Google, Facebook, Yahoo!, Amazon and eBay all built very successful web business models by attracting extraordinarily large audiences to their web sites. Meanwhile the Banks focused on reducing transaction costs by converting “real world” customers into online traffic.
Traffic was King. It attracted advertising revenues, it attracted media attention and it attracted investment dollars.
The underlying assumption in the market today is that Traffic will also be King in a Mobile World. Successful web business models will readily translate into successful mobile web business models and the web’s market leaders of today will be the mobile leaders of tomorrow.
I suspect this assumption maybe wrong. I suspect the next wave will be all about turning “Traffic into Customers” and, as Google has recently discovered with the Nexus One Phone, converting online Traffic into “Real World” Mobile Customers is extremely difficult. This is supported by a 2009 survey of 190 e-commerce executives that indicates that 87% eCommerce sites convert less than 8% of their traffic into customers.
The decade old strategy of reducing Customers to Traffic may have allowed Banks to do more with less but it has also opened the door to a new breed of Financial Services Provider. Retailers and other customer facing industries who are more than happy to take care of the customers the Banks have failed to turn into traffic.
You see once the customer becomes traffic then you no longer have a relationship. You have an audience and the Banks that continue to focus their energies on turning real world customers into Mobile Traffic will not only miss an opportunity secure an even larger share of the Customer’s wallet they will also put their relationship with the customer at risk.
The core business of Retail Banking was, and still is, a volume game. Most retail customers have high transaction accounts with small account balances. The only way to profit from this sector is to increase your fees and/or reduce your costs of doing business. Online banking was, and still is, helping retail banks achieve this. Mobile banking has the potential to deliver even greater savings.
However if Banks are to profit from this Mobile Banking revolution they must rediscover they are in the customer service business and not the traffic aggregation business.
Increase web traffic
April 14, 2010
I still think traffic is king.. I mean only one difference is there.. Targeted traffic is king.. The more traffic you have the better the chance of converting them into customer.. But however do not expect tohave a joke site and expect too much revenue.. Most people who come there just come to enjoy the jokes…