April 17, 2007
I was in Wachovia today and found they were running a referral program where I would receive $25 automatically deposited into my account each time I sent them a new customer. The person who opened the new account would also get $25.
Is this really a good promotion for Wachovia? Are the kinds of people who open an account to get a $25 incentive really the types of banking clients that will ultimately make Wachovia money?
In some instances, cash incentives work great but I’m not sure banking is one of them. Don’t get me wrong, I love free money, but you have to ask yourself — was this really a good promotion for Wachovia? Does the offer of $25 make me any more likely to refer a friend or business associate? And what’s the ROI on that $25 promotion for the bank?
The problem here is that Wachovia is essentially paying for referrals and that’s not part of their normal business model. Referral fees and commissions are a common part of the compensation model for commercial printers and pharmaceutical companies. Banks market their business with services and rates. Any promotion they select to run needs to be complementary to their business.
What Wachovia should have done was to offer me and/or my referral some complimentary services OR access to a new product OR better rates. Any of those would have encouraged me to become more invested as their customer — essentially creating the loyalty they want and need from their customers and referral sources.
Be careful when constructing a a referral promotion. Avoid promotions which encourage you or your customer to do something that is unnatural for your business or business relationship. When you construct a program that provides value for both you and your customer, everybody wins.
March 6, 2007
I admit it: I love pens. I just left the doctor (long story) and while I was there I picked up 4 different pharma rep pens. I write a lot and so I am always looking for the perfect instrument. Pharma reps spend the most on their pens so I enjoy picking some up at the pharmacy or from my doctor. I figure this is a legitimate business effort, too, as I often get requests from clients to recommend premium items they can give to clients and prospects. The problem is that I almost never recommend a pen.
When selecting the appropriate premium item for your business you should always pick something that either relates to your business or has staying power — and by that I mean something your customer or prospect will keep around and actually use. I guess for pharma reps in an era where everything comes capsule-sized that there are few needs for spoons or medicine droppers so they go with pens for the staying power.
I know pharma reps also go with pens because the doctors and pharmacists use them, but do they actually ever read them? Today my doctor’s receptionist had 8 different pens on her desk plus a drawerful of extras that she generously shared with me. Do you think those pens are making him prescribed more, or me request more of their product? Absolutely not. One of my favorites was a metal, silver diamond, refillable Viagra pen, a product which will obviously be useless to me (but the pen is readily available on Ebay if you can’t find one at your Publix Pharmacy).
This week I’m helping a home improvement client select a thank you gift for his clients. We’re evaluating using private-branded window cleaner to leave for customers who have just received new windows. This practical gift has more staying power AND is a much more innovative idea than another bic or papermate.