Brave New World
In the wake of the Sept. 11 terrorist attacks and recent biological threats, distributors take on new roles for financial market clients.

BY KARA S. CARPENTER

The Sept. 11 terrorist attacks effectively closed New York's financial district for a week, causing a rippling effect among financial firms nationwide. While the Federal Reserve Board and Federal Deposit Insurance Corp. swiftly moved to reassure the public that the banking system would continue to operate smoothly, distributors came to the aid of their financial clients.

On the afternoon of Sept. 11, Eagle Quest Solutions Inc., a 17-year-old distributorship headquartered in Gorham, Maine, initiated a disaster recovery plan for 17 customers-all check processing centers located in the area south of Boston, north of Delaware and east of Harrisburg, Pa. "Based on yesterday's events, as the short and long-term effects on our customers started to become clear, we ended all day-to-day sales and marketing activities and commenced our disaster recovery plan for those customers who are affected both directly and indirectly by this unthinkable catastrophe," Dave Blaisdell, the distributorship's president, announced in a letter to the firm's customers.

"What happened on Sept. 11 affected the financial industry pretty heavily," Blaisdell says. Financial clients, including banks, credit unions and check processing centers, account for 98 percent of the distributorship's sales. It sells ATM supplies, check processing supplies, bank lobby equipment and accessories, magnetic media, standard bank forms, security bags, coin and currency handling supplies, and other items to the financial market. Following the attacks, check processing centers in Lower Manhattan shut down and scrambled to find other offices that could handle their processing loads, Blaisdell says. "Many centers we deal with wound up with a lot of extra work," he says.

Eagle Quest Solutions' disaster recovery plan called for the distributorship to make available 60- to 90-day supplies of mission-critical item processing consumable items within 48 hours. The distributorship checked levels of inventoried items in its 20,000 square feet of warehouse space, then contacted its vendors to order approximately $500,000 in additional supplies. As of 8 a.m. on Sept. 13, the distributorship was prepared to ship those supplies to customers. In addition, Eagle Quest Solutions kept its doors open 24 hours a day, seven days a week, for the next several weeks.

By implementing its disaster recovery plan, Eagle Quest Solutions eliminated the possibility of price gouging and guaranteed that its customers wouldn't have to worry about their banking forms and supplies, Blaisdell said.

New Threat
Just as Americans were beginning the slow crawl back to normalcy following the Sept. 11 attacks, letters containing anthrax spores were discovered on Capitol Hill and at several media outlets.

In October, Eagle Quest Solutions received a call from the FBI regarding an order of document carriers it had supplied to a check processing center. "They asked if we could help them figure out how powder got on the document carriers," Blaisdell says.

The check processing center used the document carriers to hold checks that needed to be reprocessed through its check sorters. When the center's sorter operator opened a new box of carriers, he found white powder inside. Fearing the powder contained anthrax, the check processing center immediately called 9-1-1, quarantined the equipment operator in the sorter room, evacuated its other employees and shut down the facility.

Blaisdell called the manufacturer of the document carrier, but the firm's president-who has made the product for more than 30 years-had no explanation for the powder. The manufacturer questioned his equipment operators, who said they sometimes sprinkled cornstarch on the equipment tracks because the document carrier paper was so thin. Apparently, small amounts of cornstarch settled on the carriers. The check processing center was relieved to learn the powder was harmless, Blaisdell says, but the day-long closure cost it millions of dollars.

"We felt rather badly about the whole thing," Blaisdell says. That night, Eagle Quest Solutions delivered replacement carriers to the check processing center. The distributorship now carefully inspects each order that passes through its warehouse for traces of powder. Similar anthrax scares and hoaxes have occurred at other banks and check processing centers, Blaisdell says.

New Offerings
The day after its anthrax scare, Blaisdell's check processing customer developed a set of policies and procedures for handling mail and other shipments. It established a centralized receiving area, staffed by an employee wearing a facemask, goggles, gloves and a protective gown. After purchasing the entire stock of those items from local drugstores, the check processing center asked Eagle Quest Solutions to begin supplying the items.

After researching the products and manufacturers, the distributorship now offers a variety of facemasks, powder-free surgical gloves, goggles, ear plugs and protective gowns. With the check processing center's permission, the distributorship also has shared the center's new mail policies and procedures with other firms. "Everyone's very sensitive to the issue of anthrax and is doing their due diligence to try to bring as much peace of mind to their workers as possible," Blaisdell says. In response to customer requests, Eagle Quest Solutions also is working to develop online billing services in order to reduce the amount of mail its customers receive.

Armored cars also have fallen victim to anthrax scares and hoaxes, says Chad Falco, manager of Secure Products Corp., an 11-year-old distributorship in Elmhurst, Ill. Secure Products sells coin and currency handling supplies, including tamper-evident bags, coin wrappers, coin bag tags, currency bands and lead seals, to banks and armored car companies. Financial clients, including Citibank and Chicago's LaSalle Bank N.A., account for 60 to 70 percent of the distributorship's sales.

Recently, an armored car crew in Michigan discovered white powder at an ATM it was servicing. The crew shut down the ATM and called the FBI to investigate, Falco says. "The tests were negative for anthrax, but this just reiterated the fact that this is a concern right now," he says. The armored car company quickly alerted others in the area, including one of Secure Products' customers. "When it comes to those issues, the armored cars will talk to each other," Falco says. "They think, 'Even though we're competitors, we're all still family.'"

