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Smell the coffee, buy the mortgage

Opening a café in New York in which no financial dealings were permitted paid off for ING Direct but such a marketing stunt may not work so well in the UK, says Sally Laker

I was intrigued to hear of a marketing initiative by ING Direct, the retail bank with no branches which conducts all transactions via the internet and phone. To promote its banking business among potential new customers, ING Direct opened a café in central New York.

It serves coffee in a pleasing environment and has a comfortable lounge where patrons can read financial newspapers, watch the markets’ movements on plasma screens, use complimentary internet access to check their portfolios or chat with friends.

Surprisingly, customers can’t perform financial transactions in the ING Direct café, yet this single branch yielded more than $200m in new accounts and mortgages within a year of opening. ING Direct realised financial services had become so commoditised that an engaging experience was the best way to expose potential customers to its financial offerings.

The success of this initiative in the US provides food for thought for any mortgage-related business-to-consumer organisation. In particular, lenders and brokers could benefit from such an approach to their marketing activities.

Experience marketing, as it is often called, is a great way to build a brand. And this is also a good example of cross selling – all the better given that coffee and financial services would usually be considered unrelated.

It has always been a challenge for financial services retailers to grab the attention of consumers, given that many consider personal finance matters to be boring and are not prepared to engage with them. It is refreshing to hear that an innovative approach has been used to capture attention and engage people in dialogue.

Perhaps the café environment has also helped make consumers more comfortable with the brand because they are being introduced to the company through a social experience that involves no pressure to buy a financial product.

Consumers are also more likely to associate the ING Direct brand with a pleasant social experience rather than a cold financial transaction.

This is something Abbey pioneered here about five years ago linked to Costa Coffee and it was without doubt an innovative step. It would be fair to say that Abbey gave the idea a good run, but only a small number remain.

The reason for this could be that Abbey already had a great brand and didn’t need a gimmick to enhance it, whereas ING Direct needs to make its mark.

Also, the public in the UK tends to be quite astute when it comes to mortgages and financial products, and may expect to get straight to the point rather than be distracted by whether the coffee tastes good or otherwise.

While ING won’t reveal the details of its finances, it is thought that it makes a profit on the café and has plans to open two more in other US cities. I am not convinced that it would be as successful with this sort of initiative in this country but it’s still interesting stuff in the realms of marketing.


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