CATHY SCHMIDT
Competition is good
The days of giving away free toasters at the local bank are gone. Now, the bank is giving away cash.
As the banking industry becomes more competitive in the Bay State, local banks are giving consumers free products, offering free international trips and handing out some extra cash to consumers as a signing bonus.
With the introduction of a national bank, constant consolidations and rumors of mergers throughout the area, banks are vying for the attention of the customer. Recently, some local banks have upped their marketing strategy in an effort to win banking customers from competitor banks – and this time, the competition is fierce.
From nationally celebrated sports figures to cross-country trips, banks are making spring the season of bargain shopping for consumers.
Eastern Bank, based in Boston, is now offering new customers up to $50 each when they open a free checking account – along with a $50 bonus when they close an account at another bank.
And if an extra $100 is not enough to entice a potential customer to switch banks, Eastern is also including a free companion airline ticket certificate for every new customer who opens a free checking account.
“With the changing banking landscape, we [Eastern Bank] determined that there weren’t too many free checking providers,” said Gary Coltin, senior vice president of retail banking at the $4.7 billion asset bank. “As there continues to be mergers and acquisitions in the marketplace, we thought now is an opportunity to put the choice in consumers’ hands, instead of a bank saying that because of a merger, ‘you were with Bank A and now you’re with Bank B.'”
Coltin said the marketing strategy, launched last week, will help consumers better understand the values and benefits of having an Eastern checking account, and they also get to enjoy some incentives if they switch banks.
“To entice the customer to move their relationship over to Eastern, we thought that customer needed incentive,” said Coltin. “By completing the switch-kit forms and closing out the other bank account, we will put $50 in [the customer’s Eastern Bank] checking account. If they use direct deposit with us, we will give them an additional $50. And we will also give them a free airline companion ticket” just for opening an account.
With the promotion, Eastern is offering a companion airline ticket certificate valid for up to 12 months.
Green Thoughts
Stepping up the marketing war just slightly, Citizens Bank has launched a “Head for Greener Pastures” sweepstakes in celebration of St. Patrick’s Day and its new Green Checking account. “Green Checking” is actually free checking with direct deposit, but in an effort to increase awareness of the product and other Citizens products and services, anyone who goes online to visit Citizens’ Web site can enter to win a seven-day trip for two to Ireland, $500 in cash or dinner for two at a local Irish pub.
To promote the sweepstakes, which runs through April 24, Citizens Bank distributed green M&Ms and postcards featuring sweepstakes information along the St. Patrick’s Day Parade route in Boston on Sunday.
“Green Checking,” although free with direct deposit, costs $5.95 per month without that service. It features free online banking with bill payment and 24-hour customer service without a minimum balance requirement.
“We launched a new Green Checking account with free direct deposit, and we are painting the town green,” said Cathy Schmidt, senior vice president and retail director for Citizens Bank of Massachusetts. “We have this terrific online banking channel, so we thought the sweepstakes would be a good way to get more people involved.”
In contrast, Eastern’s free checking program includes no minimum monthly balance and unlimited check writing. It also comes with free online banking and a free debit card. It does not require direct deposit, and Eastern does not charge customers a fee for using their debit cards for store purchases.
Banknorth, which just ended its “Win a Day With Ray” promotion that gave customers Ray Bourque bobblehead dolls and entered them into a sweepstakes to win a day with the Boston Bruins legend, charges consumers $6.95 a month for bill payment services, while Sovereign Bank charges $4.50 a month for the same service. None of the competing banks in the area – Banknorth, Sovereign Bank, Eastern Bank, Fleet Bank and Citizens Bank – have minimum balance requirements or a limit on the number of checks that can be written from a checking account each month.
Fleet and Citizens require direct deposit for a totally free checking account and Sovereign charges $1 a month for debit card usage.
“We are hoping to attract new customers and we are hoping to retain our current customers with this campaign,” said Joseph Bartolotta, vice president of public relations and corporate communications at Eastern Bank.
Bartolotta said in the Greater Boston area, Eastern has approximately 5 percent of the market based on deposit-market share, and the bank is aiming to attract more consumers who do not have deposit accounts with the bank.
“We think with a promotion as aggressive as this, we will be able to sign up and attract many of them,” said Bartolotta.
To cap off the free cash and airline ticket, Eastern Bank is also introducing a new tagline for the bank: “This is our territory.”
Bartolotta said the new tagline underscores Eastern’s local roots in a market saturated by out-of-state and national banks, while promoting Eastern’s areas of expertise: commercial lending, investment management and retail banking – and, now, free checking.
As the competition heats up, Schmidt said Citizens Bank is ready to compete.
“Banks are always looking to differentiate themselves from the competition so this is another way of differentiating ourselves from our competition,” said Schmidt. “Springtime is always a good time to talk to customers … and we hope to heighten awareness of the product and serve as many customers as we can. Competition is a good thing.”
Melanie Nayer may be reached at mnayer@thewarrengroup.com.
