You’ve probably heard the one about the old-school salesman who swore by giving his first product away for free. Does this tactic still work? Every person who visits Costco “for the samples” is a walking testament. Such is the effect of freebies, and the same rule applies when marketing for financial institutions. 

According to Haberfield, a consulting firm interviewed by The Financial Brand, gifts are a must-use tool in marketing financial services. Haberfield has seen financial clients increase new account sales by more than 15 percent, just by offering a complimentary or promotional item. 

With consumer trust low and loyalty down, complimentary offers could make a difference for financial institutions struggling with retention. If it works for Costco, it can work for banks and credit unions, especially those promoting consumer insurance products. 

How to Use Complimentary Offers to Market Insurance 

A complimentary offer is just like it sounds. It’s a no-cost offering for consumers paid for by a bank or credit union. 

When marketing for financial institutions, we primarily use complimentary insurance offers to add value. A great example of this is in marketing AD&D (Accidental Death & Dismemberment Insurance). You can read more about this here

A financial institution might choose to offer a set amount of AD&D insurance, ranging anywhere from $1,000 to $3,000 per consumer. This coverage is then provided as a benefit to the consumer.  

To receive the offer, a consumer needs to hold an account at the bank or be a member of the credit union. A consumer must complete an activation form, through direct mail or digital marketing, to officially enroll and receive coverage. If they want to add supplemental coverage on top of the complimentary offer, they can select this on the activation form at competitive rates. 

Even when insurance is complimentary, it has the upsell built in: 

  • When consumers are marketed $1,000 in complimentary AD&D provided by their bank or credit union, they’re also asked if they’d like to increase their coverage at group rates.  
  • In this instance, a complimentary insurance offer can easily entice them to buy additional products or services. 

For the bank or credit union, a complimentary insurance offer enhances the consumer experience. By providing additional value—the equivalent of a free sample—a no-cost offer helps build relationships by leaving consumers with a positive impression. 

In this way, using a no-cost offer in marketing for financial institutions helps build loyalty. The latest U.S. Retail Banking Satisfaction Study conducted by J.D. Power found that as many as 13 percent of retail bank consumers are considering switching institutions in the next year. Much of this has to do with feeling overcharged. A complimentary offer like AD&D insurance could change perspectives. 

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Why ‘Samples’ Work for 81% of Today’s Consumers 

People click on that 7-day Hulu trial not just to binge-watch—they do it because of something researchers call “the psychology of free.”  

As highlighted in Brand Connections’ recent report, consumers are seeking opportunities to receive free samples wherever and whenever possible. This trend underscores the importance of providing tangible product quality to capture interest. The report showed that 81 percent of consumers liked samples and responded to them better than other marketing methods. 

With the rise of e-commerce and digital marketing channels, consumers have come to expect immediacy and convenience. Marketing for financial institutions in a way that embraces this shift incorporates complimentary offers to give consumers what they’re asking for. It’s a sure strategy to improve retention. 

This aligns with what Haberfield observed in marketing for financial institutions: a return on no-cost offers of more than 15 percent. For Equity Bank, the number rose even higher when they gifted consumers a smart toaster, yielding an increase in new digital account openings of 25 percent. 

In what ways could complimentary offers be used when marketing for financial institutions? Here are a few examples: 

  • Complimentary insurance. By partnering with Franklin Madison, banks and credit unions can offer consumers complimentary AD&D while marketing other types of insurance coverage to increase non-interest income. These might include Life Insurance, Recuperative Care, a Hospital Accident Plan, and more.   
  • Financial education webinars. A financial institution can advertise a no-cost webinar or workshop to help consumers improve financial literacy and make informed decisions. Educational topics could cover budgeting, investing, retirement planning, or homeownership. 
  • Bonus rewards or cashback. Banks and credit unions can introduce incentives, like rewards for setting up direct deposits or maintaining a minimum balance. Orlando CU is giving $250 cash back to new members who activate a credit card and a Rewards Checking account. 
  • Partner promotions. For more local reach, a financial institution can partner with nearby businesses to provide complimentary services or discounts. A local business might be willing to offer a discount on dining or retail items when consumers use an institution’s credit or debit card.  

From a regulatory and legal standpoint, transparency about an offer is key. Banks and credit unions can avoid the “too good to be true” trap by using ads and marketing materials to educate consumers on any exclusions, coverage limitations, and terms and conditions. Working with a company that’s an expert at insurance compliance will bring peace of mind about these issues when marketing for financial institutions.

When done right, complimentary offers can have the Costco effect—drawing crowds and significantly impacting acquisition. Whether it’s complimentary insurance, partner deals, or bonus rewards, the appeal of the freebie remains a potent tool for attracting and retaining consumers.  

Curious About Offering Complimentary Insurance?

Get in touch with the Franklin Madison team today!