Officially launched in May 2000 amidst the glut of online banks, discount brokers, and financial supermarkets, The FinancialCafe.com needed a cost-efficient way to be catch consumers' attention above the noisy marketing campaigns of its already established competitors.
The FinancialCafe.com's marketers knew the word "Free" has always been one of the most powerful tools to gain customer attention. So, company decided to offer absolutely free electronic market orders (with limit orders priced on a sliding scale, $4.95-$14.95.)
To maximize the impact of this free offer, The FinancialCafe.com initially marketed exclusively through its partner FreeShop.com, a consumer destination site famous for free offers from well-known brand names.
At the same time, The FinancialCafe.com also began a full-throttle PR campaign, tying its story into the media hype that was already building about American Express's similar free offers. COO Andrew Koslow explains, "American Express had a free trade platform, then reversed themselves, then allowed 10 free trades. Every time there was an article about free trades, [the press] would mention other brokers, including The FinancialCafe.com.”
Next to keep up the momentum, The FinancialCafe.com tested banners and placed text ads featuring the free offer in about 30-40 different personal finance email newsletters, including Raging Bull and Motley Fool.
Just four months after its launch date, The FinancialCafe.com ranked #20 on the Gomez Internet Broker Scorecard for Fall 2000. The firm is presently ranked #23 for Winter 2001, and #1 for Overall Cost (obviously.) The free offer has worked so well, that The FinancialCafe.com plans to continue it for the indefinite future.
The PR team's efforts to tie the Company's name into the stories journalists were already writing about American Express paid off. The FinancialCafe.com received over a dozen major media mentions, including mentions in the New York Times, Barrons Online and the Wall Street Journal.
Koslow says that the paid advertisements which have pulled the best results for The FinancialCafe.com so far have been text ads in email newsletters, which worked better than banners.
NOTE: The Company plans to become profitable by selling other for-fee financial goods and services to the consumers who've been lured in by its free offer. It will be interesting to see how this classic loss-leader retail marketing tactic will translate to the Web.
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