E*Trade has adopted a new marketing strategy for its popular Web site based on the idea that humans are creatures of habit.

Introduced with much fanfare by a string of TV ads played during the World Series, the jazzy new site emphasizes giving away many tools and functions on an improved Web site distinguished by bundles of information, including new links to other finance-related sites.

The idea: Make potential customers habitually rely on E*Trade's site, turning turn to it for most of their investment information and, eventually, for making their securities trades.

"Clearly, they're trying to differentiate themselves on something other than price," says Bill Burnham, senior research analyst for electronic commerce at Credit Suisse First Boston. "They're trying to turn the Web site into an account acquisition vehicle in and of itself by giving it away, and by making it a place where non-customers feel as comfortable as customers.

The company figures it can capture a good part of the two million people expected to begin using the Web for financial information in the next year. "The hope is that (customers) will start going around the site, get more interested set their portfolio up with us, start using (E*Trade mail) as an e-mail address say 'This is where I want to be" (and) open an account with us, (and) bookmark it," says Lisa Nash, vp of customer management at E*Trade.

The idea of giving most of the site away, she adds, is part of her company's recognition that an e-commerce vendor has a very weak hold on customers.

"With a click, people can go away from your site," says Nash. "You really have to keep engaging them and re-engaging them, and just pushing your brochure down people's throat (doesn't work). People say 'I want what I want now.'"

Making alliances

Previously, about 95 percent of the tools on the site were for members only; now, most of the features, including news, charts and mutual fund information, are free. Customers can execute trades and get access to other resources, like customizable stock alerts, for which they pay fees.

Included on the new site: Links to InsWeb and E-LOAN, both of which are Web sites allowing visitors to put their insurance policy or mortgage applications up for bid by participating originators. Also included are an investing chat room, an application for an E*Trade Visa card, and a market with books, software, and E*Trade merchandise.

The links, especially, are designed to help make E*Trade a so-called "portal" site. Both Insweb and E*Trade view their alliance this way, says Kevin Keegan, Insweb's president of insurance services. InsWeb's site has links to many other sites; it's owned by a consortium of insurance companies that mainly use the site to secure highly-qualified leads they can then pursue. Only one company on that site, Progressive Insurance, actually issues insurance on it.

"E*Trade) is trying to provide services to their consumers, (and) they are a very popular site, and Insweb is trying to get insurance offerings to its consumers, so our needs were well-aligned," says Keegan. He declined to explain InsWeb's deal with E*Trade.

But CSFB's Burnham disagrees with Keegan that the arrangement is mutually beneficial, arguing that most traffic goes from E*Trade to the links, not the other way around. "When you add in InsWeb and E-LOAN and their other arrangements, what they're trying to do is realize as much revenue from each customer as possible," he says. "The traffic from E*Trade to (the linked site) is greater than the traffic from them to E*Trade. Some of E*Trade's other alliances, like their deals with Geocities and Yahoo! are (much more) clearly designed to increase traffic to the site."

The site will remain in flux, says Nash. "There will be something structurally different about (the site) every year" she says.

-A.Reinbach

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