If there is one constant these days it is that your competitors tomorrow are going to come from the most unlikely of places. Apple came from nowhere to unseat RIM and Nokia in mobile phones, Amazon is becoming a major force in tablets, Google’s Chrome and Android products have made it a major force in software and operating systems.
But the examples above are technology-based so they shouldn’t be too surprising as we have come to expect tech companies to be quick to enter new markets. What could portend a future trend however is Bank of America’s move into the deals business. The feds have passed laws to limit how banks can generate revenue from consumers through fees so they are scrambling to make money in new ways.
Earlier this year the company announced it was going to launch BankAmeriDeals which would allow customers to get additional cash back on a monthly basis depending on where they shopped. The interesting thing is the bank doesn’t make money from these transactions – they do on the increased credit card processing of course. The idea here is to boost credit card usage by taking share from other banks and cards like American Express.
Some of the companies involved in the program currently are FedEx Office, redbox, ADT, HSN and Burger King?
American Express for its part already has merchants it works with on a customer cash-back basis so BoFA isn’t necessarily breaking new ground.
What may be new however is the television ad campaign the bank is running. In this economic environment, everyone is looking to save and if the company can position itself as a solid choice for customers seeking deals, it may become a magnet for vendors looking for more customers.
This could end up hurting Groupon, LivingSocial and others and it reminds us competition can come from anywhere.
I reached out to David Godsman, the bank’s online and mobile solutions executive and didn’t immediately hear back on how large the ad campaign is but if I do I will update this post.