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Frequent Banker Award System
A savings fund society in Delaware, a national bank in New York and a credit union in Massachusetts are now participating in a program called "Frequent Banker"-the brain child of an ex-banker in New Hampshire.
Ted Amazeen developed "Frequent Banker" as part of his company, Emanacom, because he believes the best source of new business is the financial institution's existing satisfied customer base.
"Frequent Banker" works like this: the financial institution tracks customer activity such as opening a new account, adding to an existing account, purchasing a CD or taking out a loan and sends a record of that activity to Mr. Amazeen's company. He then sends statements to the customer informing them of the number of "points" they have accumulated. He likens the program to ones the airlines run for frequent flyers.
Customers can use these points in the way the sponsoring financial institution designates. At the Metropolitan Credit Union, for instance, customer credit card usage is rewarded by sending the customer a check at the end of the year.
Wilmington Savings Fund Society (WSFS) has three tiers of awards. Some awards are special deals on its own products such as waived fees on loans, bonuses on CDs, free checking or rate discounts on mortgages. They might also give coupons from local merchants, or customers may qualify for a large prize such as an electronic device, housewares or vacations.
Representatives from the three financial institutions already using the program say it is working well beyond expectations. WSFS says 40% of their customer base participates in the program, and 60% of them have increased deposits. Metropolitan says they have gained 2,300 new accounts in the last year, raising its total customer base to 12,000.
A spokesperson for WSFS said she feels national marketers in their area can entice customers away with their advertising of low price products. The experience WSFS has had with the "Frequent Banker" program is that it stopped what she termed "customer erosion" by building customer relationships. There has also been an encouraging number of new accounts opened as a result of the program.
Related link:
Keeping Bank Customers by Database Marketing by Arthur Middleton Hughes
Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 5, 1/95
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