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Banks moving into the increasingly competitive Fredericksburg market are offering gifts to attract customers

Banks moving into the increasingly competitive Fredericksburg market are offering gifts to attract customers

By CATHY JETT

Date published: 12/19/2004

By CATHY JETT

HINK BANKS never give anything away for free?

Think again.

Two relatively new banks are trying to make their mark in the increasingly competitive Fredericksburg market by offering freebies to customers who open a checking account.

And to lure new customers, some long-established area banks are giving away gifts as they branch out--and as a way to retain the clients they already have.

"You've got to do something to get people in the door, whether it's with a low rate on an equity line or a gift," said John C. Neal, president and chief executive officer of Union Bank & Trust. "I'm not sure what the correct formula is, but all of the above work."

Six-year-old Cardinal Bank, which is headquartered near Tysons Corner, is already having some success drawing customers to its new branches in Fredericksburg and Stafford County by giving a gift to anyone who opens a checking account. The latest offering is a stainless-steel thermos packaged with matching travel mugs.

"It generates activity that we wouldn't have otherwise," said Guy Johnston, head of retail banking. "It's better than just mailing out fliers."

Provident Bank, which moved into the area in 2000, also is attracting interest with the gifts it gives customers who open checking accounts, said Vicki Cox, spokeswoman for the Cincinnati-based bank.

The bank started the program about 10 years ago as it began to grow and acquire other banks. Its freebies, which have included Coleman sleeping bags and Corelle bakeware, change every couple of months.

"Different gifts have different pulls," Cox said.

Banks typically link a freebie to a checking account because that tends to be the starting point for most banking relationships, several area banking executives said. Once customers establish an account, they're more likely to come back to the bank for car loans, mortgages and other financial services.

"It's something that all banks look at all the time, because banking is intensely competitive," said Ronald E. Davis, president of Virginia Heartland Bank. "The only reason we haven't done it is that we couldn't come up with an item that we thought had enough pizzazz to get people fired up to open an account."

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Date published: 12/19/2004