Hunting for suckers

The statistics are downright sobering about how ill-prepared most Americans are for the financial requirements of retirement. While the percentages vary depending on who is doing the figuring, none of them paint a very rosy picture of our personal fiscal discipline.

Sensing an opportunity to be the “hero” in this tragedy, many financial institutions and brokerage firms have stepped up to promote their plans that seek to help the average Joe or Jane develop a savings or investment habit – even a modest one. The benefit for the sponsoring firms? A brand new customer base that can then be cross-sold other products in the company detail bag.

The latest supposedly better mousetrap in the field is the “Keep the Change” program from Bank of America. And rarely has so much been spent promoting something so little.

If you’ve been one of the many who have been inundated with the company’s “What if all the loose change in the world got together?” television campaign, you probably were intrigued by the creativity of the execution. The fine print, however, leaves something to be desired.

If you enroll in the program, every purchase you make using your Bank of America VISA® Debit Card gets rounded up to the next dollar. That extra coin is transferred from your checking account into a savings account...that (they forget to mention) currently pays 2/10th of a percent.

Oh, sure, B of A promises to match your “investment” 100% for the first three months, and then 5% after that. But, that match is only on what’s in your “Keep the Change” account one year after you start. And, you have to still have your checking and savings accounts in good standing to get the match. And, even then, you don’t get your reward for two months after that.

So, in essence, you’re letting B of A rent your loose change for a year for 2/10th of a percent. That’s a far cry from what you’d earn if you scraped together your actual loose change every month and put it in an average mutual fund. But we digress...

The point is that this must be catching on, because B of A is spending a pretty penny promoting it. That is a sad commentary on the state of marketing communications, because this sizzle has no steak.

If you’d like to make certain you’ve actually got some meat on your marketing bones, ask yourself these questions:

• Are we solving real problems? A program that disciplines a new saver to dedicate a set sum each month toward his or her future is meaningful to the customer, and has the chance to build market share for the company that could be worth something some day. Moving pennies from one account to another? Not likely.
• Does it have sustainability? Is this a product or service that’s chasing today's ambulance, or can you see it still being sold by your company three to five years from now?
• Could you, in good conscience, sell it to your mother? If you can’t look at mom - or yourself in the mirror - then you have your answer.

The message: You can either follow the "fool and his money are soon parted" philosophy, or you can work a little harder, and push for products and services that actually make a difference for your customers.