Ray Hough sounds a little sheepish when he describes one product his distributorship supplies to a bank client. It's not a complex form, a run-of-the-mill office product or even an unusual promotional item. For the bank, though, this critical item is a relationship builder.Hough is talking about dog biscuits. "When a drive-through customer receives an unexpected dog biscuit because there's a dog in the back, all of a sudden it's a touchy-feely relationship," explains Hough, president of distributorship Ray Hough Company Inc., Muse, Pa.
Hough didn't envision selling dog biscuits when he started working for his father's Pittsburgh-area distributorship 29 years ago. But supplying dog treats isn't much different from selling lollipops or Tootsie Rolls (the distributorship provides those, too). Ray Hough Company, which owns small offset presses and bindery equipment, specializes in providing forms management and pick-and-pack services to banks in the mid-Atlantic states.
When the company took over warehousing for a banking client, dog biscuits were part of the package. Hough didn't mind, but he told the client he wanted to supply the biscuits when existing inventory ran out. In the process, he found a promotional products vendor that would imprint the bank's logo on a small bag containing two biscuits. The client didn't bite, so Ray Hough Company supplies standard dog biscuits. Doing so has its advantages, Hough says. "You never hear the dog complain about the flavor," he says.
Coordinating Marketing Campaigns
Providing dog biscuits to pet owners is one way banks are trying to distinguish themselves from competitors in a challenging market. Mergers continue to make big banks bigger, and a variety of financial institutions are chasing the same customers by offering similar products and services.
Helping credit unions stand out from competitors is a strategy that's working for CU ink inc., a Conshohocken, Pa., distributorship that specializes in forms, envelopes and other printing for credit unions. "Small credit unions don't have the time or expertise" to handle marketing campaigns, says Bob Connor, the company's president. But small credit unions and banks offer the same products and services as much larger ones. As a result, CU ink has developed turnkey marketing solutions for credit unions nationwide.
For more than 10 years, Connor's company has offered stock and custom newsletters to clients. The stock newsletter, CU News, is printed on the front and back of one page and includes articles that pertain to most credit unions, as well as trivia and other interesting tidbits. CU ink produces the newsletter quarterly, and credit unions usually mail them to clients with their statements.
Companies wanting to send more personalized marketing messages can hire the distributorship to produce a custom newsletter. More than 50 credit unions nationwide use this service, Connor says. CU ink handles logo development, newsletter design and writing, although some clients supply articles for their newsletters.
Small and medium-sized banks often lack the personnel necessary for coordinated marketing campaigns, Hough says. For that reason, Ray Hough Company partners with a national firm offering marketing campaigns on topics such as direct deposit services and home equity lines of credit. Hough sells banks the exclusive rights to run the program in their market areas. Campaigns include everything from drive-up envelopes and lapel pins to radio scripts and artwork for use in local newspapers. Hough says his clients receive "quality, professionally done" campaigns at "bargain-basement" prices.
Helping financial institutions market themselves seems like a natural niche for distributors with commercial printing knowledge. That doesn't mean marketing pieces are free from regulatory oversight that affects banking forms, however. Hough says regulations can affect how financial institutions promote certain products and may dictate the verbiage used in promotions for those products. (To access guidelines regarding the font size used in credit card fee disclosures, visit www.bankersonline.com/compliance/gurus_cmp050503j.html).
Appreciating the Value of Compliance Forms
Knowing what to say and what not to say on marketing pieces is a natural extension of Ray Hough Company's long-standing interest in selling compliance forms to banks. Hough can rattle off the names of several regulations--identified by number or a single letter--that have undergone changes in the last several months. (For more information, visit www.bankersonline.com and access the "Alphabet Soup" section.)
Ray Hough Company's knowledge of regulations solidifies its relationships with banks. Recently, a bank patron challenged bank employees about the bank's check-clearing policy. The customer wanted to deposit a large check, then withdraw most of the check's funds more quickly than the bank allowed. Frustrated that the bank couldn't cite the relevant regulation to the customer's satisfaction, a bank employee called Hough. Within 10 minutes, he supplied the bank with the exact citation from "Regulation CC" supporting the bank's position.
