Maybe I’m biased as a fan, but I think Netbank’s Concert Connection, sponsoring a free Wallflowers concert, is a great stunt. Especially if the bank can leverage it to gain exposure in more than just the Austin market.
Here’s the offer (click on inset below to see landing page): Customer’s who plunk down $500 into a new checking account, or $1500 into a CD or Money Market, get two free tickets to a private Wallflowers show in Austin, TX on Sept. 17. The money must be kept on deposit for at least 90 days or the bank will deduct $85 to cover the tickets.
The bank’s press release says it will be promoting the offer with a mobile vehicle along with billboards, print and radio ads. The concert venue holds 5,000, so Netbank can use the offer to attract a maximum of 2500 new accounts.
This is an expensive promotion for a single market, with the concert alone cost an estimated $100,000 or more, not to mention the cost of promoting it in the Austin market. It might make more sense to sponsor an entire Wallflowers tour, providing tickets to new Netbank customers around the country. That would be even more costly, but would guarantee broad exposure to the offer.
Yet, we still like the Austin promotion for several reasons:
1. Free publicity: There’s nothing like a free event to garner media exposure.
2. Lasting brand impression: Unlike other media campaigns, this event should provide a more lasting brand impression, especially with the 25-35 crowd attracted to this music.
3. Dylan connection: The Wallflowers, led by lead singer Jakob Dylan, son of rock legend Bob Dylan, is an especially good choice for this promotion. Along with its younger fan base, the band will also attract attention from an older crowd that might drop $1500 into a CD to see if Jakob can carry on dad’s legacy.
4. Concert tie-ins: Even though the event is primarily oriented to Austin-area consumers, it will pull in business from Wallflowers fans all over Texas. But to reach beyond Texas, Netbank should consider negotiating rights to offer the concert as a free download for all its customers. Other tie-ins with merchandise, fan clubs, and so on are also possible.
1. Demographic mis-match: Alt-rock fans aren’t usually old enough or wealthy enough to be parking big cash piles in a bank. Many will deposit the bare minimum and pull it out after 90 days or when their CD matures.
2. High acquisition cost: As you can see by the mini-business case below, the acquisition costs are hefty. Assuming Netbank ends up with 500 new accounts that remain open after the 90-day minimum, the cost per new account is $2000 or more.
3. Extra customer service load: The first law of marketing applies here: for every customer delighted with your offer, another is mad because they missed out on it for some reason. We can already see brewing discontent on the Wallflowers bulletin board from rabid fans that don’t have the extra cash to plunk down into Netbank to earn the tickets (we have one word of advice for them: eBay). Also, there can always be headaches when third parties are involved. As we were researching this article, we noticed that the ticket fulfillment site, Tickets.com, was not functioning properly. We were able to download two Wallflower tickets without fulfilling the offer requirements. We notified Netbank right away who will likely have it fixed within hours. Now if we could only find a business reason to be in Austin on Sept. 17….
Back-of-the-envelope business case:
Cost = $150,000
$100,000 for the concert + $50,0000 out of pocket promotional expenses (assumes radio exposure is bartered for with free tickets)
Accounts generated initially: 1500 x $2000 average deposit = $3 million in deposits worth $30,000 to $60,000 per year assuming a 1% to 2% spread (will depend on deposit mix)
Long-term accounts generated: 750 assuming a 50% fallout after the first year
Acquisition cost: $150,000/750 = $2000 per long-term account