Internet Marketing at Barclay's Bank - Research Paper Example

Introduction Online banking has surged in popularity in the last decade (Gartner, 2009). Given this trend in a new competitive environment, it is significant for bank organizations to identify and achieve the competitive advantage involved in the internet marketing and online-banking. However, the company should be also noted that in order to achieve the market penetration and other expected values from online banking, it need to face various new and often unexpected challenges which are very different from other traditional marketing tools. This paper choose the Barclays Bank to explore the issue of internet marketing, it will firstly brief introduce the company, followed by the examination of Barclays’s internet presences, including its objectives and marketing activities. Then, it will be focused on assessing the advantage of internet compared with other marketing tools. Thirdly, it will try to identify the shortcomings of Barclay’s internet marketing through the comparison with its four main competitors. Finally, the recommendation will be given for the improvement of Barclay’s internet marketing. Case selection Barclays Bank is chosen because it is a typical bank that operates in both domestic and international banking service market, and it provides wide range of products and services from basic retail banking services to asset management and investment banking services. Therefore, it could be a representative case to exploring the issue of internet marketing in various kinds of bank organizations. Barclays is established in 1736, a London-based major global financial services provider which has 48 million customers worldwide and has operations in over 50 countries. It is the world’s 10th largest banking and financial service group (Forbes, 2010). Overview of Barclay’s website It reflects six main objectives of its internet presence. Firstly, it provides basic information of Barclay bank, and the link to the Barclay Plc is provided for the further exploration of the company. Secondly, it provides product and service information. The website clearly directs viewers to four levels of services, including Personal, Premier, Business and Corporate. The products information provided in each four segment page is categorized according to the purpose of banking. In addition, the internet presence is also to promote its products and attract the customers. In each segment page, there are flowing pictures showing the recent promoting products. Fourthly, it is to stimulate communication and interaction between the bank and customers. The websites provides the online inquiry channel and many supporting information such as financing knowledge, advice and workshops, which are aiming to help clients to solve problems, to best use the financing tools and choose the most appropriate fitting products under different situation and requirement. Fifthly, provision of data and information is commonly identified as a function of internet presence (Ruppel et al, 2003). Finally, the online banking provides a new way to conducting transaction in a convenient and effective way, which can enhance transaction volumes. Type of marketing activities There are three main types of marketing activities showed in the Barclay website according to the marketing purpose, they are awareness, acquisition and retention. In terms of awareness, marketing activities such as free online seminars and workshops, other supporting information such as financing knowledge and key issues in business environment , which are all aim to educate people the reason they need the specific products. For the acquisition purpose, it includes most marketing activities. Under each four segment page, most products and service is promoted by either asking the questions or stating the customer’s possible situation which may interest the people in the first place, for instance, under Business Banking page, it has the title of ‘Need a business bank account?’ before stating its selling point. Finally, there are marketing activities for the purpose of customer retention, for example, ‘Barclay’s loyalty mortgages’ under Personal Banking provides better mortgage deals for current account customers. Another example is those Barclays current account customers get twice the chance of winning with Barclays Ticket Office. All these activities aim to positively impact customer loyalty. Advantages and challenges of internet marketing It is significant to assessing the value of internet marketing compared with other marketing tools used by Barclay, including face to face, direct mail, and telemarketing. Value of internet marketing can be assessed by two perspectives of customers and Barclay bank. For customers, internet offers enhanced ability to deal with customers and provides faster and easier transactions (Aladrewani, 2001; Bradley and Stewart, 2003). Secondly, it increases freedom of choice for customers due to the rich information and no pushy sales people (Salomann et al, 2005). Moreover, it is convenient as it reduces the frequency of visiting physical bank and it provides 24*7 customer supports. Furthermore, Barclay offer expanded services online, customers could benefit by accessing to additional and wider selection of services. Finally, internet banking’ cost structure generally allows having additional financial benefit and promotions for internet-only customers (Nath et al, 2001). By the view of Barclay bank, internet marketing involves less workforce, less operational costs and administrative cost (Aladredwani, 2001; Salomann, 2005). In addition, the cost saving is also reflected on the no limits of advertising space and amounts of information presenting. Moreover, it can increase customer base and target desirable demographic segment and unusually profitable customers (Hitt and Frei, 2002). Furthermore, internet marketing can be flexibly adjusted according to the dynamically changing business environment. Finally, the customers targeted by internet marketing could be more valuable than regular customers; they maintain higher asset and liability balance and acquire products