The main problem I see with E*Trade is that while it is a good online trading service, it fails to fully meet the needs of the customers it serves. In particular, E*Trade lacks market focus. For example, because E*Trade only offers limited real time trade data and charges $15 to $20 per transaction it fails to be the best system for active day traders. And since E*Trade doesn't allow for direct deposit and provides minimal, if any at all, support for mutual funds, it fails the needs of long term investors.
Without a doubt, E*Trade's ability to handle tens of thousands of daily trades is an engineering triumph. Where E*Trade needs to improve and innovate is in satisfying customers. The biggest mistake E*Trade seems to make is to assume that all online traders care about is low commisions. I want low commisions but I also want to work with a brokerage that values my patronage and will do everything within its means to meet my trading needs. To do this I recommend that E*Trade do the following:
(1) Improve customer service: The most important asset E*Trade has is its customers. Not only is it the customers' money but it's satisfied customers who will help improve E*Trade's reputation. The best way to do this is to listen to your customers. Be proactive and go the extra mile. Make customer satisfaction a top priority.
(2) Implement on line banking access and allow for direct deposit.
(3) Provide greater information about mutual funds and mutual fund managers: E*Trade could truly set itself apart in this area by providing such information online which would make it easier for E*Trade investors to buy into a fund. Also, E*Trade could create index and sector funds, either managed by computer or by individuals, into which E*Trade customers could invest. I believe such endeavors would prove to be very popular with investors - especially among those managing IRAs.
(4) Satisfy customer trading needs by providing a more flexible trading system: Granted, the HTML interface is the least common denomenator. As a previous user mentioned, perhaps provide a low information content and a high information content page to allow users a choice about which trading page to download. However, to accommodate the trading needs of all its customers, E*Trade should provide Java, Active X and other custom interfaces. Such custom interfaces would greatly enhance the trading experience - especially for day traders.
(5) Reward loyal investors: I feel E*Trade should reward frequent traders or loyal investors in general with lower transaction fees, lower margin interest, higher money market interest, free real time quotes, etc. I don't expect E*Trade to break the bank to accommodate traders but I also hope they don't take their loyal customers for granted!
(6) Communicate better with shareholders (and potential shareholders and customers): Why is it that E*Trade's website is so deplete of information about the company itself? Why have I received only one newsletter in the last 3 months? Why does E*Trade make so little effort to communicate to the investing community about the service it provides and the direction it is going? The best companies in the market greatly value their shareholders. What is E*Trade doing to increase shareholder value? I feel these are important questions since E*Trade's ability to attract customers who will invest their mony with E*Trade goes hand in hand with E*Trade's ability to attract shareholders who will invest their money in E*Trade.
In summary, E*Trade may be a pioneer in online trading but they will only become a footnote in history unless they continue to innovate and strive with dogged persistence to satisfy their customers. |
