6 Best Practices that Increase Check Program Profitability · WHITE PAPER | 6 Best Practices that Increase Check Program Profitability 5. Make their lives easier with mobile and online

6 Best Practices that Increase Check Program Profitability

WHITE PAPER

E-payments have unquestionably transformed the marketplace, making

the concept of a paperless world seem more possible than ever. Yet

for all the dazzle of digital payment modes, checks endure as a viable

payment method for consumers and businesses alike. Every second of

every day, more than $1 million changes hands in America via checks. In

fact, consumers and businesses wrote more than 21 billion checks in 2012,

according to the 2013 Federal Payment Study.

Checks appear to be here to stay for the foreseeable future, so why not

leverage them to your advantage? Is your financial institution maximizing

the profitability of its checking program? Many don’t, either because they

wrongly undervalue the revenue-building power of the enduring check, or

because they simply aren’t sure how to go about tapping its potential.

Deluxe prints 350 million checks every month, plus we support programs

designed to help financial institutions market their checking programs

while streamlining efficiencies. We’ve identified six best practices that can

help financial institutions increase the profitability of their check programs.

Adopting these practices can help banks and credit unions improve branch

efficiency, enhance account holder satisfaction, and increase non-interest

income.

Every second of every day, more than $1 million

changes hands in America via checks.

WHITE PAPER | 6 Best Practices that Increase Check Program Profitability

© Deluxe Enterprise Operations, LLC. All rights reserved. 2

© Deluxe Enterprise Operations, LLC. All rights reserved.


1. Capture newcomers’ first check orders.Our Check Ordering Survey, conducted by Javelin Strategy & Research,

indicates that half of all new account holders don’t order checks when

they open an account. Worse, half of account-opening discussions never

mention the word “checks.”

While your frontline branch staff has multiple priorities during the account-

opening process, the check order rarely finds its way into their list of

considerations – and that’s a missed opportunity. Every time a new account

holder walks out the door without ordering checks, your financial institution

has lost an opportunity for revenue.

By capturing the first-time check orders of new account holders, your

financial institution not only boosts the immediate profitability of fresh

accounts, you also establish the foundation for an on-going check-ordering

and prevent them from going direct through the Sunday ads. This action

also creates a level of engagement that kicks off your onboarding process.

Remember, consumers now have numerous options for ordering checks

other than through their bank. You might think you’re doing them a favor by

ignoring the check order or even suggesting alternatives, but in reality, it’s

more work for them, it eliminates another opportunity to get your account

holder engaged, and you miss out on additional revenue.

Your goal: No one leaves the branch until they’re given the opportunity to

order checks!

Half of all new account holders don’t order checks when they open an account.

3

2. Enhance their choices.Consumers have more choices than ever in virtually every aspect of

their lives. How likely are they to accept limited choices from their check

ordering business? To be successful, a financial institution’s check ordering

program must maximize convenience and freedom of choice for consumers.

Deluxe conducts extensive research on a regular basis to study check

design preferences among consumers. The latest research continues to

show a large gap between what consumers use and what they prefer.

Seventy-two percent of consumers use “plain/conservative” checks, while

only 18 percent say that’s what they prefer. Alternatively, 28 percent of

consumers use a “picture/stylish” design, but 82% say they prefer this type

of design.

Enhance account holder’s options by providing a variety of designs, styles,

and covers, as well as allowing them to choose the shipping options and

discounts they prefer. Creating a choice program gives your branch staff

one more tool to secure check orders, and provides your account holders

with the perception of enhanced value.

Empower staff to offer a variety of discount types, such as half off an initial

order, a free first order, or a free upgrade on check options like monogram,

specialty imprinting, or fonts.


82% of consumers say they prefer a picture/stylish design.



3. Reduce waive losses.Of course, waiving fees and offering discounts comes at a cost to the

financial institution. What’s more, ever-changing regulations and economic

conditions challenge FIs to find new ways to increase revenue while

reducing costs. Deluxe has found that about half of all check order fees

are waived at the FI’s expense. We also learned that 42 percent of your

consumers who use free checks are willing to pay for a design of their

choice.

