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A look rebranding: Embrace Home Loans
In December 2009, Advanced Financial Services changed its name and rebranded as Embrace Home Loans. This was a significant move for a company that has been in operation since 1983. Advanced Financial Services used direct mail as its primary marketing channel and in Q4 2009, we began to track the first direct mail offers branded as Embrace Home Loans.
Advanced Financial Services actually remained profitable despite the downturn so, therefore, the rebranding is more about tapping into its potential for future growth. Commenting on the name change in a press release, Kurt Noyce, President of Embrace Home Loans, said, “we now find ourselves in an enviable position with many opportunities for future growth, but our name hasn’t kept pace with that growth. We have not been available in all markets and were easily confused with many other financial services companies. So we decided to make a change with a name that defines not only what we do, but also what we care about.”
The launch includes a new website that promises to “help customers feel comfortable and secure every step of the way.” The site features customer testimonials from the 46 states Embrace operates in, as well as video recordings of staff explaining how they have helped customers.
Most of the offers from Embrace Home Loans in Q4 2009 utilize a black-and-white version of the orange Embrace logo and the same creative that was mailed under the Advanced Financial Services brand.
Some offers, however, reveal a new orange logo and the message, “embrace the possibility.” These offers tap into Embrace’s new values. For example, in one marketing piece, a Post-it note adds a personal touch and the text is customer centric in its focus. The offer explains how Embrace wants to save its customers money because rates are at historically low levels.
The Embrace rebranding follows the launch of the Bank of America Home Loans brand in April 2009. These two firms are currently the top two direct marketers in terms mortgage acquisition mail volume. The rebranding efforts are encouraging because both lenders are re-positioning themselves to take advantage of a potential recovery in the mortgage market.
Q&A about 2010 Financial Services Trends
I spent the weekend crafting answers to the many great questions people sent during and after our “2010 Financial Services Trends” webinar. If you’d still like to check out the presentation slides or watch the webinar recording, click here.
Also, please don’t hesitate to use the comments field below to post more questions or to add to my answers. I’m very eager to hear what you think about our predictions and to get a dialogue started about major financial services trends for this year.
Without further ado… the answers.
Q1: Why do you equate saving with simplification?
This is a continuation of discussion we had in webinars last summer about how consumers are simplifying their lives. The basic premise is that saving money = buying less stuff = simpler lifestyle. Consumers generally save more during recessions, but in this case, it is part of a more general and longer-term trend that encompasses simplification.
Q2: Please expand on how social marketing provides “highly measurable ROI?”
Social and digital media tracking can provide a tremendous amount of behavioral data that can be used to determine ROI (return on investment). In terms of measurability, social marketing compares favorably to other marketing channels, such as TV or direct mail. For example, online data like click trails can show how well the social media strategy is driving visitors to the company website.
Q3: What was presented as a reasonable alternative to traditional banking during your research?
We often use examples in our survey questions, but in this case we didn’t. We simply wanted to measure the degree of consumer dissatisfaction with banks, not the degree of attraction to specific banking alternatives. However, some alternatives we could have mentioned would be accounts at brokerage or mutual fund firms, or perhaps prepaid cards with online bill pay services.
In a survey Mintel conducted in September of 2009, 5% of respondents said they “would leave my current bank if Walmart offered all the same financial services that my bank does”. In this case, Walmart could be considered a bank alternative.
Q4: Can you further explain Blippy? We do not understand the way it works.
Check out their website at http://blippy.com/. The site is basically a social media site that posts financial transactions so that everyone can see what you are buying. You can either designate a primary credit card or you can share your information at Amazon.com or iTunes for instance. People are calling it the “Twitter of personal finance.” This indicates that the trend of all our behavior being shared online is continuing.
Q5: Isn’t P2P lending a legalized version of loan sharking?
It is if the fee structure is exorbitantly high. However, our data indicates that many consumers don’t pay as much attention to fees as one would think. And the convenience of P2P will probably be a draw for a certain portion of consumers.
Q6: You indicated that 29% of people tend to ignore FS companies on social networking sites. How does this compare to other industries?
That’s a very interesting question, and it will certainly be included in our next round of consumer surveys on the subject of social media. Stay tuned!
2010 Financial Services Trends – get the slides here
We had a successful webinar yesterday; thanks to all who attended! Sorry about the sound difficulties at the beginning of the webinar.
Those of you who tuned in submitted tons of great questions about our financial services trend forecasts for this coming year. I’m crafting answers today and this weekend, so I hope to have them up on the blog by Monday. Please of course, feel free to use the comments field here if you’d like to submit more questions about our predictions.
In the meantime, Mintel Comperemedia’s fabulous marketing team has created a link to the webinar recording. You can either listen to it again (or for the first time if you missed it yesterday!) or you can download the slides to peruse at your own leisure. Click here to do so.
Payday lenders get aggressive
The recent PBS Frontline documentary, “The Card Game,” broadcast on November 24th, included a critical report on payday lenders. There are approximately 23,000 payday lender outlets in the US, despite payday lending being illegal in 15 states. As PBS put it: “there are twice as many payday lenders as there are Starbucks, lending out more than $40 billion a year.”
Payday loans are generally used by lower income consumers who have checking accounts. The loans are typically for just a couple of weeks, in advance of a paycheck, and they almost always incur high fees.
From what we’ve seen, email is the most popular channel for payday loan marketing. In fact, the majority of unsecured loan acquisition emails are from payday lenders or third parties looking to connect consumers with lenders.
The FDIC has recently instigated a program encouraging banks to offer short-term, small dollar loans of under $2500 to compete with payday lenders. Do you think this will work? Or do you think payday lenders will continue to bombard consumers with email offers and dominate the market?