2016 Marketing Planning: Review/Plan Payments & Digital Channels

Transcription

1 2016 Marketing Planning: Review/Plan Payments & Digital Channels July 2015 Rev. January 2016 Christine Ierano Marketing Planning

2 Exec Summary As the payment world evolves and more options become available, consumers will have more payment choices than they know what to do with. The winner(s) in this space will be those companies that can make consumers lives easier and, in the process, also give them more control over how they spend and manage their money. Robyn Kaiserman, Financial Services Analyst Current state of the environment for the business Payments business is evolving rapidly many big names and non FIs entering market. Consumer adoption is fragmented and confusion is widespread. TD has nine ways to pay and three more wallets launching by the end of 2015 Consumers don't see added value in paying with a smartphone vs. a physical card. Our own customers have been slow to adopt Apple Pay with 103k debit cards and 84k transactions since we launched in December Adoption of alternate digital payment methods is heavily dependent on merchant acceptance, and merchants have been slow to adopt Millennials and the unbanked are most interested in alternative payment products and systems, and least likely to use Bill Pay ~8% of TD Bank customers in this age group that have Online Banking use Bill Pay; 74% of this same group are enrolled for A2A/P2P Converting cash transactions to debit (Small ticket strategy) remains a key opportunity We have seen a YOY rise in small ticket transactions <$15 Big A-ha for current year Confusion in payments industry with the launch of new features and digital payment options. There isn't one issuer who is taking a strong lead in organizing and educating customers on what it all means. Driving additional usage among debit users remains a key focus for the business, but there is also opportunity to move the needle on inactives by honing in on messaging that resonates and testing incentive offers. Focus Areas for 2016 Claim a leadership position in educating and creating clarity in a world full of options Elevate payments and digital capabilities to a convenience story Refine value props so we have a cohesive go to market strategy Drive awareness, adoption and usage of TD products and services 2

3 Payments & Channels SWOT: Build our strengths, address emerging gaps, and capture opportunities Strengths Strong brand attributes the Human Touch Debit Instant Issue Store Network A robust suite of payments products including: Credit, Debit, & Reloadable Prepaid Cards Online P2P Payments Free Bill Pay Next Day Payment Late cutoff 9:59pm Spanish Language site Apple Pay & Visa Checkout (Android Pay soon) Security via Chip cards Weaknesses Operational impacts constraints around launching new products/technologies Technology for account servicing not frictionless Limited functionality on mobile app for Bill Pay No mobile account management for debit/prepaid or A2A/P2P No robust account alert system in place Inability to see Bill Pay customer profiles Availability of same day bill payments Lack of automated fulfillment system limits our ability to offer incentives to customers. Opportunities Channel flexibility enable self service activity via all channels Align technology to build relationships and loyalty with debit and prepaid customers Strategic partnerships Roll out of Instant issue for chip cards (Debit & Credit) in stores (April 2016) Payment option convergence (all options on one tab) Same day bill payment Simplify Bill Pay Onboarding process Mobile Photo Bill Payment Threats Relationship cannibalization from other FIs and non FIs Payment migration to non card rails (ACH) Payment consolidation within merchant wallets (e.g. Starbucks, Dunkin Donuts) Prepaid Card Regulatory Pressure (CFPB) Some competitors offering fee free P2P mobile capability 3