In addition, Hough advised the bank to determine if the customer had a new account with a relatively small balance. It did. Customers with such accounts who deposit large checks, then demand to withdraw most of the funds, might do so in an attempt to commit fraud. Hough saved his client $8,000 because he strongly encouraged the bank to wait for the deposited $10,000 check to clear before making the funds available. The check never cleared, he says.
Demand for compliance forms has dwindled because of technologies such as electronic forms, Hough says. Usage of common operational forms such as deposit slips is declining, too, because of the rapid surge in online banking, distributors say.
Rich Kwas, credit union division manager at Gemini Forms & Systems Inc., a distributorship headquartered in Rochester, Mich., says his clients continue to make the transition from 2-part continuous receipts to rolls. Many credit unions use thermal rolls, while others opt for 2-part carbonless rolls. To add value to roll products, Kwas has convinced many credit unions to order custom rolls with their logos or co-op advertising messages printed on them. "Credit unions discovered marketing 10 years ago," says Kwas. "Now they've discovered color."
Affordable color, that is. Distributors say banks and credit unions always have been cost-conscious. With interest rates so low, banks "can't spend much money on anything," says Marcus Clements, a sales representative at Global DocuGraphix in Shreveport, La. (The distributorship is based in Lincolnshire, Ill.) Kwas has helped a few clients save money recently by redesigning notices into mailer constructions. The multipurpose mailers are ideal for a variety of notices, including late notices and Non Sufficient Funds notices.
Meanwhile, new and pending legislation continues to impact documents within financial institutions. Kwas says states still are writing laws to implement the federal E-Signature Act signed in October 2000, which makes online transactions legally binding. State regulatory authorities have interpreted the law differently, so the impact on forms varies from state to state, he says.
Financial institutions are among the businesses gearing up for final compliance with the USA PATRIOT Act, effective October 1. Designed to combat money laundering related to terrorism, the act dictates, among other things, the extent to which financial institutions must check the backgrounds of customers. As a result, changes will affect internal procedures, operational forms and possibly signage in branches.
Banks and credit unions continue to make the transition to imaging systems. For Clements, this has meant a change to 6 x 9-inch statement envelopes for mailing imaged statements. The proposed Check Truncation Act likely will stimulate the demand for imaging systems by allowing institutions to transmit images of checks--rather than the paper checks--for processing. The U.S. House version of the legislation is known as the Check Clearing for the 21st Century Act, or "Check 21."
Changing regulations even have created demand for new coin bags, Clements says. The U.S. Mint no longer uses canvas bags, which banks used to package coin deposits. Last year, the Federal Reserve issued standards for plastic bags, and Clements recently has received many requests about the specs, availability and pricing for such bags.
Promotional Products Have Their Place
Financial institutions use common promotional products, including pens, pencils, note pads, calendars, litterbags and many items with patriotic motifs. (For more information, visit www.printsolutionsmag.com and read the June 2003 feature, "Gaining a Promotional Edge in 2 Markets.") Wearables for employees are popular, and some larger credit unions (employee credit unions in particular) operate stores where members can purchase apparel.
In the mid-Atlantic states, Hough has found it difficult to break into the promotional products market, however. Just as banks appreciate his company's forms expertise, they remain loyal to their traditional promotional products vendors, he says.
Kwas has been successful selling promotional products by focusing on special events, such as anniversary celebrations. Although these are one-time affairs, credit unions order wide-ranging items such as balloons, banners, plaques for board members and attendee prizes for celebratory events such as dinner dances, he says. At press time, Kwas was helping a municipal employees' credit union put together a tote bag filled with outdoor-related promotional products such as sunscreen, a beach towel and bubble solution for kids. The credit union will give the bags away at a member event at a water park in September.
Understanding the community in which a bank operates is the key to selling promotional products and more, distributors say. For Clements, this means helping banks promote themselves at high school football games, which are major events in small Texas towns every fall. He has sold miniature footballs and other items tossed into crowds at games.
Katherine House, a freelance writer in Iowa City, Iowa, is
a frequent contributor to Print Solutions. Email us your comments at bholt@printsolutionsmag.com.
