Financial Myths Busted

Grad Money Matters blog has busted some long standing myths that stop us from managing our finances better. Some 80+ myths have been listed and debunked on the post. From simple things like, Money = Happiness to I don’t make enough money, so I don’t save to why paying the minimum balance on your credit card does not pay. There are strange theories like, you need a credit card to do online shopping, that you need a lot of money to start investing. And crazy myths like frugal living is cheap living and funny ones like it’s too late to start saving for retirement now… It’s a fun post that throws out a lot of notions that we have about money, and our lives in general. From Grad Money Matters.

A Revolution In Online Money Transfer

The way we transfer money online could change with the launch of Revolution Money, an innovative new payment platform created to transform the payment industry by drastically altering the economics through Internet-based technology. The beauty of the idea is that it also looks at small everyday transactions, like collecting contributions for an office party, or getting a friend to pay his share of the dinner bill. And the big thing going for the company is that it has the backing of some of the world’s banking heavyweights. The whole thing is being fronted by Steve Case, the founder of AOL. Revolution Money introduced its first two flagship offerings – Revolution MoneyExchange, the first free money transfer service that powers online transactions, and RevolutionCard, the industry’s first anonymous, PIN- protected credit card. More in Tech Journal. Also of interest, an online financial comparison site Pertuity.

Impediments To Mobile Payments

A tussle between banks and mobile operators on exactly where the data security component should reside in a mobile phone is threatening to delay the widespread adoption of contactless mobile payments. Mobile phone operators want the security layer to be in the simcard, a device they control, while financial institutions want security mechanisms to reside on NFC (near-field communication) chipsets, which they regard as highly secure. According to ABI Research, without a full agreement, contactless payment based on NFC-equipped phones is likely to remain confined to pilot projects. Further complicating matters is that the cost of NFC chipsets, while declining, remains about twice what handset makers would like to see. More from Digital Transactions

Payment Innovation. Where From?

Digital Money Forum laments the lack of new ideas in the payment business. With banks looking to change the cost/income ratio by both increasing income (perhaps by making riskier investments!!) and becoming more operationally efficient factories for money, what will drive innovation? The story looks at how organisations and not just banks, are having to sacrifice innovation for the sake of operational efficiencies. Even storied organisations like 3M, are struggling to hold on to their tag of being an innovative company after having embraced process like 6Sigma. The story is same with banks, more focus on operations means the short term is terrific but there’s nothing in the pipeline for the longer term. The post talks of a recent initiative from ICICI bank that waves off transaction fees on remittances over $1000, the understanding here is that customers who remit larger sums of money could be long term prospects of the banks other products like credit cards, insurance services and more. So rather than focus on making a quick buck on every transaction, the bank is thinking longterm. Go to the DMF post here.

Going Online To Watch Ads

FOR generations, advertising interrupted the entertainment that people wanted to read, hear or watch. Now, in a turnabout, advertising is increasingly being presented as entertainment — and surprisingly, the idea of all ads, all the time, is gaining some favor. One reason is the proliferation of broadband Internet connections, which make it easier for computer users to watch or download video clips. That is enabling media companies, agencies and advertisers to create websites devoted to commercials and other forms of advertising for amusement, rather than hard-core huckstering. The difference between “watching a commercial on a website and in your living room,” said Michael Jacobs, executive vice president and executive creative director at MRM Worldwide in New York, is that online is “an opt-in audience; you’re choosing to be there.” veryfunnyads.com, a broadband Web site operated by the TBS cable network, has delivered more than 63 million video clip views since its introduction last August. The trend has caught the fancy of advertising’s golden boy, David Droga. In about a month, Mr. Droga plans to test his theory with the trial introduction by Droga5 and its partner, the Publicis Groupe, of a Web site named honeyshed.com. More from New York Times.