Fearful of biological threats, the armored car company asked Secure Products to outfit its trucks and facilities with 5,000 hazardous-materials bags to help protect its employees and the public. Employees who find suspicious envelopes, currency or other objects are instructed to place the items in the bags, seal them, then call the proper authorities. Composed of heavy plastic, the permanent self-sealing bags were designed in house by Secure Products. They feature biohazard symbols and the warning, "CAUTION! CONTENTS MAY BE HAZARDOUS! HANDLE WITH CARE!" The bags also include areas for handwritten information, including descriptions of contents, dates and locations where the suspicious items were found, and the names of employees who were involved. "I had a customer tell me that hopefully these bags will never have to be used," Falco says. "But they need to be prepared for that kind of situation."

Although hazardous-materials bags aren't the typical types of products Secure Products provides, Falco is proud to fill this need for his customers. "These bags are a useful tool to everyone," he says. "If we can supply them, then of course we'll make them a part of our business."

Kara S. Carpenter is an assistant editor at Print Solutions. Email her your comments at kcarpenter@PSDA.org.

Serving Community Banks with a Smile

Mike Hosler's distributorship stays competitive in the financial market by focusing on community banks. "Bigger banks attract a lot of people," says Hosler, owner of Mehco Custom Printing & Advertising Specialties, a 19-year-old distributorship in North Ridgeville, Ohio. "They're bombarded by salespeople. Everything they touch goes out for two, three or four bids. There's no loyalty there."

In comparison, Hosler has serviced a community bank in his area for approximately 30 years, starting when he worked for a direct-selling manufacturer. Hosler was first attracted to the market because of the variety of products financial firms use, including counter forms, checks, envelopes, letterhead, promotional products, and personal and bank money orders. Community banks are recession-proof, Hosler says. "Right now, a lot of businesses are hurting, but banks are doing great because everyone's refinancing," he says. He also says banks usually pay their bills on time and call distributors to set up appointments when they need new forms.

Mehco supplies statement forms, checks, wallet envelopes, deposit and withdrawal slips, and more to the community bank's 21 branches. Though competition has been stiff for the bank's business, Mehco succeeds because of its focus on service, Hosler says. "You don't sell the steak, you sell the sizzle," he says. "Through the years, a lot of other people have called up the bank and tried to steal my business or offer lower prices." But once those firms land an order, they don't return, deliver on time or offer quality, he says.

Like many other financial firms, Mehco's community bank client handles its own warehousing and inventory management. Hosler finds other ways to offer value. At trade shows, he scours booths for new banking ideas and products, then presents possibilities to his customer. Hosler knows if the bank isn't interested, they may be a year later. He also strives to offer old-fashioned customer service. "If the bank calls me this afternoon with a problem," he says, "I'm on my way over."

Hosler redesigned all of the bank's checks and other negotiable documents, layering them with security features such as microprinting, chemical-reactive paper, artificial watermarks, fluorescent fibers, bleed-through MICR and consecutive numbering, and custom void pantographs featuring the bank's logo in the background. The features protected the bank from fraud and saved them money, Hosler says. "Their insurance company loved that they had a lot of security features on all of the negotiable documents, so they got a better rate," he says. Each year, Mehco sells the bank approximately 250,000 checks, including dividend checks, expense checks, interest checks, trust document checks and consumer loan checks.

8 Ways to Better Serve Financial Clients

1. Start in your own neighborhood. "If you're going to start out and try to get into the financial market, you need to try to find locally owned banks," says Mike Hosler, owner of Mehco Custom Printing & Advertising Specialties, a 19-year-old distributorship in North Ridgeville, Ohio. Big banks often attract large numbers of salespeople and solicit multiple bids for printing projects, he says.

2. Get to know the financial industry inside and out. Three years ago, when Eagle Quest Solutions Inc., a 17-year-old distributorship headquartered in Gorham, Maine, began focusing on the financial market, its employees attended seminars given by the American Bankers Association. Dave Blaisdell, the distributorship's president, was most impressed by a 3-day course on the ABCs of check processing. "It explained the entire process from the time someone presents a check at a bank to the time it winds up at the Fed; the importance of every aspect of encoding, processing and sorting; and all of the equipment and consumables that work in conjunction with that," he says.

3. Chose clients carefully. "Big banks are generally high-maintenance," says Chad Falco, manager of Secure Products Corp., an 11-year-old distributorship in Elmhurst, Ill. They usually have complex bidding processes, he says. "I received a bid for bags from a bank here in Chicago that was 35 pages long," he says. Such banks often have dedicated purchasing departments and request several bids for each item they need.

4. Ask about obstacles. "Customers are only too happy to sit down and talk to you," Blaisdell says. "Ask, 'What problems do you have?' and, 'What's the biggest obstacle you face on a day-to-day basis?' You'll start to get an idea of where to go with the business."

5. Find the right contact. When calling on banks for security bags, "figure out who's more important to you-the person who's going to be using the bag or the person who's going to be buying the bag," Falco says. "Sometimes they're different people."

6. Bring references. Many distributors are attracted to large financial institutions because of the potential for a variety of large orders. Large banks want distributors to prove they can handle large volumes, Falco says. "They want referrals," he says. "They want to know, 'Who have you worked with that's of our size?'" References don't necessarily have to be other financial institutions, Falco says. When calling on large banks, he references Bed Bath & Beyond, a domestic merchandise and home furnishings store with more than 370 locations nationwide.

7. Know what to expect. Unlike companies that probe distributors for new ideas, many financial clients have been through three or four generations of their products, Falco says. "They know what they want, and a lot of times, they don't want to deviate from that," he says.

8. Act as a stress reliever. "The majority of people we deal with in the financial market are probably at the top of the stress level due to the nature of their business," Blaisdell says. "Everything they do is based on processing checks and getting them to the Fed by either midnight or 2 a.m. They have a very short window to do that." Eagle Quest Solutions does everything it can to reduce that stress, including providing hard-to-get products on the same day, Blaisdell says.