Increased competition, both online and at the branch level, has forced banks to consider a wide range of strategies for customer attraction and retention. One such strategy developed by Rennhack Marketing Services (RMS) <rennhack.com> leverages current technology to supercharge the old-fashioned free toaster concept.

In recent years, many banks have tempted consumers to open new accounts by giving away iPods, DVD players, and even free travel or cash incentives. While effective at bringing in new accounts, there seems to be less evidence to suggest that this approach does anything for customer retention over the long term. The RMS Banking Bonus program is intended to boost business and increase retention by rewarding both customers and employees for a range of activities.

First, each time an employee signs up a new customer, that employee is awarded points on the online system. By logging in to the RMS website, the employee can redeem their points online for gift cards, merchandise, or other services. Points are also awarded to employees for a range of business-generating activities, such as helping an existing customer apply for a credit card or open additional accounts.

Second, an additional and perhaps more powerful aspect of the program is that banks can also offer the same incentives to new or existing customers. By awarding points for enrollment in add-on services like direct deposit or automatic bill pay, banks can streamline service delivery and increase customer retention in one fell swoop. As an added bonus for customers and banks alike, participants can also win points by referring family and friends to open new accounts. In support of these initiatives, RMS offers banks a customizable online interface as part of the Banking Bonus system that can be bank branded for both customer and employee use.

RMS offers a large variety of products and consumer brands meant to provide the strongest incentives. Over 380 brands are represented in the system. Merchandise, gift cards, and “personal leisure rewards” from companies like Callaway Golf, Godiva, Dell Computer, and Walt Disney World are currently available to participants in the program.