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Covid Campers: Banks Put Americans on the Road to Recovery

 

Federal Reserve Chair Jerome H. Powell warned on Tuesday that “the economic road ahead remains long and uncertain with 20 million jobs lost since February, an unemployment rate at the highest level since the Great Depression, and $6.5 trillion in household wealth gone in the first quarter.” The irony here? While more than one in five workers has filed for unemployment, an historic number of individuals, individuals ranging from millennials to the greatest generation, are shelling out upwards of $500,000 for the opportunity to travel that “long and uncertain economic road” in a luxury motor home.

Evidently, Jerome isn’t experiencing the same wanderlust that seems to be driving millions of Americans – roughly 46 million according to surveys – to hit our nation’s highways, byways, 13,000 private RV parks, and estimated 1.23 million individual trailer campgrounds.  It seems that the “road to recovery” is one that many Americans are looking to travel, quite literally… in style.

According to recent research examining consumer interest in Covid-19 travel conducted by data supplier Ipsos, “RV travel and camping is now providing an exponentially appealing vacation option for American families. 46 million Americans plan to take an RV trip in the next 12 months.” Their first stop of their journey? It should be their community bank, in search of financing.

According to RV Industry Association, RV sales in some areas have sped up 170 percent over the same time period last year. Driving some of the sales gains are:

  •   a financial lift from stimulus money
  •   the onset of warmer weather
  •   the need for some sort of vacation break
  •   a move toward early retirement
  •   the opportunities presented by virtual employment
  •   the belief that a personal vehicle (especially one with heated floors, an entertainment system, and multiple bathrooms) is an extremely appealing way to social distance/quarantine, and
  •   a cautious optimism from some that the worst of the pandemic could be over.

Banks are seeing the opportunity to make both secured vehicle loans and unsecured personal loans as this market gathers speed. Do a Google search of the phrase “RV loan” and you’ll see that many banks and non-banks are getting on board the RV bandwagon, spending to stay at the top of an organic search page ranking; USAA, Lightstream/Truist, Lendingtree, and Nerdwallet to name just a few. Many have either added or enhanced existing RV information-dedicated pages to their websites, such as SunTrust’s “RV Trends,” extolling the virtues of RVs, recreational vehicle features, and the benefits of the lifestyle that comes with an RV purchase. Below is a snapshot of rates, terms and minimums from five banks offering RV financing as of May 13.

 

Most RV loans feature repayment terms that range between 10 and 15 years. However, some lenders offer RV loans that stretch out as long as 20 years. There are affordable RVs available today for under $10,000, but the average price of a motor home is much higher, anywhere from $100,000 to $150,000.

These RV loans can generate a fair bit of interest income for lenders. According to 2017 data gathered by thewanderingrv.com – and remember, these numbers were compiled well before the recent spike in sales – “over 200,000 indirect loans were generated at retail locations offering recreational vehicles. These loans totaled $8.4 billion from households purchasing RVs.” 

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers, including ads focused on enhancing your loan portfolio through recreational vehicle financing.  Here are just a few samples:

 

 

 

 

 

 

 

To see more of our work, both print and digital, visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.

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4 Reasons to be in the 41%.

In influcencermarketinghub.com’s “Covid-19 Marketing Ad Spend Report,” we read what we thought was some rather disturbing news. The Cliff Notes version?  Many companies are cutting their ad spending to due to the economic downturn.

There was a silver lining to the cloud, however: “While some companies are hunkering down, merely trying to survive at the moment by reducing their spending wherever possible, the survey showed that one in four companies are set to increase their marketing activities, and 41% intend to make use of the momentum to maintain or increase their presence in the media.” 

Now, that’s some good news. And, we think you need to be one of the 41%. But don’t just take our word for it. Consumers agree. Of 35,000 consumers surveyed, 92% thought that brands should continue to advertise during the COVID-19 crisis; with this caveat. “Consumers believe, however, that it shouldn't be business as usual for marketers and advertisers. 78% think that brands should help them in their daily lives. 75% say that brands should inform people of what they’re doing, and 74% think companies should not exploit the situation.”  So, yes, businesses should continue to advertise, but they must be careful about their messaging at the moment. Marketingcharts made this observation on the subject of downturn messaging. “As marketing messages developed earlier can have a markedly different perception during a time of crisis, the majority of marketing executives say they are somewhat concerned (52%) or very concerned (27%) about making missteps that may harm their brand image.” 

