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Shop for a new car, a cell phone plan, a cable TV package or a major appliance these days and you’ll find one consistent and very successful product strategy –Good/Better/Best (GBB). It works for checking accounts too!

 
 

GBB is a three-tiered strategy conceptually defined as follows:

Good - A basic level of value for price sensitive customers. Good offers a minimal amount of added value to differentiate yourself from your competitors and/or to marginally satisfy comparison shoppers. For example, coach class airline tickets would fit in this category.

Better - An in-between level of value for customers who appreciate some level of value and are willing to pay a certain price to receive it, because they are still a bit price sensitive. The amount of value added above Good depends on the product type and marketplace, but the incremental level of value must be noticeable. For example, business class airline tickets would be better than coach but not as expensive as first class.

Best - An advanced level of value for those customers who are actively looking for maximum added value. Price sensitivity is not a priority. The amount of value added above Better has to be all that is economically possible to add and still maintain acceptable profit margins or strategic goals. First class airline tickets would be a Best option when flying.

 

So how does this all relate to your consumer checking line-up strategy? Actually, it’s very natural, because you can align your GBB checking products with the three types of checking account buyers:

 

  1. A fee averse buyer wants free checking if it’s available or the cheapest, “no frills” account you offer. This is your Good account.

  2. A value buyer is most focused on account benefits and is willing to pay for the account if there’s a perceived fair exchange of value. This is impossible to pull off with just traditional checking benefits, so you’ll need to add some non-traditional benefits to justify charging a fee. This is your Better account.

  3. An interest buyer demands some competitive interest paid on their account balance and also expects to be rewarded for being a productive or loyal customer. This is your Best account.



Here’s how that breaks down, along with the comparative average annual revenue from each GBB checking product type and typical distribution of these accounts in a checking portfolio:

 
 
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Source - StrategyCorps’ Brain database tracking the financial performance of nearly 7 million checking accounts. Average annual revenue is the total of all checking related fees (including debit interchange) per respective account type and the allocated net interest income from the account type’s respective annual average DDA balance.

 
 

So what does a GBB-based checking line-up look like for a financial institution like yours?

Let’s discuss exactly how these GBB can deliver checking success at your financial institution.