Are Bank iPod Giveaways A Good Idea for Banks?

NetBanker recently highlighted free iPod offers that two banks are making online to prospects. Beyond the question of the campaigns’ ROI, these efforts should raise two strategic questions for banks to address:

1) What impact (if any) could this have on existing customers? These offers recall the approach that telcos often take — offering great deals to new customers while treating existing (and potentially loyal) customers like 2nd class citizens. Isn’t it possible that existing customers, coming to the bank’s site to log on to their accounts, will see the offer and wonder “why don’t they give ME an iPod? I’ve been making direct deposits and online payments for years!”

Customers won’t leave the bank because of this. But it might plant the idea in some of their heads that taking care of them is not their bank’s top priority.

2) Do these giveaways attract the right customers? Execs at a bank that ran a free iPod offer told me that while the campaign brought in more customers than they had expected, it attracted a predominately young group of customers who, quite frankly, didn’t have the funds and assets to put into the accounts and products the bank really wanted to sell.

In addition, since these new customers didn’t fit the typical customer profile, the bank was ill-suited to support them, and it experienced a high rate of attrition among these customers.

My take: Few banks can adequately and accurately answer these questions. The root cause: Misalignment of acquisition and retention marketing efforts.

Organizationally, the people responsible for these efforts are in separate departments. And strategically, there’s no clearly defined and accepted customer strategy to guide long-term relationship building that encompasses the product-focused marketing and selling efforts.

iPods may get some new customers in the door, but what are you going to do with them once they’re there?


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