Reader Question Two

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We've seen the reporting in The Journal about expanded functionality and been contacted by numerous ATM vendors, and have a CRM solution, but we question your panel on how legitimate a sales channel an ATM can really be?

Zandy Reinshagen, Symitar Systems

This is really more of a marketing question than a technology question, but I'll be happy to throw in my two cents.

Frankly, I'm skeptical about multi-purpose ATMs for a couple of reasons. Let's look to the Internet for an example. Amazon has arguably done well as an online bookstore because that's what they started as and that's what they're known for.

On the other hand, I don't believe they've done nearly as well trying to be an online hardware store. When somebody needs a power drill, Amazon probably won't be the first retailer that comes to his or her mind.

I think the same goes for ATMs. Sure, maybe it's physically possible to dispense event tickets from an ATM. However, it's hard for me to picture anyone saying, "Gee, I'd like to go to a Mavericks game next week. I'd better swing by the ATM and pick up some tickets."

That brings me to a second point. ATMs were designed to provide convenience to members in an "express" environment. How many times have you been frustrated waiting at an ATM for someone who couldn't figure out how to get $20 out of the machine? Now imagine that same person trying to select seats at American Airlines Center for that Mavericks game.

Maybe the market will prove me wrong, but as I said, I'm skeptical.

Kristi Lowell, Re:Member Data Systems

On a limited basis, ATMs can be a legitimate sales channel when used to support your institution's overall marketing campaign. Targeted messages that do not increase the time required to perform a transaction can be an effective way to educate non-members about the benefits of joining your credit union and can support cross-selling initiatives aimed at current members. Recognizing that consumers still use ATMs primarily as a quick delivery channel for withdrawing or depositing funds, messages should not interrupt the flow of a transaction or cause the consumer to spend more time in front of the machine.

John Schooler, USERS, Valley Forge, Penn.

We, too, are hearing a great deal about expanded functionality on ATMs. While there appears to be a lot of excitement from the ATM vendor community, we have not yet seen much interest from the financial institutions. Since ATMs represent a significant investment and deployment is expensive and complex, it is likely that the more advanced machines will appear slowly as older machines are phased out. All credit unions are facing the challenge of finding new ways to market over the variety of self-service and alternative delivery channels that have become so popular over the past few years, especially as many members are using the traditional branch less frequently. Undoubtedly, this will be true for ATMs along with home banking, call centers, auto dealerships, and other channels.

John Edwards, XP Systems, Moorpark, Calif.

The ATM clearly has the potential to be a legitimate sales channel. The real value provided, both to the member and the institution, however, depends greatly upon the implementation.

The ATM can be successfully leveraged as a sales channel. Its value, though, relies on the ability to customize interactions to reflect real member preferences and interests, plus its level of integration with a larger CRM strategy. There are very expensive CRM solutions geared towards the ATM channel that add little value to the cardholder interaction, so price is not the determining factor. The most basic form of sales delivery at the ATM is the familiar static market message. All cardholders see the same message-the impact is no greater than any billboard, poster or brochure in public view. An intermediate level of sales delivery is a conditional form of cross selling where a targeted message is presented according to your pre-defined criteria.

This type of message may even prompt the cardholder to indicate his interest in follow up materials.

A more meaningful form of sales delivery is integrated with the cardholder interaction. XP Systems is incorporating this into our CAT(Controller for Automated Tellers) NT system. The screen presentation, options available and responses solicited are based upon cardholder defined preferences or prior patterns of activity. This is similar to the Internet model of identifying sales opportunities based upon interactions and preferences gathered over time.

The ATM is no less suitable to this form of sales delivery than the Web. As credit unions replace and upgrade their ATMs for compliance with new guidelines, the opportunity exists to re-fashion the ATM as a true sales delivery channel.

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