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Commonwealth Bank: Home seeker
Will Nichols The Communications Council Bronze, Australian Effie Awards, 2011

 

 

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Commonwealth Bank: Home seeker Will Nichols The Communications Council Bronze, Australian Effie Awards, 2011

Commonwealth Bank: Home seeker
Agency: BMF Advertiser: Commonwealth Bank Author: Will Nichols Total Campaign Expenditure: Under $500K

STRATEGIC COMMUNICATIONS CHALLENGE
The Australian home loans market is highly competitive. The big four banks, brokers and smaller lenders ferociously compete for valuable home buyers. Convincing these buyers to speak to the Commonwealth Bank (CBA) and begin the application process is vital to success. However, analysis of the bank's application process showed that 85% of pre-approved customers do not convert to a fully funded home loan within the six month approval period. This was occurring despite the fact that these customers had already gone to the trouble of providing their financial details and speaking with the bank to gain approval. We needed to understand why they weren't converting with us. Three main factors were in play. Competitive market Many potential customers took a loan elsewhere. At the time of the campaign, we were in the middle of 3 continuous months of interest rate increases, rising a total of 0.75%.

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And as the market leader, CBA was usually the first mover, and often the target of the press. “Shortly after today's decision the Commonwealth Bank of Australia raised its variable home loan interest rate, effective from May 7, in line with the RBA s move. Later, Westpac also raised its variable home loan rate” The Australian, 4th May 2011. http://bit.ly/9MSZVG At the campaign launch CBA's rate of 7.11% was not the best rate in market, so this triggered further re-evaluation, and shopping around. Customers applying via 3rd party brokers were also particularly at risk, with many brokers pushing their own agendas. It's not surprising many took a loan with a competitor. A long hard slog Of the remaining, many were still looking for the perfect home. For anyone who has bought a home, they know it's a gruelling process. So much to do, researching the market, sorting finances, and full of highs and lows. The buying process can drag on for months, often passing the six month pre-approval period. We stopped talking Finally, we found that once the pre-approval letter was sent, customers did not receive any further bank communications. They were completely forgotten. It's not surprising that some buyers didn't come back to us.

OBJECTIVES
Home Seeker was a brand new campaign, requiring budgets set aside for testing, so the following objectives were set: l

Increase conversion rates by 10% in all test groups Generate a positive ROMI of at least 50% (the bank hurdle rate for a successful campaign) Learn the most profitable combination of channels and timing

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STRATEGY AND IMPLEMENTATION
Bridging the void
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Our potential customers were part way through one of the biggest decisions in their lives - buying a home. They had gone to all the effort of getting pre-approval from CBA, but the bank was on radio silence for six months. We called this the “Communications Void”. Continuing the relationship analogy, even the Australian Institute of Family Studies, recognises that lack of communication is the number one reason relationships break down. It was not surprising we were losing potential home loan sales. Understanding customer expectations What did our customers expect after pre-approval? Market research consultancy 5th Dimension was commissioned. The results of their study, Makes & Breaks (2009), showed us that customers wanted to be kept informed along the way. And being kept informed was a key driver of the bank exceeding customer expectations for their home loan. Extending the...
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