Neiman Marcus Gets A Channel

Luxury retail chain Neiman Marcus is celebrating its 100th birthday with a series of four-minute video clips on YouTube. The channel features Richard Marcus, the company’s CEO and top designers talking about their favorite memories and attributes of the company. Like anything online, the series is getting Real Time reviews from website visitors. Some criticize the notion of the video, while others poke fun at the speakers and their statements. AdAge finds the whole thing a bit of a mix up, calling the association “a bit of an odd couple.” Even Neiman executives admit it’s an unorthodox move, but they think there’s a place for their luxury brand on the video-sharing site. “Like with anything, you hear people in meetings say, ‘Did you see the thing on YouTube?’” said Ginger Reeder, VP-corporate communications at the Dallas-based retailer. “And if it starts to permeate our consciousness, we can only assume it’s in our customers’ as well.” Read more from the Promo Magazine.

A Guarantee From Time

There are simply too many options beyond traditional advertising for media owners to set the agenda any more. So in another sign on how the power is shifting away, publishing giant Time Inc. is breaking with long-held conventions of the magazine industry and has agreed to report circulation sales figures in nearly Real Time and give advertisers circulation guarantees for each issue in which they buy an ad. Traditionally, media only provided circulation data to its advertisers twice a year and guaranteed a level of circulation averaged across multiple issues. That standard has looked increasingly brittle as digital media delivered new options for advertisers as well as almost instantaneous results. To live up to its promise, Time Inc. is ordering all its magazines to join Rapid Report, the online service introduced last summer by the Audit Bureau of Circulations. Time Inc.’s sheer size is likely to tilt the landscape irrevocably toward the faster, more precise metrics. And media planning and the marketing fraternity could soon be rejoicing. Read more from MediaWeek.

Changing Habits. Losing Control.

Cammie Dunaway of Yahoo! had an interesting point on how consumers today are consuming and reacting to media messages. Speaking at a round table set up by McKinsey Quarterly, Cammie noted that in a wireless home, the consumption of media increased by three hours a week because people are consuming different kinds of media at the same time. People who are watching television are also instant messaging their friends and looking up contextual stories on the Internet about what they are watching. Like when India won the 20Twenty semi finals on Saturday, some of us logged on to one of Australia’s top newspapers The Age, to read what the Aussie media were saying about India’s victory. Cammie calls this trend hypertasking, where a connected world creates opportunities for the average person to look up things from many angles, some of which marketers have no control over. Like when Yahoo! redesigned its homepage recently, they gave away coupons for a free iced copy. As early as the afternoon of the same day some people had redeemed the Yahoo! offer and posted a video on how enjoyable the whole thing was. Cammie’s worry was what if the interaction these young creators had with Yahoo! was not up to their expectations? A scenario where the video could have had something negative to say about the brand and its promotion. Download the McKinsey Article.

Pricing Is Right

Finextra has this whitepaper from SunTec on the pricing innovation that banks are involved in to get a better share of retail banking. The paper argues that pricing – already the most common criteria consumers use while selecting a financial institution – will become increasingly important as a tool to attract new customers and strengthen the existing relationships. Download the PDF here.

The Real Worth of Customers

In its study, The ‘Wallet-Share’ War: Measuring Customer Value and Profitability, Aberdeen surveyed 280 companies across industries to understand how they approach customer profitability. The findings, unsurprisingly, say that best-in-class companies share the use of analytical and precision marketing tools to measure and increase customer value and profitability. While no “magic bullet” emerged as a way to manage customer value effectively, the study identifies four measurements that when analyzed together show a useful customer picture: customer retention rates, customer turnover/churn, return on marketing investment (ROMI), and customer acquisition costs. More than 7 out of 10 have implemented or are planning to implement solutions to identify and segment high-value customers. This includes customer dashboards, real-time analytics, and both descriptive and predictive statistical modeling. The study mentions Australia Post as an example of a company leveraging customer value metrics. It uses both financial (revenue) and non-financial criteria (mail volume, length of contract, cross-product purchases) to profile and group its top customers. With this insight, the organization offers flexible pricing and personalized messages to its best customers. Senior managers are responsible for the customer experience and customer profitability remains a top executive priority. Read more from 1 to 1 magazine.