ACTON Press Release — ACTON Marketing LLC

Press Releases

May 18, 2010

Automatically Opted Out Accounts Could Lead to 5% Debit Card, Account Attrition Nationwide

Survey finds non-response to Reg E Opt-In forms will likely be largest cause of fee loss, and will likely lead to overall debit card account attrition

Lincoln, NE — Findings of a nationwide survey of U.S. Banking customers show there are more than just overdraft fees at risk due to the Regulation E opt-in process to be completed this summer. The study found that 37% of the nation's debit card users have overdrawn their accounts in the past year. A significant number of these overdraft program users habitually toss information sent to them by their bank or credit union. When asked what they will likely do to their bank's Opt-In form, 30% of the overdraft users in America said they will most likely round-file the form.

Brian Beach, CEO of ACTON Marketing LLC, which conducted the recent study, said, "More overdraft users will be opted out of their overÂdraft protection programs this summer due to not responding, than overdraft customers who will consciously opt out because of high fees. Our research confirms that if a bank or credit union sends out only the Opt-In Form, without previous info-marketing in place, almost a third of their overdraft customers will likely not respond, and will be opted out. Since especially heavy overdraft users are predisposed to Opt In, getting them to respond is key."

The study brought to light another customer concept not generally considered in the industry's ongoing dialog about Regulation E. The study found that if banks rely on only one Opt-In/Out contact, 30% of their overdraft customers will not respond, will be automatically opted out, and will not be protected by overdraft protection. When these overdraft users are no longer protected, and they start to have purchases denied at retail, they will most likely move their account to a different bank and away from their current institution.

Said Beach, "The psychology of overdraft users is such that they are extremely averse to having their debit card transactions denied at retail. If they begin to be denied, they will not just re-opt-in with their current bank or credit union. Most likely they will cut and run. And it will not necessarily be the better overdraft program of another bank that attracts them — it is the stigma and experience of being denied that they want to escape by moving to another bank."

Through overdraft analysis, 30% of the overdraft users will likely be automatically opted out this summer due to non-response to their Opt-In/Out forms — and they will then be without overdraft protection. That 30%, accounts for 11% of all the debit card user accounts in America being regular overdraft customers who are suddenly without overdraft protection. If those account holders begin to have their purchases denied at retail, nearly half — equivalent to 5% of all the debit card user accounts in America — will move their account to another institution.

"This notion of overdraft customers choosing to opt out, and projections of the associated lost income to banks, is much like a tempest in a teapot," says Beach. "Overdraft users are pre-inclined to opt in, even if they have to pay high fees. It's overdraft users' non-response that will result in the most fee loss — as much as a 30% loss of overdraft fees due to non-response. And then the other shoe drops — when unprotected customers react and banks lose 5% of their debit card accounts."

In March, 2010, ACTON Market Intelligence, a research division of ACTON Marketing, LLC, conducted an in-depth, Internet-based survey of 20,000 adult heads of household — the survey focused on their reactions to Regulation E. The full study report is available by contacting ACTON at www.actonfs.com. ACTON Market Intelligence is a wholly-owned division of ACTON Marketing LLC, in Lincoln, Nebraska.

ACTON Market Intelligence is a wholly-owned division of ACTON Marketing, LLC, Lincoln, Nebraska. ACTON Marketing is a full-service direct marketing organization that provides complete direct mail programs for financial organizations pursuing new account growth. ACTON Marketing was the first marketing company to promote free checking. Using decades of proprietary data, knowledge, and experience, ACTON Marketing continues to offer successful strategies, creative, and production services to clients nationwide. Besides its Checking Account Customer Acquisition program and its new Opt-in and NSF marketing programs, ACTON offers strategies for New Movers marketing, pre-approved auto loans, CD retention, cross-selling and more.

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March 26, 2010

37% of Debit Cards Are Charged NSF Fees

Significantly Larger Number Than Estimates

Lincoln, NE — Results of a nationwide survey of U.S. banking customers finds the size of the overdraft market — those who pay NSF fees to a bank or credit union — is significantly larger and more widespread than previously estimated by the financial industry.

In its nationwide survey of 20,000 U.S. adult heads of household, ACTON Market Intelligence found that of the more than 350 million U.S. debit card holders, 37 percent have had an insufficient funds transaction covered by an overdraft protection program within the past year.

