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Apr 05, 2004
How To

How to Market Financial Services to Older Teens & College Students: Research & Tactics from Bank of America

SUMMARY: After conducting an intensive demographic research effort, Bank of America learned a surprising truth: high school seniors and college students depend on their parents' input more than anyone thought when they pick a financial institution.

In this article, you'll learn how Bank of America applied this insight to create a real-world marketing plan that worked, including training and motivating bank managers to sell to older teens:
"We found that once [teens] are set with a brand, you see the same behavior as with the general population," says Maura Griffin, Senior VP Product Development for Bank of America. “Once they've found a brand they like, they generally stick with it.”

If Bank of America could get college students to sign up for a checking account as freshmen, those students would likely become life-long customers -- but only if the product was a cut above the competition's.

Through syndicated research, focus groups, and a product development survey for a new product, CampusEdge Checking (TM), Griffin's team discovered five key factors about marketing to high school seniors and college students:

-> Factor #1. Teens only *think* they're making decisions on their own

Many students are out on their own for the first time and have never been taught about financial issues, Griffin explains. They want to make decisions on their own, but don't know where to turn for financial guidance.

While students believe they're making decisions for themselves, Griffin’s research revealed, they are actually highly influenced by outside elements. Most often, they choose banks either through the advice of a parent or through campus activities.

Marketing to teens needed to focus on those areas of influence. The team created marketing programs to three different sectors.

a. Teens themselves

Banking centers across the country reached out to teens through senior nights at high schools and on college campuses. They also conducted direct mail to high school seniors. That way, by the time entering college freshmen chose a bank, they may have had up to three touchpoints with Bank of America.

b. Parents

All Bank of America banking centers changed their point of sale messages, beginning in June, to target parents of graduating high school seniors. The message told parents that students choosing CampusEdge Checking would benefit from the parents' relationship with the bank: the students' monthly service fees would be waived while they were in school.

If associates at the banking centers knew that their customers had a student heading off to college, the associate would talk to the parent about the new checking account. A letter was sent to parents as well.

c. College campuses

While most banks in college towns appear on campus during orientation week to sell to students, Bank of America took it a step further, creating the Bank of America on Campus program.

Through this program, universities with a business relationship with the bank are eligible to team up with the bank to offer their students additional benefits, including a monthly service charge waiver while they were attending that university.

-> Factor #2. Parents look at the long-term; teens look at "what I'm spending now"

"Parents have had a lifetime to learn about finances and how to handle their money, but teens usually don’t have any experience at all,” Griffin explains. “That meant that we weren't going to send the same message to the parent and the student."

The marketing message to students focused on the fact that with CampusEdge they could receive free checking for at least six months. If they had direct deposit, it would remain free or. If their parents were Bank of America customers, it would be free for five years (while they were in school).

Plus, Bank of America offered free online banking with free online bill pay, which appeals to this tech-savvy market.

On campus, the bank offered promotional giveaways such as a digital 2-in-1 clock radio.

Messages to parents focused more on informing them about a specific aspect of the product: the "Stuff Happens" ™ card.

"Once a student has been with a bank, one major element of dissatisfaction was the different fees they incur because of pure inexperience," says Griffin. "So we created the Stuff Happens card, which would provide them with a one time refund.” If a student ran into an overdraft fee, for example, the Stuff Happens card would allow the bank to waive the fee.

To redeem the card, students had to come into the banking center and meet with a banking associate, who would talk to the student about the activity that drove the mistake.

“Parents found this aspect of the product particularly reassuring,” Griffin says. “They realized that accidents sometimes happen, particularly when dealing with a lack of education. They were happy that the bank took the time to educate their children.”

-> Factor #3. Continuing ed

In addition to educating students on how to avoid the mistakes they made, which triggered the need to redeem their Stuff Happens card, Bank of America took several other pro-active measures to inform teens.

All students who received a Bank of America Student VisaR Gold credit card also receive a Practical Money Skills for Life CD-rom. This provided students with information on how to use a credit card responsibly.

Also the Bank of America on Campus Program provided the option of an on-campus seminar. This 2-hour seminar provided an overview of how to manage a checking account and credit card effectively. At Spelman College, for example, they actually provided students with college credit for attending the seminar.

“The educational aspect is critical,” says Griffin. “We want students who sign up for one of our accounts to understand how it works and works for them, by building a strong financial future.”

-> Factor #4. Educate sales associates

When selling to teens, as with any other consumer, it's important to keep the message consistent all the way down to the account opening.

Griffin's team identified the top banking centers that had had the best results from selling to students in previous years, then did an in-depth analysis to understand how they were selling and cross-selling the appropriate products to students.

Then, the team created a training package that went to the banking center managers in university towns. The training package included:

--Best practices
For example, "During a matter of a week or two, [banking centers] could have hundreds of new students coming through," Griffin says. “Managers made sure that the centers were optimally staffed to accommodate the increase. We didn’t want students scared away by long lines and waits.”

Several banking centers created a worksheet to make the application process easier. Griffin's team created a worksheet based on those.

--Competitive overview
This covered the products Bank of America's major competitors were offering students. The training package encouraged each banking center to shop the local competition to learn more about their specific student offerings.

The video showed role-playing that helped associates deal with objections. It talked about cross-selling and showed some of the differences between selling to students and selling to their parents.

-> Factor #5. Offer performance incentives to associates

To get all banking center managers involved, Griffin's team came up with two different contests:

o Create a Business Plan
"We ran a contest that asked them to create a business plan based on understanding their competitive environment, the dates they'd be allowed on campus, and how they were going to address each of those," she says.

Banking centers that won the contest received cash and were encouraged to either have a "really good pizza party" or to purchase university jerseys for associates to wear during the back-to-school rush.

o Exceed Your Goals
The banking centers that exceeded their sales goals by the greatest amount received a similar prize.

"This was the first year we extended our marketing beyond just the student centers, to all banking centers where parents might be," Griffin says. "It significantly improved our penetration."
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