After many, many years in this business, we know at least two things to be true. Number one: Come hard times, the first thing most companies do is cut their ad spending. Number two:  The companies that don’t do that are the ones that will build market share and emerge stronger than they went in. Granted, this may seem counterintuitive, but we believe that there is much truth to this old ad agency adage: “When times are good you should advertise. When times are bad, you must.”

In fact, according to Forbes’ “When a recession comes, don’t stop advertising,” there have been numerous studies dating back to the early 20th Century that point out the advantages of maintaining or even increasing ad budgets during a weaker economy. “Over the years, those advertisers that maintained or grew their ad spending increased sales and market share during the recession and afterwards.”  Kellogg’s in the 1920’s. Toyota in the 1970’s. Pizza Hut in the 1990’s. These are just a few examples of brands that grew market share, by double digits, during a downturn.

There are at least four reasons that we can think of, maybe more, to continue to spend on advertising during a downturn:

  1. You Own It

As your competitors back off because they feel that “it’s just not worth shooting at ducks that aren’t there,” you’re keeping your brand message out there. With 59% of businesses going dark, there’s less media clutter to cut through, giving you more bang for your advertising buck.

  1. You Can Be the Hero

Consumers are worried during a downturn. They’re looking for reassurances, even from the products and services they use.  This is an opportunity for you to be a hero brand, one that’s not just some fair-weather friend, but a reassuring voice, a sign of stability, and a brand that is loyal to its customer base.  In return, they’ll be loyal to you.

  1. The Cost of Media Plummets

A downturn is, for smart investors, a buyer’s market. The cost of media – both print and broadcast – can drop precipitously during recessions. According to a WARC article, “Advertiser exodus to bring sharp media deflation in 2020,”  “traditional media is expected to see costs deflate due to COVID-19, with magazine (-17%), newspaper

(-11.8%), radio (-9.0%) and TV (-5.9%) media costs all predicted to decrease.”

  1. Increased Share of Mind and Market

With an increased share of voice in the market, you’re also increasing your share of mind… which leads to an increased share of market. What, exactly, is share of mind?  Simply put, it’s what remains with the consumer even after they’ve stopped hearing from you. In a study conducted by the Marketing Sciences Institute and reported in The Journal of Advertising’s “The Earning Effects of Marketing Communication Expenditures during Recessions,” the authors noted that “increased ad spending during a recession not only works, but also contributes to financial performance for up to three years in the future, beyond when a recessionary period has ended.”  Spend during a recession and consumers will be thinking about your business long after the downturn is over.

Questions?  Thoughts?  Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; to help you increase your share of mind and with it, share of market. For example, just recently we created ads that focus on how banks can help owners rebuild their small businesses. To see this campaign, both print and digital, along with others, visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.

 

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Small Businesses Will Survive... With Your Help.

In a May 12 article on cpapracticeadvisor.com, ”Small businesses continue to open and rebuild,” Eric Groves, Alignable’s CEO and Co-Founder, says he appreciates “that wonderful can-do attitude entrepreneurs are known for” and feels that “with the ongoing support of their communities, many small business owners will eventually recover and create their new normal.” That optimism is tempered by a somewhat less optimistic closing: “At this point, it’s difficult to estimate how quickly the recovery will occur and where it will happen first, but a full recovery could take at least a few years.” While it’s true that our small businesses can only recover with the support of their communities, it’s going to take more than community support for businesses to recover. It’s going to take the support of their financial institutions.  Is recovery up to the public?  In part.  But, for the most part, it’s up to you, the banker. 

Small businesses are in a tough spot. They can’t wait “a few years.” According to the National Federation of Independent Business (NFIB), as of March 30, “about half of small employers surveyed said that they can survive for no more than two months, and about one-third believe they can remain operational for 3-6 months.”  That clock continues to tick. So, as a financial institution, how can you help your small business customers begin to fast track their recovery?

First, the obvious, which everyone has been talking about non-stop for the last three months:  Be there for your customers.  The small business owners who bank with you rely on you. Make sure they know that you’re there for them.

Second, be armed with tangible solutions. Banks are creating and offering online resources via their websites and webinars, that can assist small business owners in navigating what will very hopefully soon be a post covid-19 business environment.  Early on, banks and associations such as the Missouri Bankers Association, and Citizens Bank of Edmond with their participation in PPP.Bank, stepped up to offer guidance to small businesses, via websites and conference calls, on how to navigate the Paycheck Protection Program loan application and forgiveness processes. Now that we’re moving beyond PPP, what message should these institutions be putting out to their small business customers?