Brian Beach, ACTON Marketing CEO, says, "Our financial clients sometimes see Regulation E as affecting only a small percentage of their overall customer bases. A study conducted by the FDIC prior to the current recession pegged overdraft users at only about 15 percent of the customer base. Our study shows that number is up significantly. Nearly four in ten bank and credit union customers have overdrawn their accounts in the last year and used their institutions' overdraft protection. So because of Reg. E, financial institutions must develop a wider effort to gather customer opt-ins than they previously considered."

The ACTON study, conducted in February and March 2010, also found the profile of the overdraft market has changed. Before the recession, the overdraft protection market was predominantly made up of light and moderate NSF users — with a small number of heavy users accounting for the vast majority of overdrafts and NSF fees. As of March 2010, a majority of overdrafters remain light users (1 to 4 ODs per year). However, more than one-in-three of the overdrafters are heavy users, accumulating more than 10 overdrafts per year. That data suggests that some non-overdrafters became light users, and moderate overdrafters became heavy users — which considerably widens the market affected by Regulation E.

Beach continues, "Not only are there more overdraft protection users in today's market, there are significantly more heavy users than previously believed. Conventional wisdom had five percent of a financial institution's customers accounting for about 80 percent of the NSF fees. As of March 2010, we find it's over twice that many who account for 75 percent of the overdrafts and fees. Simply put, the overdraft market is larger and more widespread than has been reported in the past. Banks and credit unions must target their Reg. E opt-in efforts to over a third of their customers because more than one-in-ten is a heavy overdraft user."

Who are the financial institutions overdraft protection customers? According to the ACTON Market Intelligence study, they appear to be relatively normal, everyday people — most often 42 years old, white female, empty nesters, who tend to own rather than rent their homes, and have annual household incomes of $48,500.

Says Beach, "The stakes of the Reg. E opt-in are higher than a lot of institutions thought. Banks and credit unions assumed their opt-in marketing efforts should focus on a very small number of customers. In reality, the future of their overdraft protection programs hinge on the opt-in/opt-out decisions made by nearly four of every ten customers."

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March 11, 2010

Reg. E Survey: 57% of U.S. Consumers Would Opt-OUT Today

Consumers largely unaware of their banks' current overdraft programs

Lincoln, NE — Preliminary findings of a nationwide survey of U.S. banking customers show that if consumers had to decide TODAY, well over half (57%) would OPT-OUT of their bank's NSF overdraft protection program.

Preliminary data, from surveys submitted as recently as this week, show that 57% of consumers feel they don't need overdraft programs and/or don't want to pay the associated bank fees.

These findings confirm that banks and credit unions have a significant consumer education and marketing job to do before July 1, when the first Regulation E changes take effect.

Says Brian Beach, CEO of ACTON Marketing, LLC, "Regulation E doesn't need to result in banks and credit unions having to take a huge hit in NSF fees. In fact, savvy financial marketers could actually increase their companies' NSF fees by capturing the customers lost by banks that aren't handling it right."

According to preliminary study findings, only 28% of bank customers in America said they were "absolutely certain" about their financial institution's NSF overdraft program, its fees and structure. Twenty-two percent (22%) cited they "didn't have a clue" about their financial institution's NSF overdraft program. The study shows that over half the banking customers in America lack significant understanding with regard to the overdraft program currently offered by their bank or credit union.

Continued Beach, "Banks and credit unions should be certain they have at least three legs supporting their NSF stool. First, they should design their overdraft programs in line with what their customers want and need. Do the research. Pay attention to studies like ours. Certainly, find out what their customers will accept, but also see what they really need. Next, financial institutions should educate their customers about their NSF overdraft programs. It's clear from our survey, bank customers are largely unaware of the overdraft programs now offered by their banks or credit unions. Finally, the institutions must employ Opportunity Marketing. They need to know the elasticity of their NSF fees, how to market for a great response, how to structure those fees for optimal opt-in. Simply, how to do it right."

The new Regulation E requirements say all financial institutions must inform their customers about their NSF overdraft protection program and give customers the option to accept or decline the program's coverage for debit card transactions and ATM withdrawals. Otherwise, no NSF fees can be assessed for those insufficient fund transactions. (Reg. E does not affect paper checks and automatic transactions.) The most recent ACTON Market Intelligence study shows 75% of American households have and use a debit card.