4 2015 in Review: Context CONSUMER INSIGHTS DEBIT & PREPAID Younger consumers (18-24) are big fans of Debit! They believe not only is it the most convenient way to pay, but also a great debt management tool. A bright spot in the industry as more are shifting from cash to Debit for small purchases and using less ACH transactions then other groups. They like prepaid too Once thought of as a product for the unbanked and lower income group, prepaid cards are particularly popular with Millennials. A recent Visa survey reports 40% of those surveyed would consider replacing their bank account with a prepaid card. The percent of TD s Debit transactions that were $15 or less has lagged that of peers, but has been steadily rising. We have seen incremental lift during campaigns. Driving additional usage among debit users is a key focus for the business, but there is also opportunity to move the needle on inactives by honing in on messaging that resonates and testing incentive offers. Although not statistically significant, we saw some movement on inactive debit users with the NFL DM campaign, pointing to an opportunity to explore targeted messaging/incentives further with appropriate tactics/spend levels. PAYMENT SYSTEMS & DIGITAL CHANNELS Payment confusion is widespread the variety of payment options is causing consumer confusion at the point of sale this will continue to increase as more players enter the market. Despite the rapid pace, no one is taking a leading role in helping consumers understand what it all means. Mobile wallets overall are dependent upon merchant acceptance, if they don't catch up, adoption will continue to move slowly.. Both users and non users say they would use it (more) if they felt there was more security. Online banking, online bill pay and e-bill are key predictors of use of other revenue-generating products & services, they take up 33% more services than nonusers. E-bill is one of the strongest, with recipients having an average of 1.3 more services than customers who do not use online banking. However, 1/3 of bill pay users don t know that their FI offers the ability to receive e-bills within their bill payment service. Non users of P2P services, while interested in the service, cite that lack of understanding of how it works and fees are barriers to use. KEY LEARNINGS & IMPLICATIONS Small ticket continues to be an opportunity for the debit business as we lag behind peers in overall. The launch of the TD Connect card resulted in ~40% of the current sales coming from prospects. This presents future opportunity for driving Emerging Mass segment. Our existing customers also took up the product which speaks to the use of the card by the mass banked as a budget management tool. Increased interest in digital financial services presents a wide range of opportunities to deepen relationships, as consumers are interested but lack understanding Our P2P product strategy is under review due to competitive pressures. Sources: Mintel report "Payments October 2014" Lightspeed "Mobile Payments Study December 2014" Visa 1Q15 Consumer Debit Update- July

5 Business Results and Performance Payments Business Financial Objectives Key Measures $ (MM) Plan 2015 YTD (actual) 2016 PLAN Total Debit Net Revenue $118,208,433 $121,412,739 $85,695,392 $132,457,524 A2A/P2p transactions 176,984 1,204, , ,260 Retail Online Banking Transactions 379,900, ,900,000 (Bill Pay 21, 600,000) Mobile Transactions 261,600, ,740,000 Business Trends and Factors Total Debit Revenue: FYTD15 revenue is $5.3 MM above Plan and 8% higher Y/Y Power Score Our Visa Debit Power Score has continually improved compared to same quarter previous years. Avg. PS over last 4Q= 13.35, Peer Group Avg A2A: YTD volume is 530MM, 8.2MM over plan and 9% higher Y/Y; Penetration= 12%, Peer Avg.= 17%. Bill Pay penetration of RIB users = 21%. Peer avg.=33%. TD Connect: YTD sales: Sales through June were 4,136, 6% below forecast Apple Pay: 103k debit cards and 7k credit cards added this month; 84k debit and 8k credit in-store transactions as of 6/22. Mobile Deposit : Share of trans up to 8.1% (all time high). Checks deposited improved 14% m/m, nearly 560k Q1 Q2 Q3 Q Financials as of July MBR Total Power Score = Penetration x Activation x -- measures efficiency (# of transactions) of the bank s overall portfolio. Source: Consumer Debit Products Scorecard. TD Bank s Peer Group: BAC, BB&T, BBVA, M&T, NFCU, PNC, RBS, Regions, TCF,TD, US Bank, Wells Fargo 5

