How Investors Benefit From The Bank of Nova Scotia’s Marketing Mastery

Rewards programs and massive advertising blitzes are securing The Bank Of Nova Scotia’s (TSX:BNS)(NYSE:BNS) Canadian operations.

| More on:
The Motley Fool

For most people, including investors, banking is a rather boring type of business, often associated with people in suits counting $20 bills — a sentiment that makes it harder for banks to market themselves to the average consumer. But one of Canada’s top six banks has managed to go above and beyond the competition, putting its name front and center.

I am speaking, of course, of The Bank of Nova Scotia (TSX: BNS)(NYSE: BNS) or, as its marketing department has been hard at work rebranding itself as, Scotiabank.

The Scotiabank logo seems to be just about everywhere these days and I’m not just talking about TV commercials, but in retail stores, kids’ hockey programs, at the movies, and when you watch hockey.

One bank to brand them all

If you have been seeing lots of red (and I don’t mean sobbing rage from Oilers and Jets fans) while watching hockey, no, it isn’t a coincidence as Scotiabank has secured partnership agreements with all seven Canadian teams — showcasing its logo on TV and through other promotions such as NHL team-branded credit cards and other promotion such as the towels given out over the weekend at both the Winnipeg Jets and Vancouver Canuks games. This isn’t new: NHL in Canada is prime promotional real estate, but Bank of Nova Scotia has gone above and beyond its competitors at being seen all the time.

Will that be Canadian Tire cash or Canadian Tire credit?

Here’s where things start to get interesting. Earlier this year, Canadian Tire Corporation (TSX: CTC.A) sold off 20% of its financial services division to Bank of Nova Scotia for $500 million. In the deal, Canadian Tire gets a $2.25 billion safety cushion in available credit financing but, more importantly, it gets cross-promotional opportunities.

We’ve already seen the first wave of what was the expansion of Canadian Tire Money from paper to plastic through a new Bank of Nova Scotia MasterCard. The hope is that customers will be more willing to use a credit card offered by the one bank to rack up more rewards.

Let’s all go to the lobby and get ourselves some credit

This isn’t the first or the last time that Bank of Nova Scotia has created this type of loyalty rewards credit card program. Long before the Canadian Tire program there was the gamble the bank took with Cineplex Odeon Corporation (TSX: CGX) to create the SCENE loyalty program and credit card.

But it wasn’t just a loyalty program that was created but an alternative advertising blitz, with such things as Scotiabank commercials playing before the movie starts to rebranding several Cineplex locations as a Scotiabank Theater. A trend that began in cities such as Vancouver and Toronto has begun to creep into smaller locations such as St. Johns, Saskatoon, and Halifax.

Back to the rewards program, though, this is where the cross-promotion begins to morph into an interconnected entity. Now people can get a Scotiabank SCENE Visa go to a Cineplex theatre and redeem their points at Sportscheck.

It is this type of interconnectedness that is setting Bank of Nova Scotia above its rivals and consumers with no prior association with the bank are reacting positively to the programs. This is important for a bank that is moving to have half of its revenues come from outside the country.

This strategy here at home helps the bank backstop itself in its forays overseas — especially now as its Caribbean operations are floundering and many emerging markets have begun to stagnate, even before the market crash happened earlier this month.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway has no position in any stocks mentioned.

More on Bank Stocks

woman data analyze
Bank Stocks

Best Stocks to Buy in May 2024: TSX Financials Sector

Wondering which TSX financial stocks could see substantial growth in the future? Here are three stocks with BIG upside from…

Read more »

Bank sign on traditional europe building facade
Bank Stocks

2 Canadian Bank Stocks to Watch in May 2024 (They’re Not the Big 5)

Watch National Bank of Canada (TSX:NA) and another top financial closely in May.

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Bank Stocks

How Much Will Toronto-Dominion Bank Pay in Dividends This Year?

This long-term dividend payer could deliver double-digit returns going forward.

Read more »

Dividend Stocks

1 Dividend Stock Down 20% to Buy Right Now

Bank of Nova Scotia is a good income stock that's fairly valued and can deliver solid long-term returns.

Read more »

stock research, analyze data
Bank Stocks

Is Royal Bank of Canada Stock a Buy in 2024?

RBC (TSX:RY) stock looks strong heading into second-quarter earnings, so let's look at what's been happening with the biggest bank.

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Banking on Dividends: 2 Top TSX Bank Stocks With Attractive Yields

These two high-yield TSX bank stocks can help you earn reliable passive income for years to come.

Read more »

Bank Stocks

Is it Too Late to Buy Royal Bank of Canada Stock?

Royal Bank of Canada (TSX:RY) stock is getting hot again, but is it too late to chase this banking beast?

Read more »

Man data analyze
Bank Stocks

1 Bank Stock to Buy Hand Over Fist and 1 to Avoid

Not all Canadian bank stocks fit the bill if you are looking for a healthy combination of growth and dividends.

Read more »