Says Beach, "Because of Regulation E, banks and credit unions do not have the luxury of business-as-usual approaches to their overdraft programs. They may have been regulated into a corner, but they're not necessarily trapped there. They can educate and market their way out of the Regulation E corner."

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February 22, 2010

ACTON Study Asks Consumers About Overdraft Opt-in Intentions

20,000 Consumers Share Their Ideas About Banks' Overdraft Programs and NSF Fees

Lincoln, NE — The Federal Reserve Bank projects that banks could lose nearly half of their overdraft protection customers after banks' compliance with the Fed's Regulation E. But Brian Beach, CEO of financial marketing firm ACTON Marketing, LLC, believes that such dire forecasts do not necessarily apply to the savvy bank marketer.

"If the future of the banks' overdraft programs are dependent on the will of the consumer, we thought someone should study that will," says Beach. "And that's what we have our research division doing. From in-depth market understanding and concepts developed from the study, we can construct a marketing playbook for banks â€” strategies that optimize both response and positive opt-ins."

To study the will of the consumer, ACTON Market Intelligence (AMI), ACTON's research division, fielded a national survey of 20,000 American adult heads of household so AMI can determine what program and marketing strategies will result in bank customers responding positively to the mandatory overdraft opt-in. The study was developed in collaboration with top bank executives, government and elected officials, and selected marketing consultants across the country.

Beach also says, "Despite the current anxious atmosphere in the financial industry, the sky doesn't need to fall on banks after August 15. Many banks feel it's a certainty that they'll lose significant revenues. However, we believe Regulation E offers aggressive bank marketers opportunities to maintain or even increase revenues from their overdraft programs. This is Opportunity Marketing. Snatching bank revenues from the jaws of Regulation E."

The consumer study began February 9, as a random sample of 20,000 adult heads of household were contacted and received survey questionnaires. Zach Gabelhouse, M.S., AMI's Director of Modeling and Statistical Analysis, says, "We're studying all elements of an opt-in program — optimal point analysis, in-depth program features, and the alternative structures of an overdraft program. We're also going into the psychometric elements of overdraft protection and the consumers' feelings about having their debit card transactions approved or denied at the retail level.

"We'll find the sweet spot for NSF fees and determine what the consumer will accept with regard to aggregating overdraft fees," Gabelhouse continued. "Our study will determine the optimal mix of no-fee and fee-based overdraft coverage. And, we'll compare study results by region and demographics. We anticipate the optimal overdraft program will be different by geographic region and by demographic segment. These findings should offer banks and credit unions valuable insight for building and marketing their overdraft programs."

Results of AMI's study will be available in March to banks and credit unions that have agreed to be study participants. Preliminary results are expected as early as the end of February.

Beach added, "Basically, we believe a bank or credit union that has done this kind of research due diligence will be able to structure and successfully market its overdraft program and get a high customer response with a satisfying number of opt-ins. So, no, the sky doesn't need to fall on financial institutions because of Reg. E."

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July 10, 2009

ACTON Marketing and Speedeon Data Team Up to Offer New Movers Program

Lincoln, NE — ACTON Marketing, a company that offers targeted advertising promotions, and Speedeon Data, offering data management and delivery solutions and append services to clients, announce that they have partnered to provide a New Movers Marketing Program to the financial services industry.

The New Movers Marketing Program allows banks and credit unions to reach individuals and families who have recently changed addresses. Typically, the New Movers message is delivered to homeowners and renters during their first week in their new locations, as opposed to the customary timeframe of over two weeks.

The New Movers Marketing Program has successfully completed testing and is available to clients across the country. It's being used by some of the larger financial institutions in their respective markets.

Besides the advantage of speed-of-message, the New Movers Marketing Program data is more accurate than any other similar data set used in the market. ACTON Marketing chose Speedeon Data because of the recency and accuracy of their new mover data. Speedeon takes raw information and converts it into a usable format within 24 hours of the data being aggregated by Speedeon. Much of the underlying data is sourced from unpublished sources that are not available to other data providers. The quick compilation of data makes it the freshest source of New Mover data available.

At the same time, the data is highly accurate; reaching the individual level, containing verified apartment numbers, and including phone numbers.

