Bank of America
Bank of America is one of the largest banks in the US by assets (along with JPMorgan Chase and Citigroup). In 2008, the United States was faced by what is considered by far to be the worst global financial crisis. This economic downturn will result in the collapse of giant financial institutions, hurting in its passage the US economic. Bank of America will suffer the same fate as its financial counterparts due to the size of its business. The ones, who survived through this predictable crisis, will be those who will continuously innovate and market strategically.
Band of America Key Problems and Opportunities Decline in profit caused by the bank credit freeze: This problem affected BofA because it is a large financial institution. When credits are frozen as a bank, activities will be subsequently affected forcing giant institutions to drastically downsize in order to muddle through the issue. In addition, the decline in BofA customers caused by the fact that customers and business are spending less and less compare to 2006 will push the bank to think more customer orientation. These problems have created panic for many firms from 2008 to 2009.
However, opportunities are created when the door to problems opens up. Some opportunities were to focus on reducing or eliminating monthly service fees in order to attract more customers. As a consumer, one major benefit I am constantly looking for is convenience, usability and affordability of services. Credits unions offers low to no monthly services on basic banking services such as checking and saving. In addition, increasing the accessibility to teller was also one possibility and access to more ATM’s without fees or with competitive fees. Alternatives
From this problem, innovation can be one of the best choices out there. Increasing customer reach by providing service that no other offers or by adding niche segments to existing products. Businesses are moving more and more toward digital marketing because customers have become more technology savvy. BofA figures that out fast enough to implement a mobile app platform in order to create convenience for its existing customer and also attract new ones. List of alternatives 1. Online and mobile Banking: this is one way to add value for customer.
By creating this app, Bank of America allow access of the bank to its customers whenever, wherever. Although many banks are doing it, not many have succeeded making this feature useful and unique. The use of high speed internet is required and the use of smart phone is required as well. Making it too complex can create force close and crashes leading to frustration on customers end. 2. Elimination of monthly service fees: This is one reason why many consumers have moved their business to credit unions and 100% online banking such as Ally online banking. However, not all banks are willing to implement this feature. 3.
Financial Award for new customers: some banks offer money to new customers that open a new account for at least 6 month and use their debit card for qualifying transaction. In the six month, the bank will have the chance to provide value adding service that will eventually change temporarily customer into long term customers. These are all solutions BofA can look at but not all of them are feasible so they when with solution number 1. Creating a mobile app for their customers was the best decision ever made by Bank of America. According to the case, Bank of America only spends less than 5% of its overall digital marketing budget.
On the other hand implementing this app, 76 % have of its customer have reported satisfaction using the mobile app. By implementing this feature of their online banking, BofA is certain to reduce cost by cutting down “the number of calls to call center” (6). From my point of view, using solutions 1 and 3 will be very advantageous. 1. Increase in the BofA brand community: by creating a brand community, business goes beyond adding value, they create a love mark that customers can relate to and the relationship between the bank and its customer become stronger and reliable. 2.
By giving financial incentives, the bank will increase its customer’s base thus offering more product and services and increasing revenue. When customers are satisfied, they create a strong: 3. Word of mouth: this reduces the budget on the marketing side because customers will do some of the work for the bank. As a conclusion, I believe using mobile banking was beneficial to bank of America for they reached the result they were hopping to reach and even better. However, I also believe it will have been beneficial to have used other alternatives in order to increase their customer base.