ING Direct’s smart business practices

Disclaimer: in this article I aim to discuss ING Direct’s business practices — mostly their marketing efforts — only. It is certainly a neverending discussion on which banks back this all up with a good product (rate and features) and good service.

I’ve always thought that ING Direct Canada’s business approach is smart, from its branding to its overall marketing to how it treats its customers. Over the years, it has projected a rather straightforward message about no hidden fees and good rates. This is complemented by an uncluttered website and a smart referral program. (In general, a referral program is usually a good idea, as it encourages people to recommend your product or company without having to pay them as employees. And, of course, you are not only getting new, high-quality customers — not just iffy leads — but you also take no risk until you’ve actually signed up a customer.)

ING Direct wasn’t the pioneer of high interest savings in Canada, but many people might think that it was. And even though the majority of other Canadian banks and credit unions have created high interest savings accounts (some which have higher interest rates), ING Direct remains a strong player. So it has been doing something right all along. Of course, the savings account isn’t the only “product” that ING Direct offers, but that account is a very important entry point for people to do other, more lucrative business with ING Direct, with mutual funds, mortgages, business accounts, and more.

Out of the blue, I recently got a package in the mail from ING Direct consisting of:

– The 272-page book The Orange Code: How ING Direct succeeded by being a rebel with a cause.

– A letter explaining their expanded referral program (both the referrer and the referree still get $13; however, they raised the limit from 20 referrals to 50 referrals, and extra monetary bonuses after you’ve referred 10, 20, 30, 40, and 50 friends:

Summary of ING Direct's new refer-a-friend structure

— This letter also notified me that ING Direct had made a deposit to my account for back-dated referral money from before the referral program was changed. (I was lucky to refer over 20 people a couple of years ago from this post.)

Why is this smart?

By sending the package in the first place, they are showing some customers that they care.

With the free book, they are enticing customers to learn more about them. Presumably, this will spur readers to talk about the book and the story behind ING Direct. (Note: I haven’t read the book yet.)

The revamped referral program structure is designed to get influencers to work cheaply for ING Direct. When I say “influencers” I mean consumers that other consumers listen to, providing free, effective, word of mouth advertising, provided that the influencers actually like your company. If you have the capability to refer up to 50 people, you are probably well connected or have an opinion or channel that people respect. ING clearly wants those people on their side!

By back-dating the benefits of a program, you help to keep your existing customers and once again get them to recommend you to others. So many times in the forums, I’ve noticed people complain about how a bank’s new promotion doesn’t apply to existing customers. In other words, those banks usually project an attitude of only caring about sucking people in, but not in treating them well once they’re customers.

I have a friend who received a similar package from ING Direct at the same time as me. Her reaction was: “I couldn’t believe they gave me $50. I love them!” I’m not quite as enthusiastic, but ING Direct certainly succeeded in many respects here.

 

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3 thoughts on “ING Direct’s smart business practices

  1. Hussain says:

    I have some other thoughts RE ING DIRECT Canada marketing strategy. ING DIRECT Canada has taken a consumer advocacy approach when it comes to their (i.e. never refer themselves as a bank, always speaking about “other” banks, etc). However, there marketing seeems to be contradictory at times – such as the current marketing campaign “fair fees”. The issue I have with this marketing approach is they “talk the talk”, but unable to back it up as they do not offer an alternative to what they are advocating to change. ING DIRECT Canada does not offer day-to-day banking account (i.e. checking account) either their business model is unable to handle this infrastrucutre or have realized it would have to actually charge fees. Wake up ING DIRECT!

  2. paul says:

    ING HighInterestSavings was also a CHEQUING ACCOUNT.

    I have been with ING for a long time…since mid 1990’s. I jumped in when people were still reluctant because this new bank with new internet banking system with no bricks and mortar offices to visit, deserved suspicion for anyone who wasn’t from Holland, like myself, that was familiar with this bank.

    And for everyones knowledge, they issue me cheques with my high interest accounts (CDN and US)that they still honor as a legagcy, but as you all know will not issue anymore. It has been over ten years since they offered cheques. I am careful not to use the few I have left, which i reserve for just linking to other internet banks that are sticky about only linking to cheqing accounts.

    I am certain that ING was forced by the Big five banks lobbying the government to not offer cheques as then this new bank would become too popular and cause declining profits and weakness in the big five. It turns out not to be all bad, because other Canadians are paying fees to the big five banks we PC Fin and ING users are enjoying a country of stable banking because of the gov’t backed oligopoly, while letting others pay the fees.

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