clients.3) What (acquisition) strategy would you recommend to Bankinter? What actions should be taken by Ana Peralta?Bankinter is a multichannel bank cognize as the leader in online banking in its respective country. As both the traditional brick-and-mortar and online channels are essential for the bank, it should keep both focusing on the Internet branch. The brick-and-mortar channel still plays an important part, because of customer loyalty and cross-selling opportunities, as well as the high number of branc h transactions (36% Exhibit 5). However, Bankinter could post customers to reduce the branch transactions and use Internet banking instead it would result in lower transaction costs for the bank.Focusing on the Internet branch is also important because in 2001 it is the main source of entry, which means that it is an acquisition strategy of great relevance. Moreover, the Internet marketing campaign of the bank was successful, as the acquisition costs dropped and the number of new customers increased exponentially. I would suggest continuing the campaign, however changing some elements.Bankinter should focus on 8700 customers as their customer lifetime value is the highest. Among 8700 customers e-brokers and e-mortgage customers are the most valuable Bankinter could try cross-selling to them. As for the other customers, finding new ways through introducing new services and attractive packages can help them turn into profitable clients.Drop alliances (as Bankinter did), and use e-co llaborators instead. The problem with e-collaborators is the high number of nonformalized customers and the fact that the rate of the new customer acquisition strategy was jibe to the amount of incentives offered. By using the CRM system of the bank, it can recognize which marketing segments are the most valuable, and it enables the bank to use targeting. By using targeting in the e-collaborators channel Bankinter can attract more valuable customers. Finding the appropriate target groups also reduces the drawback of incentives.Bankinter should also find out what factors are behind the high number of nonformalization by conducting surveys, analyzing information on the nonformalized customers and the process itself. This way, they can introduce new services or alter their registration process.