– Thoughts on Strategy and Management

Innovative new product idea from a bank

I really like this: Lebanon’s First National Bank offers Loans for Plastic Surgery. With the slogan “Beauty is no longer a luxury….  With FNB’s Plastic Surgery Loan you can cover all your Plastic Surgery operations and Orthodontics” they offer loans from USD 500 to USD 5,000. All you need is a certain minimum salary.

I never heard of anything like that – at least not here in Germany. Although I am not in need for plastic surgery or even financing for this purpose, I like the marketing strategy behind this product. This Plastic Surgery Loan is nothing else than an ordinary consumer loan: Customers are offered small loans without any securities and for no particular reason. The only precondition is a regular income. These are highly standardized products so that they can be processed very efficiently, which allows banks to offer competitive prices.

In most cases such loans are advertised as a means for fulfilling oneself wish, like a new TV set or a holiday trip – or plastic surgery. Often the advertising either mentions a great variety of things to do with this loan no particular purpose at all. I guess this approach might be a bit too general. We all have some more or less expensive wishes that we might fulfill ourselves with the help of a consumer loan. However, do you always remember your range of wishes if you see an ad for a consumer loan?

FNB went a step further. They start with a particular wish – in this case beauty and plastic surgery.

Chances are good that a significant proportion of their customers already has the whish to have plastic surgery, but does not have the financial means for it. For these customer group, the Plastic Surgery Loan is a very targeted offer. Suddenly they are offered a solution for their need they probably never thought of. I can imagine that such a targeted offer has a considerably higher conversion rate than a traditional general offer for a consumer loan with no particular purpose. This marketing approach – not the product design itself – is the real innovation.

When researching FNB’s website for this purpose, I discovered that they have a whole range of very targeted products for retail customers. All of them a described with a specific value proposition (You have a particular need – our product is the solution for you). After this value proposition they describe the benefits (no down payment, quick approval etc.) and only than comes the actual product description with terms and conditions. They offer, for instance:

  • Travel Loans (“You can finally visit any country you’ve always dreamt of.“),
  • PC loans (“Embrace this opportunity! How long have you been waiting for the right moment to buy a PC?”) and
  • Celebration Gift Cards. This is a nice idea too. It is a prepaid card that can be loaded with any amount. The presentee can use this gift card like a credit card for payments or cash withdrawals worldwide. Again, the product description starts with an appealing value proposition: “No more spending hours looking for the perfect necklace or the right sized shirt! No more wasting your time trying to get through the afternoon traffic or looking for a parking spot! And most importantly, no more offering disappointing gifts or drawing incomprehensible maps to an obscure shop!”

My congratulations to First National Bank for their creative product design and marketing!

One Comment

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