Pricing Institute Pre-Survey

Moebs Services, Inc. Research, Consulting and Training for banks, credit unions and savings institutions.

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Moebs’ Pricing Institute
TFCU
Pricing Institute Survey

Welcome Texans to the Pricing Institute:

All of us at Moebs $ervices are looking forward to your participation in The Pricing Institute.
In order to make sure we address areas of specific interest to you during The Pricing Institute, please take no more than 60 minutes to answer the survey below.

The survey is designed to assist the Moebs team in improving your learning experience for the week of March 21.

Doing the survey will also put you in the running to win prizes at the end of the Pricing Institute later this month.

Participants will have the ability to compete for Best Pricer and Best Pricing Teams. We give away prizes to the top 2 individuals and top team. Scores will be determined by taking into account an overall performance and improvement from this Pre-Survey to the Post-Survey on the last day.

Responses to the True and False questions give us an overview of participant experience in pricing. So, don’t spend time “studying” the questions – just let us know your top-of-mind response.

For the survey and Pricing Institute checking accounts are transaction accounts which is the international term to describe withdrawals, debt card charges, deposits, etc.

Please finish the Survey in one sitting since we are unable to save incomplete responses. The first and last person to complete the Pre-Survey will be recognized in class.

Please provide your Name, Position and Email address at the end of the Pricing Institute Pre-Survey.

Thank you,

J.V. Proesel, Elizabeth Hamlin & Mike Moebs

P.S. For more information click this Frequently Asked Question link.

Moebs $ervices, Inc. Pricing Institute – Online Pre-Survey

1. Fees, or prices, and non-interest expenses, or costs, have an inverse relationship. Higher priced fees are typically related to lower costs.

a. Trueb. False

2. Unbundling means charging explicit prices for each service but waiving for a relationship.

a. Trueb. False

3. Penalty pricing tactics always work. The disadvantages of this approach are: the risk of legal action, consumer ill will, and the loss of volume and potential revenue.

a. Trueb. False

4. Fractional pricing, an example: using $19.57 instead o $20.00, is a way to make the consumer more aware of your pricing and/or prices.

a. Trueb. False

5. Packaging tactics, an example: many features or services in one account, rely on the perceived value and require many services grouped in the package are used.

a. Trueb. False

6. “Free” is a form of loss leader tactics which emphasizes efficiency and low cost.

a. Trueb. False

7. A bundling example is a group of services for one price such as free transaction account linked with a certificate of deposit, you expect one of the services in the bundle not to be used.

a. Trueb. False

8. Ultimately, pricing can be summarized as follows: “Give the user options with incentives for the options which will be profitable to both the user and the institution.”

a. Trueb. False

9. Money market deposit accounts must be tiered to work.

a. Trueb. False

10. If a service is priced just high enough to cover only the direct, indirect, and some overhead costs it should be discontinued.

a. Trueb. False

11. The profitability, revenue – cost, of a loan is most profitable at the start of the term of the loan.

a. Trueb. False

12. The only time the payment types of fee, rate, or balance approach in pricing works is when the price policy for each payment type is neutral for the buyer of the service.

a. Trueb. False

13. It is better for a business checking account to charge an overdraft (OD) fee than to advance funds and charge interest.

a. Trueb. False

14. Netting is the process of subtracting revenue from expense or cost. This is done to evaluate if an account is profitable.

a. Trueb. False

15. The pricing element of value is simply the benefit of the service.

a. Trueb. False

16. A low-price demand good or service has many competitors.

a. Trueb. False

17. Pricing correctly cannot change a bad image, misguided brand, or poor strategic plan.

a. Trueb. False

18. Expense control, strategic direction, marketing orientation, and price management affect price.

a. Trueb. False

19. Supply strategies differ from demand strategies in measuring strategic price elements.

a. Trueb. False

20. All demand services are loans, investments and fee services.

a. Trueb. False

21. Supply services are only insured and uninsured deposits, and interest-bearing transaction accounts.

a. Trueb. False

22. Pricing is not a tool for expense control. Controlling cost is a separate function.

a. Trueb. False

23. A short, simple informal message on plain paper without the financial institution’s logo is not the way to communicate prices to users.

a. Trueb. False

24. Barter is a form of pricing which allows the user to practice self-service for the benefit of the financial institution’s cost and expense control.

a. Trueb. False

25. Skimming is a pricing tactic which is based upon a lack of price sensitivity and high price.

a. Trueb. False

26. Free transaction accounts are most often obtained by consumers who are in need of funds and therefore requires cross-selling capability by the financial institution.

a. Trueb. False

27. Instead of trying to cross sell services, many financial institutions use the pricing tactic of discounting.

a. Trueb. False

28. Student and senior transaction account packages work well for the institution because students and senior citizens use every service in the package of financial services offered.

a. Trueb. False

29. Banking is information in motion.

a. Trueb. False

30. Taking inventory of all financial services and their prices is not a good first step for a new pricing task force in a depository. Concentrate first on the most unprofitable service.

a. Trueb. False

31. If you have high expenses versus your competition, you can still be price competitive.

a. Trueb. False

32. Competition and value have an inverse or negative correlation for both demand and supply services. Higher competition corresponds to lower value, while low competition corresponds to high value.

a. Trueb. False

33. Cost and relationship have a direct or positive correlation. Higher costs are associated with higher or more complex relationships. Lower costs are associated with lower or simpler relationships.

a. Trueb. False

34. Technology has substantially increased the number of competitors in financial services.

a. Trueb. False

35. The 80%/20% Rule, 80% of revenue comes from 20% of users, can measure the number of accounts, customers/members, and even relationships for optimal profitability.

a. Trueb. False

36. Institutional risk increases with more volume.

a. Trueb. False

37. Gap Analysis and Duration Analysis are used to assess risk on assets and liabilities.

a. Trueb. False

38. A FICO score is as one of many tools used to assess risk in judgmental decisioning.

a. Trueb. False

39. Relationship pricing works because the cost of the service is missing from the measurement process.

a. Trueb. False

40. Volume, cost, relationship, and institutional risk are grouped for pricing purposes.

a. Trueb. False

41. Price, value, competition, and user risk are not grouped for pricing purposes.

a. Trueb. False

42. Loss leader tactics require relationship strategies be emphasized and implemented.

a. Trueb. False

43. Successful relationship pricing is best measured by household profitability.

a. Trueb. False

44. People are good at making decisions but bad at identifying the information needed to make the decision.

a. Trueb. False

45. For Demand services user risk is highest when the value of a service is highest.

a. Trueb. False

46. A FICO score is not the way to assess the risk of a user of a consumer financial service.

a. Trueb. False

47. Diseconomy of Scale, or beyond the Economy of Scale, for a financial institution is the same as Too Big To Fail – very large financial institutions who if they fail could bring down the whole financial system.

a. Trueb. False

48. On a typical auto loan, early payoffs (payoffs occurring within the last 6 to 9 months of the loan) should be discouraged since the net financial results are better when loans go to term.

a. Trueb. False

49. Economy of Scale, or optimal level of operation, tells us how to manage price.

a. Trueb. False

50. Economy of scale embraces factors causing the average cost of producing something to fall as the volume of its output increases.

a. Trueb. False

What 3 questions, needs or topics do you want to discuss at the M$ Pricing Institute. (3 Required)

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