Banks have started to implement incentive marketing because of the heightened competition there now is in the financial services field. They do this as they try to keep their existing clients, persuading these individuals to subscribe to more services while also gaining new customers through referrals. New clients are also gained by presenting them with marketing incentives. Although the banks get to enjoy a wider customer base in the process, the customers also benefits from incentive marketing by getting higher deposit rates, reduced interest rates, gifts or other perks. Banks that are gearing up against competition offer innovative marketing incentives, and the following are the top 3 reasons why.
Gain More Customers
Banks use incentive marketing to attract more clients. This is a major reason why banks employ incentive marketing. Business is brisk when there are more clients. When business is doing well, income levels are also at its peak. At the present time, almost all banks give out marketing incentives to clients who’ve opted to open a new account like basic checking, current, or daily savings account. Some banks that utilize incentive marketing often offer cash rewards or other privileges to clients who decide to transfer their accounts or just open a new one.
Additional marketing incentives are normally granted to clients who avail of a bank’s direct deposit or automatic bill-pay program. These are also offered when existing clients have successfully referred a prospective client to the same bank. This practice is very popular among banking institutions and typically, rewards of up to 50 US dollars are doled out to the existing client who made the referral while the new client is usually rewarded with gifts or tokens.
Sell Additional Services
The benefits of an incentive marketing program should not end with just drawing clients to the bank and keeping them. It must likewise entice existing clients to avail of other banking programs and services offered by the bank. A lot of banks nowadays give out marketing incentives just to encourage clients to try out their other services or products. To achieve this, banks usually post information about new or improved service at the bank’s mezzanine area or on huge glass windows so even onlookers can see and read them.
Incentive marketing can offer a reward to customers in exchange for making direct deposits or paying most of their bills online. New customers can also be rewarded when they choose these options as an add-on service when opening a new account. These types of marketing incentives create additional client activity, and these customers are transformed into an optimal source of profit as the client-bank interaction is transformed into a much broader relationship.
New Clients through Referrals
All businesses, banks included, benefit from word-of-mouth advertising as a simple but fast way of acquiring more and more customers. Banks employ incentive marketing to make existing clients feel that they are important. Clients feel good about this and they are more likely to refer their favorite bank to their family, friends, co-workers, and other acquaintances. When a bank uses marketing incentives, it usually gains new clients. Cost-wise, this is one of the most effective methods of getting more business out of clients.
Although incentive marketing costs a little more than direct mail, e-mail blasts or cold calling to tap possible customers and generate new business, the huge amount of benefits you will potentially reap is beyond compare. You are most likely to keep customers that you won via marketing incentives compared to customers you gained via other means.