How to Get Customers to Your Bank

Attracting customers to banks in an era of instant national interest-rate comparisons is an extraordinary challenge, particularly as increasing rates of bank failures decrease customer confidence in the sector. Small and large banks alike may leverage their advantages in targeted marketing campaigns to attract deposits and new loan customers. Competition in retail banking also means that you should alter your marketing campaign as different banks adopt similar strategies for reaching new customers.

Instructions

1. Go beyond interest rates to attract new customers. Most banks will not be able to beat the interest rates offered on a national level. One of the most difficult things for a bank to communicate to potential customers is the quality of customer service offered. Use testimonial-based advertisements to highlight the benefits of customer service. This is particularly important for long-term loan relationships such as mortgages. If customers believe that a loan officer at your bank will be attentive to their individual needs, they may be more likely to overlook differences in interest rates.

2. Increase customer access to funds by expanding ATM networks and improving online banking offerings. ATMs and online banking are less expensive than training and paying tellers. But building an ATM network is expensive, particularly if you're not a franchise of a larger national bank. Many smaller banks have gotten around this issue by subsidizing fees paid to out-of-network ATMs. This allows smaller banks to offer the same ease of access as larger banks at a relatively low cost.

3. Create time-limited marketing incentives to attract new deposits. Offer to pay termination and transfer fees from old banks. Offer cash payments for deposits over a certain amount. To maximize effectiveness, limit the offer to a period of 60 days or less and emphasize that fact in advertisements. Offer tiered rewards depending on the level of deposit made. In most cases, customers will stay with a bank that they have opened an account with for years.

4. Measure the effectiveness of your marketing. Try to run only a few marketing initiatives at any one time so you can more easily measure their effectiveness. Repeat promotions that have measurable results, and curtail the campaigns that fail. Consider how profitable a campaign was per dollar spent.

5. Offer higher interest rates on savings accounts and lower interest on loans to existing customers with high bank balances. It's much less expensive to keep a customer that you already have than to attract a new one. Tiered accounts create incentives for your customers to keep their business with you rather than shop around elsewhere.

References

• Chicago Sun-Times: Tips for the banks looking to attract customers
• Bank Marketing: Testimonial ads win loyalty and attract customers
• Long Island Business News: Banks using incentives more often as way to attract customers

Resources

• Forbes: How U.S. Banks Can Attract Middle-Market Customers
• QuickMBA: Marketing Strategy