Consumers are indiscriminate: They use any channel that works for them -- branches, call centers, ATMs, Web sites, or online chat.

Trouble is, these channels are agonizingly expensive for firms to maintain and integrate.

What's a firm to do? One solution: offer fewer channels. ING DIRECT supports just the phone and the Web. With a couple of channels and a handful of products, the upstart has plucked $17 billion in customer assets from banks and credit unions in the past three years.

But this kind of minimalism isn't a tenable answer for firms that already offer a multitude of channels. For them, the best strategy is to migrate appropriate transactions from higher-cost, human-assisted channels to electronic channels like the Web -- a strategy we call right-channeling.

Secrets Of Top Right- Channelers

Credit card providers have yet to succeed at right-channeling customer service requests. But some firms have had better results than others (see the figure at right). Wells Fargo comes out on top; it incents branch staffers to sign customers up for online access when they open new credit card and checking accounts.

Card providers have had success moving prospects online. More than half of the online consumers who researched a credit card in 2003 used the Web as part of their search process.

Many of these customers go on to apply for the card online. When would-be applicants abandon a credit card application on the American Express site, the firm pops up a window asking them if they'd like to save the app and return to finish it later.

More Best Practices In Right-Channeling

Our research shows that consumers are willing to turn off paper statements if firms give them a good enough reason to. Financial incentives work: NetBank, for example, gives customers a $3 discount on their monthly checking account fee for opting for electronic statements.

Small business owners are heavy users of bank support staff. But they can be coaxed to do more online with 24x7 access to their cash position.

Dutch bank ABN AMRO promotes its smart ATMs and refuses to answer balance inquiries at the branch.

UK direct insurer Direct Line cuts its incoming email volume by continually beefing up the natural language knowledge base that sits behind the "Ask us a question" button at the top of all of its Web pages.

Got Feedback?

As always, we're eager to hear from you. Do you have topics to recommend, data you need, or technologies you want assessed? Drop me a line with your input at billdoyle@forrester.com.


Bill Doyle
Financial Services Research Director

Research Referenced In This Issue Best Practices: Right-Channeling Customers Into Profitability (16395) Combating Fraud In Financial Services (34150) Financial Incentives Will Drive eStatement Adoption (16630) Fostering Self-Service At The Branch (33920) How Affluent Investors Use The Internet (33903) How Consumers Buy Financial Products (17210) How ING DIRECT Lured Away $17 Billion In Bank Deposits (33843) How To Prevent Abandoned Online Applications (33232) How To Right-Channel Credit Card Customers (17208)    Online Service: Finance's Best Practices (16977) Right-Channeling Small Business Banking (34106) The Anatomy Of A Great Banking Web Site (33723) Which Channels Financial Consumers Use (16241)

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