at a slightly faster rate (Timewell and Kung, 1999; Hitt and Frei, 2002). Nevertheless, internet marketing also has its limitations compared to other marketing tools. Lack of acceptance is one of the main challenges since internet marketing only appeal to certain segment of customers who has similar sets of characteristics in terms of gender, age, perceived risk, etc. (Aladwani, 2001; Floh and Treiblmaier 2006), and many customers who lack the necessary knowledge and experience will find the internet presence complex and stress feeling (Salomann et al, 2005). Another challenge is lacking of personal contact with customer, which will lose client control and lead to a weak social bonds. Moreover, customers are concerning about issues of security, privacy, usability and reputation, which can affect the trust of financial service website, and the trust can directly affect the relationship commitment(Nath et al, 2001; Treiblmaier 2006; Casaló et al, 2007). Identify Shortcomings After assessing the value of internet marketing, it is important to see whether Barclays has achieved the advantage of internet marketing and has handles the challenges well in the reality. It will be focused on its shortcomings by comparing with its four main competitor’s websites; they are Citigroup, Bank of America, HSBC Holdings and JP Morgan Chase. One of the most obvious advantages that Barclay has is a user-friendly interface, which is a critical basis for internet marketing. However, there are some shortcomings of Barclays. Firstly, it doesn’t have search engine and site map, which is very important for certain kind of customers and new users. Secondly, it is obvious that Barclay doesn’t promote the company as a whole as much as its competitors dose, which is very important for increase new customer base as potential clients might want to know why they should choose Barclay. By contrast, Citigroup has the clear title of ‘why choose Citi’ in the home page. Although the information under the title is also represented somewhere in Barclay, Citigroup has summed them up to attract customer at the first glance. Moreover, Barclay does not have segments promoting (Personal, Premier, Business and Corporate), just specific products and service promoting. By contrast, JP Morgan emphasizes promoting its services as a whole to five different types of customers in the homepage, and in each service type page, JP Morgan has communicated its corporate culture in the specific service areas. Furthermore, Barclay lacks certain type of promoting activities, both HSBC and JP Morgan use videos to confirm the customers, including ‘what our customers are saying’ or ‘what our segment service managers are saying’, which is very attractive and persuasive, and the information expressed by people saying are more enrich. Finally, concerning the issues of privacy and security, Bank of America presents the information in the more obvious place than other financial service companies. Recommendations Concerning the above shortcomings, Barclay can include site map and search engines and add more activity promoting styles, such as videos. More importantly, Barclay should be more focused on selling the company and each four service segments as a whole. Additionally, concerning the challenges that internet marketing facing as discussed above, Barclay should make efforts to improve the levels of consumer trust and commitment. Moreover, Barclay can try to have a persona design or voice design that is responsible for guiding in order to increase the internet technology acceptance. Furthermore, considering the similar characteristics sets of online customers, Barclay should design the promoting activities and content layout more attractive to these particular groups of customers. Finally, customer relationship management techniques can be used in internet marketing to achieve customer satisfaction and increase customer control and loyalty, and thus stimulate future growth. Reference: Aladwani, A.M. (2001) Online banking: a field study of drivers, development challenges, and expectations, International Journal of Information Management Vol. 21 pp.213–225 Bank of America (2010) Available at: [access at Jan 1st, 2011] Barclay (2010) Available at :[access at Dec 26th, 2010] Bradley, L. and Stewart, K. (2003)The Diffusion of Online Banking, Journal of Marketing Management, Volume 19, Numbers 9-10, 1 November 2003 , pp. 1087-1109(23) Casaló, L., Flavián, C., Guinalíu, M. (2007)The role of security, privacy, usability and reputation in the development of online banking, Online Information Review, Vol. 31 Iss: 5, pp.583 – 603 Citigroup (2010) Available at: [access at Jan 1st, 2011] Floh, A. and Treiblmaier, H.( 2006) What Keeps The e-Banking Customer Loyal? A multi-group analysis of the moderating role of consumer characteristics on e-loyalty in the financial service industry. Journal of Electronic Commerce Research, Vol. 7, No.2, 2006 Forbes (2010) The International 500. Available at: [access at Dec 27th, 2010] Gartner Research (2009) Gartner Survey: Number of Consumers in the U.S. and U.K. Using Online Banking Continues to Grow Across Income and Ages. Available at: [access at Dec 27th, 2010] Hitt, L.M. and Frei, F.X.( 2002)Do Better Customers Utilize Electronic Distribution Channels? The Case of PC Banking, Management Science. Vol. 48, No. 6, pp. 732–748 HSBC Holdings (2010) Available at: [access at Jan 1st, 2011] JP Morgan Chase (2010) Available at :< http://www.jpmorgan.com/pages/jpmorgan> [access at Jan 1st, 2011] Nath, R. Schrick, P. and Parzinger, M. (2001) Bankers' Perspectives on Internet Banking. e-Service Journal, Volume 1, N0. 1, pp. 21-36 Ruppel, C., Underwood, Q.L. and Harrington, S.J. (2003)e-Commerce: The Roles of Trust, Security, and Type of e-Commerce Involvement. e-Service Journal, Volume 2, Number 2, Winter 2003, pp. 25-45 Salomann, H., Kolbe, L. and Walter, B. (2005) Self-Services in Customer Relationships: Balancing High-Tech and High-Touch Today and Tomorrow, e-Service Journal, Volume 4, Number 2, Winter 2005, pp. 65-84 Timewell, S. and Kung, Y. (1999) How the Internet Redefines Banking, The Banker 149, pp. 27–31 Read More