I wasn’t sure about the mathematics of the promotion. We don’t know how much the bank spent on production of DM pieces, posters, take-ones, statement stuffers, etc. Without knowing the total cost of the promotion, it makes it tough to accurately evaluate the ROI.

It’s not really critical how many new customers they yielded. Nor is the average cost-per-new-customer that important. What’s interesting is that those 500 customers brought in an average of $10,000 each in new deposits. So I’m guessing their profitability exceeds the cost, but again, I’m not entirely sure.

I’m also guessing they spent at least an additional $100,000 (don’t forget postage, so let’s make it $150K) on top of the $50,000 for the grand prize. They also had gas cards and a trip giveaway, which adds another $5,000.

Important to note: They gain MCIF info from the entries, so there’s more opportunity for cross-selling.

I wonder if this promotion went only to existing customers…?

Then I thought, “$100 per customer? A couple of years ago I was told that it took about $45 in advertising to get a checking account. That wasn’t such a good idea.”

Finally, I realized “If $4,000,000 of that $5,000,000 was loaned at an average of 5%, that’s $200,000 in income in the first year. What a great idea!”

The power of a comprehensive and effective marketing campaign never ceases to amaze me. Thanks for the story.