Barnett Banks Inc. is launching a major redesign of its retail product line to gain a greater share of the customer's wallet.
Jumping on a trend sweeping through the industry, Jacksonville, Fla.- based Barnett introduced an array of rewards and incentives for those who make deposits, investments, and take out mortgages and other loans.
The "preferred program," which offers sterling, gold, and platinum benefit levels, was begun last Monday. Customers get discounts on PC banking, preferred loan rates, free ATM transactions at other banks, and no-fee credit cards.
"The goal is to deepen our relationships with our customers," said Susan S. Blaser, Barnett chief marketing officer. "Over time, we think it will make us a more attractive place to do business."
In combination with the preferred program, Barnett has raised the monthly fees on its basic checking and savings accounts by $2, but it now offers up to $7 of monthly discounts for customers who reduce their reliance on branches in favor of ATMs and on-line and telephone banking.
The moves by Barnett are the first comprehensive product redesign in more than 10 years at the $44 billion-asset company. Moreover, they come as banks throughout the country are experimenting with retail product pricing and incentive offers aimed at guiding customers away from costly branch transactions.
Several large regional companies, such as NationsBank Corp. and First Union Corp., already have established such programs.
"All the major institutions are playing around with this," said Les Dinkin, managing principal at NBW Consulting Group in Westport, Conn. "They are looking at relationship pricing, giving customers credit for all the business they do at a bank."
Paying people to use ATMs is also catching on. Barnett's offer to give discounts to those who use ATMs instead of branches follows a program started in May by NationsBank in Florida.
Charlotte, N.C.-based NationsBank pays customers up to $2.50 a month for using ATMs to make deposits. The program, which is now available only in Broward County, was slated to end July 31, but NationsBank has decided to extend the effort, said a spokesman.
"The ATM has not been promoted as a place where people can make deposits," he said. "People think of it as a place to withdraw money. We're hoping this promotion will change that."
Mr. Dinkin said banks are wise to offer incentives to try to reduce customer reliance on branches.
"It's more efficient for the institution to process activity outside the branch," he said.