6 Strategic Marketing Plan Budget: $1MM Visa funded allocation for Debit & Prepaid marketing; $310K Channels budget LOB Strategy Marketing Strategy Key Marketing Initiatives Measures Build on successful programs to drive usage and extend campaign where possible; use seasonality to target people at moments of truth (graduation, back to school): Summer Debit or TD Connect Campaign merchandising, digital Ongoing Social for Debit, TD Connect & TD Go and Gift TD Connect Merchandising Bill Pay Turnkey promotion (Fiserv) Drive Penetration, Activation & Drive awareness, adoption and usage of TD products and services Package services and benefits against customer needs and use existing interaction points to serve up relevant messaging Message around no Foreign Transaction fees with, debit, credit, prepaid cards, EMV chip security and foreign currencies available in store - DM to travelers, , RIB ads, merchandising Use targeting based on customer travel related purchases etc. Awareness, Adoption, Bill pay Quick Win Digital Incentives onsite digital, RIB, use a third party vendor to fulfill digital rewards Promote Always on messaging for A2A & P2P ( roll out of 3 day P2P transfer no fee) and on site digital 6

7 Strategic Marketing Plan Budget: $1MM Visa funded allocation for Debit & Prepaid marketing; $310K Channels budget LOB Strategy Marketing Strategy Key Marketing Initiatives Measures Support new payments and digital banking services Android Pay/MS Pay/Samsung Pay digital & social - social and onsite digital Enhance Capabilities & Loyalty to Drive Top of Wallet Position Elevate payments and digital capabilities to a convenience story Provide Marketing support for NPG Updates Tactics TBD Claim a leadership position in payments category helping consumers understand what it all means. Decide our point of view and develop a narrative internally and to the market Top of Wallet, Increase in digital solutions services Continue to build digital services into mass campaigns to support convenience position and modernize the brand (e.g.. Mobile Deposit) 7

8 Strategic Marketing Plan Budget: $1MM Visa funded allocation for Debit & Prepaid marketing; $310K Channels budget LOB Strategy Marketing Strategy Key Marketing Initiatives Measures Driving adoption and deepening engagement for our digital solutions Reduce friction in self service channels Pick one Digital Service and build the proactive offering and educating of that service into our DNA Bring clarity to the category by creating a messaging strategy and educating consumers and employees on the different payment options look for ways to build employee advocacy Weave message through existing touch points and create opportunities where appropriate (internal comm., training & incentives) Utilize existing customer touch points and insight to proactively share relevant features and services. (Opportunity spot: customer depositing a check, inform about RDC) Build Adoption the TD way. For those who want convenience but are not tech savvy, we have a human to help (wow goes digital) Employee usage Digital Service Adoption Digital Service 8

9 Strategic Marketing Plan 2016 Marketing Calendar: Payments/Channels Initiative Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Visa Summer Olympic Promotion Travel card targeted campaign Mobile Wallet Support Summer Debit Campaign 2016 NFL Visa Promotion Ongoing social Debit, Prepaid Bill Pay digital campaign NPG/Mobile app launch Ongoing Payments Convenience Messaging Payments Convenience Messaging Strategy Work Value Proposition/Whitespace strategy work Bill Pay Quick Win Incentive campaign TD Connect LCD/ATM Turbo Tax onsite digital 9

10 Strategic Marketing Plan 2016 Marketing Roadmap: Payments/Channels F16 Marketing Expense Forecast by Tactic TACTIC DETAILS TACTIC TIMING Strategy Initiative Name Tactic Total Budget Comments Q1 Q2 Q3 Q4 Visa Summer Olympic Promotion Merchandising, Digital, Social 10,000 Visa funded EMV/Travel targeted campaign (Debit/Credit Card) Merchandising DM/ , Targeted RIB 175,000 Visa funded Summer Debit (or TD Connect) Campaign Merchandising, Digital, Social, Statement Inserts 230,000 Visa funded 2016 NFL Visa Promotion Merchandising, Digital, Social, Experiential $250,000 Visa funded Ongoing social for Debit, Prepaid TD Connect Merchandising Social 765,000 Visa funded LCD/ATM 10,000 Visa funded Awareness Mobile Wallet launches Digital, Social 400,000 Project funded Awareness Ongoing Payments Convenience messaging CAPA, Digital, Targeted RIB n/a Awareness Strategy work on Payments and Product Whitespace n/a n/a 10

