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."
Virginia Heartland, a community bank that got its start in Fredericksburg in 1988, does, however, let employees in its various divisions give umbrellas, coasters and other small items at their discretion to prospective and existing customers.
And clients in its Commonwealth Club--which is for those who have deposits totaling $100,000 or more--are treated to luncheons and trips. "My assistant Jane Hart, who is an administrator, took a bunch of folks to New York this past weekend," Davis said recently.
The competition to attract and retain customers is likely to heat up even more as new banks and credit unions begin moving into the rapidly growing Fredericksburg area and existing banks open new branches.
Commercial banks in Fredericksburg, Stafford and Spotsylvania had a combined total of $2.2 billion in deposits as of last June, according to the Federal Deposit Insurance Corporation. That's nearly twice as much as in 1999.
Dawn Hoover, vice president of leasing and sales for the Silver Cos., said she gets at least one call a month from bank executives looking for locations in Central Park or Massaponax or along State Route 3.
"They're looking to cover the area," she said. "We need more convenience and locations that are closer to where people live."
Callers have included Bank of America, which is outgrowing its branch in Central Park, and First Citizen Bank, which will open in the former BB&T branch in that Fredericksburg retail development in February, Hoover said.
Some area banks are even thinking of expanding into other localities. Bowling Green-based Union Bank & Trust, for example, has started opening branches in Richmond as well as in Hanover and Chesterfield counties. And it, too, is using giveaways to gain potential customers' attention.
"We're so small in the Richmond market," Neal said, "that anything would help."
To reach CATHY JETT: 540/374-5407 cjett@freelancestar.com