Financial institutions might take a page out of the Kansas City SourceLink playbook. The organization is dedicated to “connecting entrepreneurs to resources, coaches, funding, and education” and invites small business owners to explore their programs… resources that cover topics such as cash flow, cash management, and disaster relief funds. The site offers links to small business resources, such as the Missouri SBDC, Kansas SBDC, Women’s Business Center,  Small Business Owners’ Guide to the CARES Act, and SCORE

SCORE (Service Core of Retired Executives), by many accounts, is a resource that banks should recommend to their small business customers who are in need of guidance. Business News Daily lists the eight factors that lenders consider when making small business loans.  Among credit, business plan, and cash flow, lenders also consider whether or not the applicant has sought expert advice. “When you apply for a business loan, lenders want to see that you've sought guidance from knowledgeable advisors. Accountants can be an important source of advice for small business owners, according to Stephen Sheinbaum, CEO of Circadian Funding ‘but there are many other places to find good people to talk to, such as SCORE, a free mentoring service that is supported by the Small Business Administration.’

 In partnership with the Small Business Administration (SBA), SCORE offers small businesses access to mentors who can offer guidance and resources as you look to build—or rebuild—your business after the crisis. Remote mentoring services are available, along with free webinars that address coronavirus-specific issues.

 So, what can banks be telling their small business owners right now?  Here are some steps your customers should be taking right now with a view toward recovery:

  1. Assess the damage by looking hard at P/L and cash flow statements
  2. Re-evaluate their business plan
  3. Research any and all state and federally mandated lending and assistance programs
  4. Research other sources of funding such as SBA 7 (a) loans and lines of credit
  5. Plan for what could be a very long recovery and, most importantly,
  6. Seek professional guidance

 Of course, that primary source of “professional guidance” is you, their banker. It goes back to what we said earlier: Be there for your customers.  The small business owners who bank with you rely on you. Make sure they know that you’re there for them. The fact is, while we’d all like to believe that the worst is behind us, it may not be and it’s important that your small business customers be prepared – as best they can be – for whatever the future holds.

For more information on how BankMarketingCenter.com can help you with communicating vital information to your customers – for example, with our ads focused on rebuilding small businesses – visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.

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Brace Yourself for a PPP Loan Forgiveness Frenzy

Let’s start with a seemingly off-the-wall question: What’s the Transitive Law in mathematics?  Why?  Well, contemplate this equation from page 7 of the SBA’s 11-page PPP Loan Forgiveness application:

  1. Enter the annual salary or hourly wage as of February 15, 2020: ______________. b. Enter the average annual salary or hourly wage between February 15, 2020 and April 26, 2020: ______________. If 2.b. is equal to or greater than 2.a., skip to Step 3. Otherwise, proceed to 2.c. c. Enter the average annual salary or hourly wage as of June 30, 2020: ______________. If 2.c. is equal to or greater than 2.a., the Salary/Hourly Wage Reduction Safe Harbor has been met – enter zero in the column above box 3 for that employee. Otherwise proceed to Step 3.

This is just one example of many. It’s no wonder that bankers are more than a bit concerned about what the loan forgiveness future may hold for their institutions, given the complexities and uncertainties that have haunted this program from the beginning. With roughly 4.4 million PPP loans processed for a total of nearly $515 billion, banks need to prepare for what could be a forgiveness frenzy.

In a May 22 article in Bloomberg, “Millions of PPP loan forgiveness requests are about to rain on banks,” several industry leaders alluded to just a few of what they see as the challenges ahead:

“The document is complex, so it will fall to lenders to help borrowers complete it. I would equate this to just as heavy if not a heavier lift to processing the loans themselves. For most lending businesses, you may be doing this full-time for no revenue.” -   Libby Morris, Head of U.S. Operations, Funding Circle Holdings Plc.

In a May 22 article in Bloomberg, “Millions of PPP loan forgiveness requests are about to rain on banks,” several industry leaders alluded to just a few of what they see as the challenges ahead:

“The document is complex, so it will fall to lenders to help borrowers complete it. I would equate this to just as heavy if not a heavier lift to processing the loans themselves. For most lending businesses, you may be doing this full-time for no revenue.” -   Libby Morris, Head of U.S. Operations, Funding Circle Holdings Plc.

