E*Trade Aims to Attract Investors for the Long Haul
With its latest campaign begun this month, the company has rebranded itself as E*Trade Financial and is touting itself as a full-service financial institution offering brokerage, insurance, banking, research and advice.
Diane Glossman, an analyst with UBS Warburg, said E*Trade's rebranding is a way to go after customers interested in building wealth rather than customers just interested in inexpensive trading.
"In introducing its new brand, E*Trade is attempting to position itself in the minds of both customers and investors as a diversified financial services company rather than simply as an e-broker," she said in a recent research report. "In our view, this repositioning reflects the company's interest in pursuing a clientele that is more focused on building wealth and accumulating assets than on cheap trades or high interest rate deposits."
E*Trade began its new branding effort Feb. 3 with a television commercial during the Super Bowl. The humorous spot featured the company's well-known "mascot" chimpanzee, which was launched into outer space at the end of the spot, signifying the company's transformation. It also is using radio and print advertising.
In addition, the company launched a redesigned Web site organized around investing, banking, lending, planning and research. The site offers a range of personal finance products and services. Its redesigned Quotes & Research section offers detailed quotes with charts, market news and research data.
"The E*Trade Financial site has been reorganized to most accurately reflect how customers view their personal finances, making it easier for them to interact with us than ever before," said Pam Kramer, chief content development officer.
The company also plans to launch a credit card within the next two quarters.
"E*Trade plans on keeping credit in the very high quality range," said Glenn Schorr, an analyst with Deutsche Banc Alex. Brown Inc., "as much a CRM [customer relationship management] tool than a revenue generator."
For E*Trade to succeed in its rebranding, he said, it needs to effectively cross-sell its products and services. To date, the company has opened only 125,000 bank accounts, compared with its 3.7 million brokerage accounts. An E*Trade credit card should help cross-sell its other products, Schorr said.
E*Trade also plans to start a rewards program in the second quarter. Customers who enroll will earn points based on activities such as completing a stock trade, transferring funds or buying a certificate of deposit.
Schorr said the program will help differentiate E*Trade from competitors.
"Rewards programs are great for commoditized businesses such as credit cards, online trading, banking and mortgages," he said.