Have you ever been part of a hotel loyalty program that makes you sign up separately online for a particular program such as "stay 3 nights in December and earn a free night in 2011"? While you likely signed up because you needed a vacation, it probably made you wonder why you needed to give your loyalty number and e-mail address again when they already have it? The marketing concept is called a "registration offer" and it is designed to make the customer notice and commit to a separate program. The concept is that if someone takes the time to sign up specifically, they will spend more time understanding the program and utilizing the offered product or service. Basically, it is a loyalty program within a loyalty program.
The registration offer technique works particularly well for banks to drive short-run behavior. Maybe your bank wants to build savings balances, increase debit card usage or generate loan balances. Having customers sign up lets you know who is interested in getting more direct marketing (like e-mail notices and alerts) and creates a mind set that they are dedicating themselves to utilizing a specific product.
The key to success about a registration offer is that it should be used to provide a short-term incentive to change long run behavior. For example, a marketing campaign that rewards all customers that utilize their debit cards 100x between now and the end of Dec. would have been perfect to run. Your pitch is that if you are going to use the debit card anyway to support your family and friends over the holiday season, then your bank wants to reward you with a present for yourself (say a $25 gift certificate). Customers sign up and self-define themselves as willing to increase the usage of their debit card. Once a customer signs up, it is now not only acceptable to market to them to reinforce the goal, but it is also operationally easy to look at this selected group of accounts in Jan. and see who qualifies.
Another tactic is perfect for banks thinking about closing down a branch. If two similar branches that are geographically near each other are being analyzed for being closed, a registration offer can be put in place to incentivize each customer to utilize the other branch for a period of 3 months. By looking at which customers opt-in, management will have a representative sample of predicted profitability and the probability of moving. This tactic not only produces data to better understand the retention impact of a branch closing, but it also helps train customers to shift their usage to another location. Best of all, it gives management an idea of which customers aren't going to move, so a more targeted incentive can be offered to this subset.
The registration offer works well with hotels, airlines, retail and banks. Separate registration - like a coupon, serves to segment your customers through self selection. Large banks such as Sovereign, make customers re-register with their Cash Rewards program. Bank of America has had a successful run with their Add it Up program. The next time you are thinking about promoting a product, consider using the registration offer technique and see if it is an effective tool for your customer base. You might just find out that the effectiveness may have you celebrating with a vacation.