11 Strategic Marketing Plan 2016 Marketing Roadmap: Payments/Channels F16 Marketing Expense Forecast by Tactic TACTIC DETAILS TACTIC TIMING Strategy Initiative Name Tactic Total Budget Comments Q1 Q2 Q3 Q4 Bill Pay digital campaign Digital, Targeted RIB $50,000 Marketing funded; TBD timing based on performance of last campaign Mobile App (NGP) Update marketing support Digital, Mobile, collateral 100,000 Project funded Bill Pay Quick Win Customer Incentive Campaign Digital, Targeted RIB, 100,000 Marketing funded Mobile Deposit merchandising - Wow Goes Digital Support Digital, Targeted RIB, Pop Up Park/various tactics 60,000 Marketing funded Awareness Turbo Tax Affinity partnership promotion Digital 0 LOB funded 11

12 Strategic Marketing Plan- Unfunded Budget: Unfunded LOB Strategy Marketing Strategy Key Marketing Initiatives Measures TD Connect Targeted Direct Marketing Using primary research and HH level data enhancement, we can indicate high propensity for pre-paid card acquisition/usage and target our efforts accordingly Estimated cost: $250,000-$450,000 contingent on universe size Drive Penetration, Activation & Drive awareness, adoption and usage of TD products and services TD Connect Content Strategy financial literacy platform Explore the development of a community microsite to support ongoing prospect and cardholder engagement Estimated cost: $115,000+ Awareness, Adoption, Targeted Spend and Get Debit Campaign Message by segment and incent customers via and/or RIB to use their card x times to get an incentive ($5 digital download or account credit) Digital CTA would be to register the card in order to participate Estimated cost: Downloads ($25,000), $35,000 12

13 Debit Segment Profiles Heavy Debit Users Medium Debit Users Light Debit Users Monthly transactions Demographics Female 59% Avg. age 43 Avg. HHI $73,000 Married 63% Children under 18 41% College educated 38% Employed Full time 61% Messaging Recommendation if targeting is available (no targeting was done in 2015) 2015 Spend n/a 2016 Proposed n/a All Debit Cardholders (including non users) Messaging Suggest new ways to use e.g. last minute bill payments, taxes etc. Female 54% Avg. age 45 Avg. HHI $75,000 Married 55% Children under 18 30% College educated 38% Employed full time 55% Female 54% Avg. age 44 Avg. HHI $70,000 Married 53% Children under 18 28% College educated 32% Employed Full time 53% Suggest new places to use, small ticket focus + security Female 55% Avg. age 44 Avg. HHI $69,000 Married 50% Children under 18 25% College educated 34% Employed Full time 50% Education on benefits and ways to use + security Use your TD Bank Visa Debit Card to pay for just about anything, no matter how small Spend $700, Proposed $775,000 13

14 US Consumer Reloadable Segment Profiles Underserved Emerging Mass Banked Emerging Mass Mass Banked Parents Product TD Connect TD Go Profile 54MM consumers nationally comprise a multicultural, proud community bound by common attitudes. Money is the primary source of stress in their lives, yet they are optimistic about the future. Gaining access to their money is critical, and they value more options to take care of basics like bill payment and shopping. They place trust in family and friends and endorse through word of mouth. HH Income of $50 - $75k 30MM consumers nationally, this segment is comprised of married, dual income, home owning consumers that have not quite reached their peak earning years. Highly sophisticated financially, they own debit cards, credit cards and investment accounts. They are very financially responsible, work hard to avoid debt and strongly desire tools to control spending. HH Income of $69k avg Spend* $365,000 $110,000 $100, Proposed $100,000 $50,000 $50,000 Target parent segments of 18.9MM US teens ages These are mass market consumers demographically, and share a desire to more conveniently fund their teens, with the peace of mid that comes form spending visibility and overspending prevention. HH Income $50K $99K+ *spend is higher due to the launch of TD Connect 14