Developing the technology for home banking services may have been the easy part The challenge lies now in convincing consumers to use it.

With technology now largely a non-issue in the slow evolution of home banking, it's time for the marketing department to take over. "The biggest hurdle in marketing these services is making it clear what they are and how to use them," says Cynthia Montgomery, marketing vice president in the customer access group at NationsBank Corp.

That is best accomplished in a branch environment, where bank officers can actually demonstrate the product. Problem is, the customers most likely to use home banking products happen to be those customers who also rarely visit the branch.

Selling at the branch is probably easiest for smaller banks, where relationship with customers tend to be more intimate. That's been the experience of The Stat Bank, a $200 million-asset institution in Fenton, MI, which has a strong home banking program that it sold mostly in the branch environment.

Over the past 18 months, The State Bank has managed to convert an astounding 20 of its retail customer base to its voice-response telephone banking and bill payment services. And almost all of those customers were gained through "teaching, encouraging and coaching customers" at the branch, says Carolyn Spicer, senior vice president.

Even large banks agree that the best marketing opportunity occurs at the platform, where they are hustling to sell home banking services when new accounts are opened. "That's where you want to sell them the moon," says Montgomery. Adds Steve Oetkin, marketing manager for SmartPay Inc., a telephone-based bill payment service based in Omaha, NE: "Absolutely the most important clement in acceptance of home banking is the direct sell at the new account desk."

Targeting the Right Market

Beyond that, banks are learning to segment their customer bases into those that are most likely to use such services and target that group with direct marketing. U.S. Bank in Portland, OR, for instance, which offers personal computer-based home banking and telephone-based bill paying, includes those products under the broad umbrella of its UBANK convenience banking services.

Last February, the bank launched a four-pronged attack to promote its home banking and bill payment products, beginning with an image campaign stressing convenience through UBANK services such as ATMs, debit and home banking and bil paying. Later came statement stuffers concerning the home banking program to al deposit and credit card customers. Then, U.S. Bank sent special mailings to computer owners throughout its core market area, to both customers and non-customers, as well as advertising on Prodigy.

In addition, U.S. Bank has begun to decide which locations in its 435-branch, five-state network are the best prospects for home banking, says Linda Parker, vice president and manager of emerging delivery services. "One of the challenge in marketing this product is the training and education of the sales force," sh adds. "Obviously, that would be difficult to do across our entire branch network, so we'll concentrate on those areas where home banking is most likely to be accepted."

Mike Woodward, assistant vice president in retail products at Crestar Bank in Richmond, VA, says "getting to the right people" is a key to home banking's success. "It's not appropriate for everyone. You have to figure out who will be most receptive and then go after those people." Crestar offers a telephone bill payment service and is in a pilot program with Visa and U.S. Order with a scree phone-based bill payment program.

What's clear at this point is that banks are experimenting with marketing efforts to find just the right touch that pushes the consumer's button. Since i began marketing efforts in March, U.S. Bank has signed up some 2,600 customers, says Parker. However, the bank received 15,000 inquiries through a special 800-number used in the campaigns.

"That tells us that customers need a lot of information in their purchase decision," Parker says. "We've got to analyze and determine how to make that decision easier for them."

Oetkin at SmartPay contends there is "a real need to better communicate to the consumer what (home banking) can do for them," and bankers agree. "There's a rising level of awareness of these technologies, but customers still need to know exactly how it can make their lives more convenient," says Woodward at Crestar. "That's going to take some real marketing savvy, some determination by banks to get a clear message across."

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