ACTON Marketing creates the messaging for financial services marketing and promotions. ACTON Marketing has been the leading checking account marketer for financial organizations since it introduced its checking account direct mail marketing program in 1982. Through testing and monitoring marketing conditions, ACTON Marketing offers clients the best method to reach prospects with a compelling message that generates positive action and opens accounts.

Statistics show 50,000 to 60,000 U.S. households move daily. This accounts for one in every five people annually. Since convenience is a primary factor individuals consider when they choose a financial institution, it is an advantage to a financial institution to make new movers aware the bank or credit union has an office in the neighborhood, offers accounts that deliver benefits to customers, and has a special incentive (gift) for the new mover. These are the goals of the New Movers Marketing Program.

ACTON Marketing, Lincoln, Nebraska, is a full-service direct marketing organization that provides complete direct mail programs for financial organizations pursuing new account growth. ACTON Marketing was the first marketing company to promote free checking. Using decades of proprietary data, knowledge, and experience, ACTON Marketing continues to offer successful strategies, creative, and production services to clients nationwide. Besides its Checking Account Customer Acquisition program and New Movers Marketing Program, ACTON offers strategies for CD retention, cross-selling and more. ACTON Marketing's proprietary TasCSM Model is proven to select better routes that increase response, while reducing overall marketing costs for greater Return on Investment (ROI).

Headquartered in Cleveland, Ohio, with offices in Chicago, New York and Washington, DC, Speedeon Data offers an array of data management and delivery, marketing campaign optimization, and data append services to businesses of all sizes. The company's unique offerings leverage a large number of data providers, proprietary processing techniques and state of the art infrastructure to deliver the most current, timely and accurate data available anywhere. To learn more visit speedeondata.com.

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July 10, 2009

ACTON Acquires Fairfield Research Operations Division and Database Assets

Creates ACTON Market Intelligence

Lincoln, NE — ACTON Marketing LLC, a company that offers targeted advertising promotions to the financial services industry, has acquired a research-operations division of Fairfield Research, Inc., a market research firm.

The acquisition includes Fairfield's databases of online consumers as well as proprietary data and survey software. The Fairfield division's capabilities and assets have been wedded into a new ACTON division, ACTON Market Intelligence. The new division is a full-service market research enterprise that serves ACTON Marketing's bank and credit union clients.

ACTON Market Intelligence offers an array of syndicated research reports and white papers, and provides custom research services for individual banking clients nationwide. Fairfield Research's market research data and databases were merged with ACTON Marketing's consumer databases to provide the basis for development of unique bank marketing products and services.

"We've seen a growing demand for quality market research information and consumer intelligence from our clients, in fact, throughout the financial industry," says Brian Beach, ACTON Marketing CEO. "Now, more than at any other time, banks and credit unions need to understand what their customers are thinking, what they want, and what they expect from their banking relationships. The Fairfield acquisition and the launch of ACTON Market Intelligence allows our clients to take advantage of a technology-based communicative link with their own customers."

Beach adds, "We're extremely excited to be able to extend ACTON Marketing's complete research resources across the larger banking industry."

Speaking about the acquisition, Fairfield Chairman Gary Gabelhouse says, "ACTON needed to expand its business in this direction — greater market intelligence and marketing information for its clients and the financial industry. We quickly concluded ACTON needed what we had developed over the last twenty years."

"Collectively, we feel that if the future of the banking industry is driven by the will of its customers, ACTON Marketing should be the firm out there measuring that will," Gabelhouse says.

Gabelhouse is retained on a consultative basis to explore and identify other markets that can accelerate ACTON Marketing's growth.

ACTON Marketing LLC, and Fairfield Research, Inc. are both located in Lincoln, Nebraska.

ACTON Marketing is a full-service direct marketing organization that provides complete direct mail programs for financial organizations pursuing new account growth. ACTON Marketing was the first marketing company to promote free checking. Using decades of proprietary data, knowledge, and experience, ACTON Marketing continues to offer successful strategies, creative, and production services to clients nationwide. Besides its Checking Account Customer Acquisition program and New Movers Marketing Program, ACTON offers strategies for CD retention, cross-selling and more. ACTON's proprietary TasC^SM Model is proven to select better routes that increase response, while reducing overall marketing costs for greater Return on Investment (ROI).

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