I used Heisig's Remembering the Hanzi to learn the characters and then would practice them in a space repetition system. A few years later I can still write most of them. His method has you create a story and make mental image associations for each character. Eventually you forget the stories over time, but the character usually sticks.
We were introduced to the characters in class and subsequently learned how to write them. So after being introduced to a character I repeated it on paper for a couple of lines. I repeated this exercise from time to time. I also read the stories of the text book out loud and listened to the recording of the texts. But as I've pointed out in my other post, you have to have context to really learn a language. Just the fact that I used several types of learning doesn't mean that they weren't kind of shallow.
The technique you've delineated above certainly sounds like a better approach.