Banks offer incentives for new customers

More banks around the Springfield area are offering incentives to customers who open new accounts or take up new business with them.

And while gifts for new customers are nothing new – household items such as cookware and toasters have been banking industry staples as far back as the 1960s – the gifts themselves are more monetary in nature.

“Pots and pans and other consumer durables may appeal to some segment of our potential customer base, but I’ve yet to find anybody that doesn’t like cash,” said John Cox, head of retail administration for Commerce in Springfield.

Commerce Bank began offering its More Than Free Checking program in mid-2005. The program offers new customers a “restaurant menu” of options, including checking, online banking and bill pay, with accompanying cash incentives for each, with a maximum of $100.

Cox said the program focuses not only on bringing in new customers, but also on keeping them longer.

“Banking customers will stick with you longer, and be better and more profitable customers, if you have multiple products with them,” Cox said. “Our incentive programs are designed to reward the customer for expanding the relationship into multiple areas.”

While Cox did not give specific numbers on the success of More Than Free Checking, he said that the large majority of new transaction accounts take advantage of the program.

Meanwhile, Wood & Huston Bank is one of the first in the state to offer free checking accounts that accrue interest for the customer.

The new program began less than two months ago, according to Springfield bank President Carol Carlson, who said it’s still too early to gauge the reaction to the program.

“Springfield is very knowledgeable in their banking needs and what they get, so sometimes they need to see a program over a period of time and see how it’s working,” Carlson said.

“When you talk to the general public, people say ‘Sure (the bank) should give me a free checking account – I keep my money there.’ When you ask them what they’d really like to see, they want to see interest.”

The accounts offer 5 percent annual yield, and also include free online banking, free bill pay and no minimum balance.

Empire Bank’s incentive program offers $25 MasterCard gift cards to customers who sign up for a free checking account, plus an additional gift card for each friend they refer who opens an account.

Shelly Titus, Empire’s senior vice president of retail banking, said it’s not a coincidence that so many banks focus on building their checking account rosters.

“Banks consider the checking account to be the core business relationship, and most consumers consider their primary bank to be where they have their checking account,” Titus said. “Banks are all looking for ways to grow and encouraging customers to switch.”

While free checking is offered at most area banks, one bank thinks it has found a unique way to bring in more checking accounts.

The monetary incentives are examples of a more sophisticated consumer base, according to Cox.

“It gives the receiver the opportunity to make the decision – they’re in the driver’s seat,” he said.

“It puts them in the position to utilize their incentive any way they want.”

Carlson said the shift to monetary gifts is in response to growing demand for more flexibility in their offerings.

“I think that if you ask an individual if they want a gift or if they want cash in hand, they may need a toaster that day, but they’d much rather have that cash in hand,” she said.

“You can only give so many gifts that keep on giving.”[[In-content Ad]]