At first glance the two promotions look identical: free iPods for new customers who agree to pay bills online.
But the differences between JPMorgan Chase & Co.’s offer, which began June 1, and the one Citigroup Inc. introduced in December show that the New York banking giants have different objectives.
Citi’s main goal is to encourage people to use its online banking site, said Catherine Palmieri, the managing director of Citibank.com.
JPMorgan Chase’s is “to get customers in front of our bankers in the branch,” said Tom Kelly, a spokesman.
Citi is offering the trendy Apple Computer Inc. audio players to people who open checking accounts through its Web site and commit to paying bills online for a year. They receive an iPod after three months of paying bills, but if they stop using the service, Citi will charge them for the gadget.
JPMorgan Chase is offering iPods to people who open an account at a branch — online signups do not qualify — and who pay as few as two bills online.
It imposed the modest bill-payment requirement because “we want online to be a portion of what they do,” Mr. Kelly said. But the goal “is really to talk to customers face to face,” he said. “When people open the account, that is the time they are most receptive to additional products.”
The Citi campaign has been a success, Ms. Palmieri said. Tens of thousands of iPods have been given away, she said, and though some applicants may have initially been more interested in them than in a checking account, the vast majority continue to bank online. Fewer than 50 people have been charged because they stopped paying bills online, she said.
Tying the giveaway to “the ability to apply online is an integral part” of the promotion, Ms. Palmieri said. “If the offer is compelling, the ability to act on that offer right away is also compelling.”
Citi also tries to sell customers additional banking products when they sign up for new accounts online, but only at the very end of the process, Ms. Palmieri said.
If there were offers on every Web page that people fill out, she said, they might get tired of the account-opening process and abandon it. Citi would rather land the a customer with a basic account than lose one because of aggressive selling.
“Online, fatigue becomes a factor,” she said. If customers are bombarded with other offers while filling out an online application, “pretty soon they say, ‘Forget it — I don’t want anything.’ ”
Mr. Kelly would not say how many customers JPMorgan Chase’s new promotion has attracted or how successful the in-person cross-selling efforts have been.
George Tubin, a senior analyst at TowerGroup Inc., a Needham, Mass., unit of MasterCard International, said the promotions reflect the two companies’ different strengths.
JPMorgan Chase has more branches (more than 2,500 nationwide, against Citi’s March total of 883) but Citi has the lead online, Mr. Tubin said.
Lacking its rival’s “physical reach,” Citi has more reason to encourage people to use the Web, Mr. Tubin said. Furthermore, he said, Citi has the better online banking site.
Still, by requiring people to make some use of online bill payment, JPMorgan Chase is encouraging them to bank online once they have signed up in person, he said.
