C1 Bank Expands Mercedes Giveaway, Cashes In on Free Publicity

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C1 Bank knows how to get noticed. Though most banks looking to publicize a name change rarely attract much attention, the former Community Bank & Co. rolled out its new name last month with a promotion the press could not resist.

The Lakewood Ranch, Fla., bank is offering a new Mercedes-Benz to state residents who put $1 million in a five-year certificate of deposit. The bank is set to expand the program to include its business clients.

They get the car up front as prepaid interest, a form of "instant gratification," says Trevor Burgess, C1's chief executive. The car's value equates to roughly a 1.2% annual percentage yield, which is a competitive rate.

"I'm always looking for ways to set us apart from our competition and show excitement," says Burgess, who came up the idea for the promotion himself. He hoped to create buzz for the name change and attract new customers, and says he succeeded on both counts.

"Banks often struggle getting the word out," he says. "But we've been able to cancel our paid advertising around the name change due to all the free press."

C1 received coverage from local and national media. Though the general consensus was that other types of investments offer a better return, some industry observers had high praise for the concept.

Other banks should think about using the "instant gratification" tactic, says Jeffry Pilcher, the publisher of TheFinancialBrand.com.

Whatever amount a particular CD would normally earn, a bank could find a desirable item of equivalent value to offer up front instead of paying interest, Pilcher suggests.

"You don't have to make it a big, jumbo, super giveaway," Pilcher says. "The concept is scalable. The same principle applies at the $10,000 level as at the $1 million level."

With rates so low and unexciting these days, Burgess thought a car might be a stronger incentive to some CD shoppers than the interest. "What fun it is to be able to drive off in a Mercedes."

Burgess says he expects someone will take the bank up on the offer, especially since 20 people already were considering it just a week after the promotion launched.

"No one has driven off in a car yet," he says. "But we have two people who say they're coming in over the next few days."

Customers can choose from four models: a sports car, sedan, SUV or cabriolet. C1 worked out a discount with a local dealership so the purchase price, with tax, title and tags included, works out to about $61,000, which is the same as a 1.2% APY.

Business customers can qualify for back-to-back 30-month leases. In addition to the four models offered to retail customers, business clients can also opt for a sprinter van, Burgess says.

Anyone who withdraws the cash early would have that amount deducted from their principal, plus a $3,000 penalty.

Burgess says that while C1 has plenty of liquidity, it is adding loans fast and is eager for more clients. He says C1 had a loan pipeline of $50 million last June, compared with $250 million now.

So besides offering the unique CD, the bank is also reviving another creative promotion, paying new customers $5 a month for a year to open a checking account with direct deposit. That was an offer C1 ran last fall in response to Bank of America's attempt to charge a $5 monthly fee for debit cards.

Since the Mercedes CD is just for those with $1 million, Burgess brought back the $5-a-month offer, so that C1 has a deal available for every new customer to coincide with the name change.

The promotions will run for at least a few months. Burgess says he believes they send a message about C1, even to people who don't take advantage of either. "It's a way of showing how we can think about things, in not just a cookie-cutter way," he says. "When people think of C1, I want them to think of innovation."

Burgess, one of the principals at the privately owned bank, says the name change is also meant to help it stand out. "There are so many banks in the state of Florida and across the U.S. that are called 'Community Bank,'" he says. "Every time we were doing something interesting and innovative, we were advertising not just our Community Bank, but community banks in general."

Burgess, who worked on initial public offerings as a managing director at Morgan Stanley before leaving the firm in 2008 and moving into retail banking, likes the name C1 because it sounds modern and captures the bank's core ideals of putting customers and the community first. C1 has also been an acquirer; it closed its purchase of the $134 million-asset Palm Bank in Tampa on Thursday.

Asked if a branding firm devised the name, Burgess laughs. "No, I came up with it myself," he says. "This is an owner-operator here."

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