Bankinter is a small independent national bank, positioning itself as an innovative, multichannel, low-cost financial services provider. The bank uses various customer acquisition networks and distribution channels (brick-and-mortar branch, virtual banking and agents, telephone, internet). The firm realized that the Internet is a low-cost channel suitable for a smaller bank like itself, and launched its online site, e-bankinter. com in 1997, which ranked as the best online financial site in Spain. The Internet branch of the bank is called Branch 8700. In 2001, the Internet was the main source of entry of new consumers, so it was important part of the customer acquisition strategy of the firm.
The Internet acquisition strategy of Bankinter was based on three channels: alliances, e-collaborators and 8700. I prepared a table to describe the advantages and disadvantages of the alliances and e-collaborators acquisition strategies. As from the table can be seen, the e-collaborator strategy was much more efficient in terms of acquiring new customers and it resulted in lower acquisition costs, so Bankinter decided to terminate the alliances with the portals and focused on e-collaborators.
High trafficked portals
High traffic sites
Difficult to copy by competitors (customer-based CRM-system)
Lower acquisition costs
Higher number of new customers
Co-branding (brand was hidden, adaptation)
Replication of systems
Creation and maintenance costs
Customer acquisition costs (promotion, advertising, fee/each customer acquired)
Up-front annual fee
Ease to copy by competitors
Sites regardless of content
High number of nonformalized customers
Number of new customers/year
2000: ~5, 000 clients
2001: 2, 096 clients
2001: 43, 433 clients
1st table: Pros and cons of the different Internet acquisition strategies of Bankinter
The following table shows the performance of the three online channels in terms of new customers. The Branch 8700 acquires the most customers, followed by e-collaborators and alliances. The nonformalization rate is the highest in case of e-collaborators (76%, 33, 003 clients). The acquisition rate is not only the highest in case of 8700 but this option has the lowest nonformalization rate (47%), as well.
Formalized clients (active)
2nd table: Customer acquisition rate of the different acquisition strategies and channels at Bankinter
2) Which channel (8700, alliances, e-collaborators) performs better for the bank, and why?
To analyze the performance of the three online channels, I computed the customer lifetime value for each channel. The excel tables containing the detailed analysis can be found in the Appendix. Due to the lack of information on interest rates, I used a 10 % interest rate in all scenarios to make the calculations transparent and the results easily comparable. I used two decimals at the calculations, except for the retention rates, where I used rounded numbers. When calculating the retention rates I used the first year’s retention rate as a base to calculate each year’s retention rate. I assumed a short-term and long-term period to show the results: 5 years’ and 10 years’ period – also because at some scenarios the expected years in bank exceeds the 5 years period. By adding the first five years’ discounted values (including year 0 with the acquisition cost), or by adding the first ten years’ discounted values we arrive at the customer lifetime value.
Based on the customer lifetime value, the 8700 is the best performing channel, because in this case the profitable clients have the highest customer lifetime value among the three scenarios. However, the customer lifetime value of the nonprofitable clients is also the highest in case of 8700, which means the highest costs. As there are only slight differences among the customer lifetime values of the nonprofitable clients of the three channels, it is less important. I mentioned in the previous part that the rate of the nonformalized and formalized customers is the best in case of 8700 (47% to 53%). Based on these calculations the 8700 is the best performing channel. E-collaborators is the second best option, as it has the second biggest customer lifetime value in case of profitable clients.
3) What (acquisition) strategy would you recommend to Bankinter? What actions should be taken by Ana Peralta?
Bankinter is a multichannel bank known as the leader in online banking in its respective country. As both the traditional brick-and-mortar and online channels are essential for the bank, it should keep both focusing on the Internet branch. The brick-and-mortar channel still plays an important part, because of customer loyalty and cross-selling opportunities, as well as the high number of branch transactions (36% – Exhibit 5). However, Bankinter could persuade customers to reduce the branch transactions and use Internet banking instead; it would result in lower transaction costs for the bank.
Focusing on the Internet branch is also important because in 2001 it is the main source of entry, which means that it is an acquisition strategy of great relevance. Moreover, the Internet marketing campaign of the bank was successful, as the acquisition costs dropped and the number of new customers increased exponentially. I would suggest continuing the campaign, however changing some elements.
Bankinter should focus on 8700 customers as their customer lifetime value is the highest. Among 8700 customers e-brokers and e-mortgage customers are the most valuable; Bankinter could try cross-selling to them. As for the other customers, finding new ways through introducing new services and attractive packages can help them turn into profitable clients.
Drop alliances (as Bankinter did), and use e-collaborators instead. The problem with e-collaborators is the high number of nonformalized customers and the fact that the rate of the new customer acquisition strategy was correlated to the amount of incentives offered. By using the CRM system of the bank, it can recognize which marketing segments are the most valuable, and it enables the bank to use targeting. By using targeting in the e-collaborators channel Bankinter can attract more valuable customers. Finding the appropriate target groups also reduces the drawback of incentives.
Bankinter should also find out what factors are behind the high number of nonformalization by conducting surveys, analyzing information on the nonformalized customers and the process itself. This way, they can introduce new services or alter their registration process.