To capitalize on this, create a waive-reduction program that can help your

FI reduce the costs associated with giving away free checks. One example

is a shipping and handling fee. A shipping and handling fee replaces the

cost of the checks, generates revenue for the FI, yet still allows consumers

to experience the value of free check ordering. Generally, consumers

don’t mind paying a nominal shipping and handling fee for otherwise free

products.

This is a common consumer practice that can pay off for your financial

institution by allowing you to recover a portion of the cost of waiving

check-ordering fees.

42% of your consumers who use free checks would be willing to pay for a design of their choice.



4. Capture and leverage email addresses.Email addresses are valuable to any business, but capturing them can be a

challenge. Capturing email addresses during account enrollment not only

ensures you gather this valuable information, it can allow you to further

enhance the value of your check ordering program.

At Deluxe, we make this easy by doing the work for you. Once you supply

us with the account holder’s email and check order, we’ll use that email

address to provide timely updates on their order.

Then we borrow a page from large online retailers and send customers

email alerts when their checks have printed, shipped, and are delivered.

We even queue up reminders when it’s time to reorder — the average

reorder cycle is 14 months — so your account holders won’t be tempted

to try a direct channel. Even better — we will include a clickable link in the

email that takes the account holder directly to an ordering page already

populated with the details of their last order, making their reordering

process as easy for you as it will be for them.

Send customers email alerts when their checks have printed, shipped, and are delivered.



5. Make their lives easier with mobile and online ordering.The migration to digital channels, mobile and online, is here to stay.

Forrester predicts twice as many consumers will shop for financial

products via mobile this year. Clearly, the conveniences of mobile and

online channels are appealing for a broad demographic of consumers.

Empowering account holders to shop for and order checks through digital

channels can allow you to leverage the digital trend to your advantage

and increase your checking program revenues. Your mobile banking app

should incorporate a feature that allows consumers to reorder with a few

simple taps.

Online channels can expand your program’s reach by allowing consumers

to access check ordering tools from any Internet-enabled device, including

computer, smart phone, and tablet. Integrating this functionality with your

online banking website provides a seamless experience for account holders,

who can place new orders or reorders, securely change their addresses,

and scan your full catalog of checks. Remember, a great online experience

can inspire consumers to make additional purchases — increasing revenue

and improving account holder satisfaction for your financial institution.

Twice as many consumers will shop for financial products via mobile this year.



6. Employ incentives to overcome inertia.The goal of any marketing campaign is to drive consumer behaviors in

the direction you want them to go. Consumer inertia is often the greatest

obstacle to that progress. The array of choices in the marketplace actually

has made inertia more difficult to break through. For consumers, if a choice

works for them, it’s easier to stick with it than to wade through dozens of

other options to find a better one.

Consumers need a reason to escape inertia and incentives are an excellent

solution. Rather than adding another convenient choice to the buffet of

options already laid out before consumers, incentives can make your

choice stand out and appear more appealing. In fact, Deluxe surveyed

consumers about the effectiveness of incentives and found most said

a monetary or interesting incentive could entice them to migrate their

business to online channels. Those who favored incentives also said as

little as $5 would be sufficient.

Once you’ve used incentives to woo consumers to your channel, inertia

can actually work in your favor to keep them in place. Mobile and online

ordering fulfills account holders’ needs for convenience and ease of

ordering, and in the long run it will be much easier for them to continue

reordering checks through your financial institution.

Consumers who favored incentives say as little as $5 would be sufficient.



Conclusion.By capturing more first-time check orders during account enrollment your financial

institution can improve account holder satisfaction, branch efficiency, and noninterest

income. This list isn’t meant to be all-inclusive but it gives you some great options

that other financial institutions are currently using or have been testing.

If you have ideas or if your financial institution has had any successes we haven’t

covered, we’d love to hear from you. Our goal is to help our banks and credit unions

run healthy, profitable check programs that add value to their account holder

relationships.

Listen. Solve. Deliver.

WANT MORE INFORMATION ABOUT THE DELUXE CHECK PROGRAM?

Contact us today.

[email protected]

SEARCHfi.deluxe.com/solutions/consumer-check-program

CALL800.245.6040

...or contact your Deluxe Client Manager


Documents

6 Best Practices that Increase Check Program Profitability · WHITE PAPER | 6 Best Practices that Increase Check Program Profitability 5. Make their lives easier with mobile and online