Banks Increase Marketing Efforts To Ensure Customer Loyalty According to Mintel's Comperemedia.

Business Editors

CHICAGO--(BUSINESS WIRE)--Dec. 4, 2002

Throughout 2002, banking institutions have increased the amount of direct mail they send to customers and prospects in an effort to grow accounts, number of products, and deposits. Comperemedia tracked a 38% increase in the number of banking direct mail in the first quarter of 2002 compared to the fourth quarter of 2001. Similarly, a 35% increase was tracked in the second quarter of this year compared to first quarter of this year. Banks have also increased the number of statement inserts they include in an effort to achieve their goals while at the same time limiting expenses.

Banks promote a variety of products and services through direct mail, including checking, online banking, debit cards and some investment vehicles. "More and more we are seeing banks trying to expand by offering a financial services solution," said Susan Wolfe, Director of Research for Comperemedia. Basic checking accounts are offered as the point of entry and then the customer will be steered toward other products. The basic checking products are usually offered free of service charges and with no minimum balance required. Customers can invest through the investment vehicles offered and receive better rates on CDs and IRAs or receive discounts on loans or service fees. Some banks also provide financial advisors to work with customers to develop investment plans. Overall, banks are positioning financial services as a way to meet financial needs and simplify customers' lives.

Customers can also save by purchasing "bundled products" or by increasing their account balances. This benefits both customers and banks. The customer benefits by saving on service charges and receiving a higher level of services. Banks benefit by making each customer more profitable and instilling a greater sense of loyalty, which limits customer attrition. In an effort to expand the number of products per customer, a number of banks are offering cash incentives with each additional product bought. This can be money directly deposited into the customer's account, discounts on loan products, or in the form of a gift card.

As banking products and services have grown more comprehensive, the incentive programs have become more sophisticated. For example, Bank of America has run a sweepstakes program to entice customers to meet with a personal banker. The customer receives a gift card in the mail that is guaranteed to have at least $10 on it and as much as $10,000. The customer must bring the card into the branch and meet with a personal banker to find out the amount on the card.

Mintel's Comperemedia is the foremost media monitoring system in the United States and Canada. An online database and news service, Comperemedia is a premier source of competitive intelligence tracking products, offers, incentives and creative techniques across two types of media: direct mail and print advertising. For more information, please visit www.comperemedia.com.