German Bank Says `Show Me The Money’

For all their cost-effectiveness and accountability, incentive-based promotions still operate in a highly regulated – if not outright prohibitive – environment in Germany, where government do-gooders are always looking for ways to protect consumers.

It’s safe to assume that, from a promotion standpoint, what is considered “standard practice” in the U.S. will most likely be verboten in Germany. Coupons, free gifts with purchase, on-pack and in-pack premiums, and many types of sampling efforts – just to name a few tactics – are illegal there.

PROMO has reported on this fact for years, but has also showcased a handful of award-winning German promotions that were both legal and extremely creative, the latter in large part because of the lengths to which local marketers went to get them past the watchful eye of the government. With a little ingenuity, you can do just about anything.

But what if the marketer is a German bank – and not just any bank, but the Deutsche Bundesbank, the central bank of the Federal Republic of Germany? The Bundesbank’s role is to maintain the stability of the euro, and it ensures the orderly execution of domestic and foreign payments.

After years of planning, the euro is now only one year away from making its official debut in Europe. For the past few years, it has existed side-by-side with local currencies in most of the 12 participating “euro countries.” (The U.K., Denmark, and Sweden are staying out of the “Euro Zone” for now.) All trade channels in Europe have been required to post prices, accept payments, and honor drafts, transfers, checks, and credit cards in the new legal tender.

However, with 100,000 tons of hard currency still in circulation in Germany, the Bundesbank is trying to pre-empt the logistical nightmare that may occur should consumers all decide to cash in their change for new notes at the same time when the euro goes into circulation early next year.

Pfennig for Your Thoughts To circumvent that potential problem, the bank recently launched a promotion aimed at getting consumers to dump out their piggy banks and scour their couch cushions, desk drawers, and car floors for any spare change lurking in the dark corners.

“We also wanted money hoarders to bring their money out of hiding,” says Hans Korz, who represents the press office of the Euro Information Center, the government office that acts as liaison between the European Central Bank and the German Bundesbank. “When the euro comes, we are sure there will be a rush,” adds a bank spokesperson.

Bundesbank launched the promotion to coincide with “World Savings Day,” a local tradition aimed at educating children about the importance of saving money. Each October, children are urged to cash in their year’s worth of savings at the local bank. Last year, adults and children alike were encouraged to participate in the decades-old practice, which coincides with Halloween in the U.S. But the incentives were far from scary.

After making their deposits, participants received a special code word that they submitted, along with their name, via postcard or e-mail. The bank then held a drawing to pick a pool of winners for a grand-prize of 10,000 deutsche marks (about $4,300) and 90,000 deutsche marks worth of additional cash giveaways. In all, more than 100 consumers received a prize.

The results were unclear, according to Korz. The bank received 100,000 cards and e-mails from citizens across the country, which proves that the promotion certainly made an impression with consumers. However, “it’s difficult for us to determine how much money was deposited because of the promotion,” says Korz, because the bank ran several simultaneous initiatives with the same goal of getting consumers to cash in their cash, including a national awareness-boosting ad campaign. “We did expect more deposits, but the problem is that consumers are not really thinking seriously about the euro, whose introduction, in their minds, still seems so far away,” says Korz.

Bundesbank will not be deterred from achieving its goals of getting all 100,000 tons of currency deposited in the next 12 months. “We definitely plan to run the promotion again this year,” Korz says. National public service TV and radio spots will also educate consumers about the euro and its implications to Germans.

For those last-minute planners who choose not to cash in their old notes beforehand, there will be a transition period for all of 2002.

The only extra incentive then will be the need to pay bills.