NEWS OF THE country’s crumbling economy is nothing unexpected at this point. Few even blink at word that the Dow has bottomed out at zero, or that fallen autumn leaves are actually worth more than the dollar now. Instead, many have moved on to making practical, fully reasonable plans for survival, like hunkering down in fallout shelters or starting Mad Max-style motorcycle gangs. Before getting carried away hoarding food, bullets and Parker Brothers products (the only thing worse than an apocalypse is a boring apocalypse), some distributors will be pleased to know there is still economic life in the pre-apocalyptic world. Specifically, many financial institutions are not as doomed as they seem.
STILL STANDING
When asked if banks, given their current monetary problems, would be shying away from promotional products or advertising in general, all three interviewed suppliers had the same answer: “Definitely not.”
“They are going to tighten their belts, but there are things that they absolutely have to do,” said Karen Sherrill, director of marketing for Hixson, Tennessee-based Gold Bond. “When they can’t make loans, and in 2009 it’s going to be tough to make loans, they’ve got to grow their deposits. They’re going to go after deposits, they’re going to focus on the mom and pops and the retail side of banking. They’re going to do whatever they can to hold onto the customers they have,” she added, noting this is actually a good situation for distributors. Given the lower cost of promotional advertising compared to mass-media ventures, as well as how much easier it is to focus on a target demographic, she explained promotional products are exceptionally well-suited to helping banks out of the current economic situation. Good news, certainly, for distributors looking to do something other than finish up their perfect bomb shelter.
Christoph Beyer, CEO of Valley Stream, New York-based LM Accessoires USA, agreed with Sherrill on the push for deposits and further emphasized the importance of customer retention for banks. “I’d say they still want [to], and they have to spend, because with the bad news coming on right now, they have to keep up their reputation,” said Beyer. He mentioned one of the ways banks build positive brand recognition is to reach out directly with promotional items, using products that either carry messages of
reassurance and security or advertise new services.
According to both Sherrill and Beyer, the shift into the retail banking arena, combined with the financial industry’s need for a well-planned public-relations overhaul, has maintained, if not improved, promotional products’ foothold with banks that are struggling. So, while handkerchief-on-a-stick salesmen worldwide are likely wringing their hands with despair, distributors should be optimistic about the lack of total financial ruin.
Pry the vault
“If you’ve been in a bank recently, you’ll realize that over the last 17 years, they’ve become much more sales-focused,” said Sherrill. “They may say, ‘Thank you for your deposit, do you have a savings account with us?’ They are always looking for ways to cross-sell, to sell more deeply.”
In order to help banks employ this selling method, Sherrill recommended distributors use the same strategy. “I really believe when it comes to selling, that once you get your foot in the door and get that first order, it’s a lot easier to go deeper than it is to find another bank,” she suggested. Sherrill has designed a selling guide, available to distributors on Gold Bond’s
Web site, advising how to target specific areas of banking—like mortgage, private or retail—as well as various banking services, like CDs or savings accounts, to help distributors cross-sell efficiently, using the foot in the door to pry open the bank vault, so to speak.
Retail banking, a big area of growth for promotions, and also for cross-sales, ties into another of Sherrill’s main points: the importance of demographics. Citing one of Gold Bond’s specific products, she said, “[Our] piggy banks are great not only to promote savings [accounts], … [but also] kids’ accounts. When you look at the number of little people under the age of 18, it’s a significant population and they have a lot of deposits that some banks don’t think to go after.” With their serious need for retail growth, Sherrill explained banks will be relying more and more on demographic-based strategies.
HELP KEEP THE FAITH
Besides the chase for deposits, the other shift in financial marketing is banking’s increased focus on image repair. Beyer explained, saying banks want to set themselves apart from the financial troubles with a fresh look, and also create a more positive attitude. This is certainly a wise decision on the banks’ part,
considering these days, storing money underneath a mattress feels more secure.
As for product options for brand repair, choices vary depending on the intended end-user and desired message. Beyer offered up his company’s desk clocks as examples of high-selling items that are suitable for private or commercial banking. They’re also useful as thank-you gifts for clients, he noted. Another option Sherrill pointed out was banks often sponsor sporting events and nonprofit fundraisers, both opportunities to build community goodwill. Steve Clarke, Midwest-area sales manager for Midlothian, Texas-based apparel and printed-product supplier Ennis, detailed a third approach in line with banks’ current need to heal brand damage.
The company offers a holiday line of retail-banking items including gift-card and drive-up envelopes, teller receipts, statement enclosures and holiday checks. Clarke said Ennis’ holiday line is not only a way for banks to spread goodwill to their patrons, but also a good method for distributors to get an easy presence inside, for the purpose of cross-selling later on.
Clarke added, in his experience, community-level banks are most interested in buying items that promote a positive image. The least affected by the sub-prime lending crisis, community-level banks are between one and 50 branches in size, and have less than $100 million in assets. Because such banks are relatively better off financially, he
pointed out, they are more open to
spending on promotions.
