266 Unit 4 Bank Management Creating Promotions Promotion is an activity that increases consumer awareness of a product. Advertising is a type of promotion. Can you think of a television commercial that recently made you laugh? The funny commercial made you remember the product and is one way the company promotes it. The methods and locations for promoting a product have changed. In the past, promotion relied heavily on advertising. Advertising meant promotions on television and radio or in newspapers and magazines. Today, promotion is more dynamic. Advertising is only one option. Promotions can include almost any activity: • distributing pens with the bank’s logo • sponsoring a city-wide event, such as a concert • creating a website • sending e-mail messages or social media updates to customers • distributing calendars or some other daily-use product • holding seminars to help customers that are considering fi nancial milestones, such as buying a house, starting a business, or retiring The banking industry has many regulations on promotions and advertisements. Interest rates, for example, must be stated in specific ways. Select terms must be avoided or included. If a certain balance must be maintained to take advantage of an account feature, that must be included as part of the advertisement. For example, if a customer must maintain a minimum balance of $2,000 to avoid a fee, that needs to be stated. In addition, the phrase Member FDIC must be included in anything C that promotes a deposit account or the bank as a whole. This signifi es that depositors are insured through the Federal Deposit Insurance Corporation. Member FDIC must also appear on the homepage of the C bank’s website. When mortgage products are advertised, the Department of Housing and Urban Development (HUD) requires that fi nancial institutions state they are an equal-housing lender. Figure 11-5 provides an example of a compliant print advertisement. Making a Sale Some type of contact is needed for a sale to happen. Selling occurs in many ways, but for banks, personal selling is the most common. Each time a bank employee comes in contact with a customer, or potential customer, that employee is applying personal selling. Saying, “hello,” “how can I help you?” and “is there anything else you need?” are examples of personal selling. Cross-selling is a personal selling strategy that encourages existing customers to buy new products or services based on their previous purchases. Cross-selling is the result of Ethical Banking It is unethical for a bank I i hi l f b k I i hi or any other business to take part in deceptive marketing. It is important for banks to not only comply with laws, but to ensure that any claims made are in no way misleading. This is not only an ethical and legal consideration, it is also good business. Green Banking Banks spend a lot of time and money on advertising costs. Although online marketing is becoming more common, some promotional materials are more effective in print form, such as brochures. Many banks are now using environmentally friendly supplies for their printed advertisements, such as paper made from sugar cane, rather than wood. Sugar cane actually biodegrades faster than wood and is cleaner to make. This can be a perfect alternative for paper stock used for marketing and promotional materials.