Magazine article American Banker

Let Deposits Come Looking for You - Try Direct-Response Ads: Campaigns Require New Skills from Bankers, but Marketers Say They're More Cost-Effective Way of Attracting Business

Magazine article American Banker

Let Deposits Come Looking for You - Try Direct-Response Ads: Campaigns Require New Skills from Bankers, but Marketers Say They're More Cost-Effective Way of Attracting Business

Article excerpt

NEW YORK -- Direct-response marketing is more cost-effective than traditional advertising for drumming up new business, some marketers say.

A direct-response ad campaign aims to persuade customers to make a phone call or mail a coupon in response to a particular offer, such as an individual retirement account or a money-market account.

This kind of marketing entails skills and operations that are relatively new for bankers.

Typically, customers are encouraged in direct-mail pieces and newspaper and television ads to call toll-free numbers. So a bank must set up a customer-service center to receive incoming calls.

This means learning how to manage calls, deciding how to deal with an onslaught of calls during busy times, and hiring employees skilled in phone communications, says Joyce Healy, senior vice president at Manufacturers Hanover Trust Co. The bank runs such an operation in Hicksville, N.Y., for a nationwide marketing program for credit and deposit products.

If a bank plans to market products outside its traditional market area, it obviously must choose those markets.

"We watch a lot of markets and a lot of products regularly," Ms. Healy says. Since a higher interest rate is a common lure for Manufacturers Hanover's deposit products, the bank keeps close tabs on local interest rates in the different markets.

A bank must also choose its advertising medium -- direct-mail, newspaper, magazine, television, or radio ads.

Manufacturers Hanover has found print advertisements to be more effective than direct mail, Ms. Healy says. "We have not found it as effective for rate-driven advertising."

Direct mail requires longer lead time to establish the program compared with print ads, Ms. Healy explains, which is less attractive for the bank since it must move quickly when its marketing is based on interest rates. …

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