In our marketing class last semester, we learned about augmentation and substitution effects in the contact of increasing customer touch points. A very relevant topic for this class indeed as the primary driver behind increasing customer touch points is the Internet. In the class, we specifically talked about Bank of America, and how sometimes increasing customer touch points may not not actually lead to the intended effect. Mobile banking for example, was intended to increase profit by reducing high fixed costs (i.e. traffic to ATMs and therefore less ATMs). In essence, banks believed that mobile banking would lead to a substitution effect. In fact, however, research shows that mobile banking led to an augmentation effect, whereby customers using mobile banking showed increased traffic to other touch points, like branches and ATMs.
Many analysts were surprised by the plateaued use of mobile banking in the face of burgeoning internet use. So much so that they've theorized the psychological reasoning behind why users aren't taking onto mobile banking as fast as BOA had hoped.
In my humble opinion, I think that m-banking just hadn't advanced enough - it was at an intermediary stage. With apps like QuickPay, where users can take a picture and deposit checks, I think the substitution effect that BOA was looking for will become more and more likely.
At the same time, my feeling is that banks need to be a little less stingy and put a little more money toward marketing these new apps. I can't say as an average internet user I would know what the heck is even going on in that field.
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