US Bank launches START savings scheme
US Bank is the latest major
bank to launch a savings-based affinity programme in a bid to
encourage the savings habit. Douglas Blakey spoke to Stephanie
Miller, vice-president of product development, about the START
programme, set to be rolled out across the US Bank footprint
following a successful pilot.
In a bid to kick-start customers
increasing their savings balances, US Bank, the fifth-largest US
bank by deposits, has rolled out a new savings programme, ‘Savings
Today And Rewards Tomorrow’ (START).
Following a successful pilot in Seattle,
Cincinnati and parts of Missouri last year, the bank launched the
programme across its branch network in Arizona, Idaho, Minnesota,
Nebraska, Oregon, Tennessee and Washington at the start of this
year.
By the summer, the initiative will have been
rolled out across its entire 3,014 branch network, but already the
bank is declaring START to be a hit.
“Savings trends in the US have been in decline
for a number of years and with the recession hitting, it has become
increasingly important for our customers to have a safety net,”
Stephanie Miller, the bank’s vice-president for product
development, told RBI.
START was designed as a ‘simple and rewarding’
way for customers to save, enabling clients to regularly transfer
money into a savings account and to earn rewards when they reach
savings milestones.
In particular, the bank gives a $50 US Bank
Rewards gift card when customers’ savings balances reach $1,000,
while a further $50 is earned if that balance is maintained for one
year – with no strings attached.
“We did a lot of consumer research before the
launch and the whole concept of START actually came from our
customers,” Miller said.
“I would use the weight loss analogy. We
know it is the right thing to do but sometimes need a little bit of
extra motivation to say ‘this is the step I am going to take and
actually do it today’.
“The success of the pilot is not really a
surprise. From phone interviews we have carried out, we scored high
for customer satisfaction.
“People are telling us START really is helping
them to save.”
The launch has been promoted by an integrated
advertising campaign including TV, radio, newspapers and outdoor
creatives. A complimentary online campaign is also in full swing,
backing up in-branch marketing efforts.
“Our branch sales consultants are a force to
be reckoned with and will spread the word while the media plan is
pretty aggressive,” Miller added.
The only marketing tool not yet up to full
speed is a viral campaign but, said Miller, while the bank has not
fully implemented a social media strategy it is “on the radar
screen”.
With the desire to leverage retail deposits
now stronger than ever, it is no surprise that savings programmes
such as START are continuing to spring up around the globe,
particularly in mature markets where innovative products tend to be
at a premium.
Examples include Nordea introducing the ePiggy
savings/loyalty programme in Scandinavia last May, a month after
National Australia Bank rolled out its AddsUp service (see RBI 613),
which encourages customers to save A$300 ($235) in their AddsUp
Savings Plan by promising to match savings dollar for dollar up to
a maximum value of A$400 a year.
An understandable desire to boost cross-sell
ratios has also been behind a number of well publicised customer
retention schemes which pre-date US Bank’s offering, but Miller
said this was not the primary reason for the scheme being
introduced.
“I think it certainly may have an effect on
cross-sell and will offer some improvement,” she said.
“We do have goals for the programme by
attracting new households to the bank and we will look to deepen
existing relationships.
|
Product innovation
|
|
Bank savings/loyalty programmes
|
|
Bank
|
Country
|
Name of programme
|
Launch date
|
Incentive
|
|
Bank of America
|
US
|
Keep The Change
|
Oct 05
|
Savings matched for first 3 months; 5%
thereafter (up to $250 p/a)
|
|
Lloyds Banking Group
|
UK
|
Save The Change
|
Feb 07
|
Savings matched up to $80 in first two months
after launch
|
|
Wachovia
|
US
|
Way2Save
|
Jan 08
|
First year 5%, second/third years: 2% (up to
$300 p/a)
|
|
Scotiabank
|
Canada
|
Bank The Rest
|
Apr 08
|
Savings matched up to $90 per year for new
customers in September-October 2008
|
|
OCBC
|
Singapore
|
SmartChange
|
Nov 08
|
Savings matched for first 3 months, 4.88%
thereafter (up to $125 p/a)
|
|
Nordea
|
Scandinavia
|
ePiggy
|
May 09
|
No matching
|
|
NAB
|
Australia
|
AddUp
|
May 09
|
Savings between $235 and $400 matched each
year
|
|
US Bank
|
US
|
Savings Today And Rewards Tomorrow
|
Jan 10
|
Gift card of up to $100 after one year
|
|
Source: RBI
|