Compete with $100 Cash Offers
Financial institutions must always weigh the costs of any marketing campaign against the benefits. Any financial institution, whether it’s one of the nationwide megabanks or a smaller community bank, looks for a unique type of marketing that brings in the most customers at a minimum cost. Gift card programs provide the ideal solution to both problems.
It is a new and innovative way to market to prospective customers. For smaller community banks, this is a way to gain an edge over the large megabanks without having to spend to their level. For the larger banks, this is also an effective way to bring in new customers without having to pass the costs to existing ones.
What makes the Gift Card Program unique is that it offers the value and effectiveness of a $100 gift incentive at a fraction of the cost. Banks and Credit Unions are offered these Gift Card Packs for tremendous discounts off face value. Gift cards give customers the value of cash without costing banks or credit unions the same as a cash incentive, while also giving customers more buying power and flexibility than a straight-up merchandise offer.
This unique Gift Card Program was tested at the beginning of this year and proved to be far more effective than previous merchandising incentives the test bank in question had used in the past.
Data and Statistical Analysis
A gift card client bank began a marketing mail campaign that gave a $100 Gift Card Pack for coming in and opening a new checking account. 35,783 pieces of mail were sent, 1,662 of which were sent to existing customers. Results were measured over the course of six weeks. Marketing campaign offers over the course of last year from the test bank focused mainly on merchandise offers rather than cash incentives. Those items offered included a six-piece bowl set and a messenger bag for opening an account. With the discounts available on $100 Gift Card Packs, the costs were less than there previous merchandise offers. For the purposes of this study, the effectiveness of each campaign was measured in the same six-week cycle as the gift card mailing.
When comparing past marketing offers, none of the previous offers performed nearly as well as the $100 Gift Card Pack.
Here’s the comparison of campaign ROI costs.
Direct Mail Acquisition Cost
|6-Piece Bowl Set||$79.71|
|$100 Gift Card Pack||$68.00|
Initial test results show the gift card campaign is far more effective at bringing in prospective customers than marketing merchandise incentives of similar costs. The result is more customers and a lower cost per customer acquisition. Smaller community banks and credit unions now have a way to match or even exceed the offers from the larger banks without having to spend the same in marketing expenses.
The gift cards offer financial institutions both big and small the chance to use a unique incentive to lure in new customers.