Bankers want to attract customers to their on-line systems, but they go in different directions when it comes to promotions.

Several institutions have updated the toaster-giveaway concept and have brought it to cyberspace. Security First Network Bank, the so-called all- Internet bank, has given new customers Pop Tarts and Flying Toasters screen-saver software.

Eric Hartz, president of Atlanta-based Security First, said the giveaways are good because banking, even when done on-line, is "not that interesting." Banks generally offer the same products, he said, and anything that differentiates helps attract business.

These and other promotions-such as "banking in your bathrobe," which gives a bathrobe to customers who charge $5,000 or more in four months-have helped land many customers, Mr. Hartz said. The bank, which has been operating since 1995, has 12,000 customers and $48 million of assets.

Many bankers, including Mr. Hartz, understand that the days are gone when such giveaways played a major role in keeping customers on board.

"We are not into the gimmick thing," Mr. Hartz said. "If you have value, that's what you push."

BankAmerica Corp. has avoided promotional offerings altogether. Bank spokesman Jeff Hershberger said: "Our site is growing rapidly. We haven't thought it necessary to do a lot of special promotions."

He said the philosophy is to provide convenience and rich services that will attract on their own merit.

Salem Five Cents Savings Bank also eschews giveaways, favoring low pricing as a lure.

Providing on-line banking free with no minimum balance requirement lets customers "test-drive and see how good the product is," said William H. Mitchelson, chairman and chief executive officer of the Massachusetts thrift.

The decision to try on-line banking "comes down to pricing of the product and not necessarily the token gifts," Mr. Mitchelson said.

Salem Five offers some promotions. For example, on-line customers can download a $100 coupon that can be applied to the costs of a mortgage loan.

Other banks see merit in appealing to consumers' wallets. At Citicorp, customers can link to CD-Now to buy CDs at a 5% discount when using the Citibank credit card for purchases. At Fleet PC Banking for Business, customers can get a $50 gift certificate redeemable at Staples Office Superstore.

Atlanta Internet Bank tries to beat on-line competitors with its pricing. Ched Hoover, director of marketing at Atlanta Internet, said on- line banking streamlines comparison shopping, benefiting those with the best rates.

Mr. Hoover said the bank can pay high rates because it does not have the overhead costs associated with regular offices.

"A lot of people are leading with cold, hard cash in the form of discounts or higher interest rates," said Bill Burnham, senior analyst at Piper Jaffray Inc., Minneapolis.

"This may ultimately prove not to be the best way to go about things," he said. "Pricing may attract customers, but services are what keep them."

He said Internet banking users tend to be affluent and pressed for time so that getting five extra basis points on a money-market account "is probably not going to light their fire."

Mr. Burnham called upon banks to be more creative in their quest for repeat traffic and suggested enhancing sites to make users feel like preferred customers. One avenue toward enhancement would be alliances that could lead to hyperlinks to other Web sites.

If banks want to compete on price, they should choose the products that appeal to typical on-line users, such as consumer loans and credit cards.

"Banks are better off offering valuable incentives and benefits that focus on service and enhance customers' relationships," Mr. Burnham said.

He acknowledged that operating successfully in cyberspace requires "a mind-set change for banks."

Cliff Condone, senior analyst in money and technology strategy at Boston-based Forrester Research, said, "Once you get them there through promotions, they will see the value."

This article also appears in American Banker's Web edition.

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