Break into the Financial Market
Though the market is a tough nut to crack, it's well worth the trouble.
Spurred on by the rapid growth of community banks, credit unions and savings and loans companies, many distributors have recently redoubled their efforts to pick up accounts in the lucrative financial market—and they've been well rewarded. The question is, how did they do it?
"Distributors need a lot of patience to get an account with a financial institution," said Randall Hake, president and CEO,
Diamond Business Graphics, Sheboygan, Wis. "It boils down to making sure the account executives soliciting these banks have the internal fortitude to keep after them, since the initial reception won't even be lukewarm."
Jerome Group Executive Vice President Steve Stone also preached patience. Though Hake's and Stone's companies are taking two different sales paths to the same goal—commodities-based versus solutions-based—like Hake, Stone said to be successful in this market it's imperative to look at the big picture. "I admit it is a long-term sell," offered Stone, "but when you're talking about how a bank reengineers its processes and how they do business, you typically have to get a lot more people involved."
Whichever direction a company decides to take, both men agree distributors just getting into the market can expect to spend hours or even years presenting products and services to possible clients before striking a deal. Nevertheless, as Chris McBride, vice president, Paper Express, Troy, Mich., pointed out, "It's worth it because banks use everything imaginable under the sun."
"I compare financial institutions to the health-care industry," explained McBride. "The financial market is a tough market to grow your business in, but if you keep trying and you land a big account, you're going to be very successful."
Hake said over the past five years the financial market has served Diamond so well that it now accounts for 25 percent to 30 percent of the company's total sales. He also added that the financial market has flourished where other markets have declined.
Still, it can be difficult to establish relationships in the financial market. Hake suggested that distributors venturing into this market focus on the "big three"—price, quality and delivery—and remember that they all share equal importance.
"Banks are very price- conscious," Hake said. "They're interested in everything being A-1 quality and that deliveries are on time. But if you give them those things, they won't nickel and dime you to death."
One of the reasons it can take so long to earn an account in the financial market is because banks often sign distributors to contracts lasting up to three years. Also, in many states, formidable, long-established alliances between print suppliers and banking institutions make it difficult for new companies to get involved in the bidding process, Hake explained.
Furthermore, some distributors contend larger banks are concerned about fulfilling diversity spending mandates imposed on them by company lawyers, which leads them to exclude other qualified suppliers.
However, distributors should not be dissuaded by these potential roadblocks. Just as accounts in the financial market take longer to win, they also take longer to lose. "They're pretty loyal once you get them," noted McBride.
In addition to products like statements, receipts and ATM rolls, banks also purchase folders, brochures, loan applications, pass books and money bags. But printed paper products aren't the only products banks need. They're also interested in services like database marketing, e-commerce solutions and promotional products.
"The traditional way of doing business is fine for some companies," said Stone, "but we think progressive companies are looking to reach people in new ways."
While the Jerome Group does offer traditional products like brochures and ID cards, Stone said his company is trying to move away from commodities-based sales and begin offering customers unique services organized around one-to-one marketing opportunities. So far the market has been very receptive.
"We're not that successful when there are other companies who have a niche," said Stone. "We're trying to counter that by offering a unique product."
However, accounts in the financial market aren't sought after simply because they purchase a wide variety of products and services in great demand; they're also sought after because they pay on time and offer numerous avenues to other sales opportunities.
But whether distributors decide to offer commodities-based products, solutions-based products or a combination of the two, experts agree the key to success in the financial market is understanding the client's business and demands.
"You have to understand their businesses and what they're trying to achieve," said Stone. "Unless you understand what they're really trying to accomplish and then work with them to come up with a solution, you're not offering them anything they can't get anywhere else."
Finally, though it may be a difficult market to break into, distributors who have invested the time it takes to be successful in the financial market say that it's worth every effort.
"We feel the financial market is a very good market to be in be-cause it works directly with the public and uses a multitude of forms," said Hake. "As such, financial institutions are high-volume customers, and once you establish a rapport with them, they are very loyal. Basically, they have multiple, multiple transactions with their customers, which means more printing for us."
By Allan Martin Kemler
- Places:
- Sheboygan, Wis.