ING Direct Shuns Branches, But Offers Coffee and Counsel

Hoping to engage consumers with a latte and a side of financial advice, ING Direct is offering a series of financial seminars at coffeehouse-style outlets. The café strategy is just the latest effort by the Amsterdam-based online bank, which has no physical branches in the U.S.,  to make an end-run around its American counterparts.

ING’s U.S. chief Arkadi Kuhlmann has a reputation as a Harley-driving, palm-reading iconoclast who likes showing his U.S. rivals how you can still entice consumers with good deals on simple services and products without benefit of much physical infrastructure. In an interview with Time magazine last June, Kuhlmann talked about how he wanted ING Direct to emulate “no-frills” success stories in other industries, much like Southwest in the airline business and IKEA in home furnishings.

In just a few short years, ING Direct — known for its iconic bright orange ball logo — has broken into the U.S. market by offering some of the best deals around on online savings accounts. The company stole loads of deposits from its U.S.-based counterparts. Now the bank is playing barista, too.

In uncertain times, free coffee and counsel may be just the trick to win over battle-scarred banking customers. The seminars feature financial experts offering advice on timely topics such as savings strategies and financial life lessons. ING has opened eight café locations which offer free Internet access and coffee drinks through a partnership with Peet’s Coffee. Newcomers to the banking seminars are offered a free beverage when they attend.

ING isn’t exactly breaking new ground with its coffee klatches. Umpqua Bank in Oregon, which also hawks music CDs in its “retail stores” as it tries to cultivate its own Nordstrom-like image, has been successful with its communal and caffeine-charged approach to engaging consumers in its outlets. On the other hand, WaMu tried selling Starbucks nearly a decade ago as part of its experimentation in branch design. Results there were mixed. Customers liked some elements of the branch design, but the industry deemed coffee and sweatshirt sales too far out of the banking box.

Renegade ING has a better shot than most at making this café strategy pay off because it fits with the bank’s unique brew of financial services. Bottom line: This novel approach to customer engagement will work for ING because it matches their over-arching brand, message and approach.