“Businesses are still looking for clarity on whether employee bonuses and some health insurance and retirement plans count as payroll.”  -   Joan Vines, a Managing Director at BDO USA LLP

“Many businesses may find they fail to meet SBA terms for forgiveness, which will leave banks with loans to service and customer issues to resolve.”  -   Josh Knauer, General Partner, JumpScale

“Hopefully it doesn’t all come at one time and we can stagger it over a period of time, but I do believe there’s going to be a lot of hand-holding associated with it.” -   Ira Robbins, CEO, Valley National Bancorp

Here is what your PPP loan borrowers are up against; unclear, shifting guidelines and definitions, as well as a daunting, 11-page PPP Loan Forgiveness Application that makes a 1040 return look like a third grade social studies quiz. The SBA also makes it clear in this application that while all borrowers are “eligible,” there is no guarantee that a request will be granted.

Where does this leave lenders? According to Knauer, lenders will have “a massive customer-relations problem with the companies they’re lending to. More time will have to be spent on the phone, more audits are going to have to be done, with a lot of digging into every single line item of expense.”  And Robbins predicts that his bank will need to commit as many employees – 500 out of 3,200 – to deal with forgiveness requests as were needed to process the loans.

Forward-thinking institutions are doing just that; thinking forward and taking a proactive approach to the processing of PPP loan forgiveness requests. These banks are marketing advisory services early in the application process with a view to avoiding, as Knauer puts it, “a massive customer relations problem.”

The marketing communication materials offered by BankMarketingCenter.com can help banks get a message out to borrowers that will stem the forgiveness frenzy tide. First of all, it’s essential that institutions continue to guide their PPP borrowers down the road of forgiveness with frequent reminders of the forgiveness guidelines, which are:

  • Track all transactions for which PPP funds are used and keep all related receipts
  • Keep accurate payroll records so you can show that at least 75% of your loan went to payroll costs. (PS: As of this writing, Congress is considering revising the 75% to 50%. According to Forbes Magazine’s, Good News For Small Businesses: Congress Could Extend PPP Loan Forgiveness Period,” there is enough support in Congress to extend the eight-week period that Paycheck Protection Program loan recipients have to use the money, as well as relaxing the 75 percent payroll requirement.”
  • Keep accurate non-payroll covered expenses, such as payment of interest on mortgage, rents on leasing agreements, and payments for utilities.

Secondly, institutions need to get ahead of the forgiveness process confusion with messaging that helps their borrowers complete their applications. That message could center around a webinar, for instance, that reviews the process guidelines and takes borrowers through their forgiveness application.  It might also, as in the case with the Illinois Bankers Association, tout a partnership with a third-party “forgiveness solution” provider, as recently announced by the association: “After evaluating a number of solutions, the Illinois Bankers Business Services Board has chosen to partner with Abrigo and their PPP Forgiveness & Administration solution… which manages the full lifecycle of the PPP loan, from loan forgiveness calculations to auto-populating Form 3508.”

The forgiveness process is a complex one, but the program will hopefully provide businesses with the funding they need to stay afloat. Is it all worth it, in the end?  Even the SBA seems uncertain. In its Rules and Regulations document, the association offers this assessment: “We anticipate that this rule will result in substantial benefits to small businesses, their employees, and the communities they serve. However, we lack data to estimate the effects of this rule.”



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Their Credit Needs Protection, Too.

About 33 million Americans have filed jobless claims since mid-March. The unemployment rate has skyrocketed to nearly 15 percent, the highest level since the Great Depression, and the U.S. workforce has lost an unprecedented 36.5 million jobs. According to a Fidelity Investments study on Market Sentiment, nearly half of those surveyed said that because the of the demands of work (or looking for work), and home (with social distancing, children at home, etc.), they have not dedicated any time whatsoever to addressing their financial futures. That’s changing, however, as the Covid-19 threat appears to ebb, and Americans begin to focus on a much more optimistic future. 

In “Should I care about my credit score during Covid-19,” author Taylor Moore on nextadvisor.com says, “With unemployment rates at a historic high and a contagious virus on the rampage, it may seem frivolous to think about managing one's credit score at a time like this, but it’s an important component of your financial health that will follow you past the pandemic and into the future. And right now, there’s a lot of confusion about what gets counted in your credit history.”  The phrase “a lot of confusion” could be considered a real understatement, given the amount of confusing, and often conflicting, information regarding credit score management and reporting. As bankers, it’s critical that we, of course, continue to be that expert advisor to our customers, providing them with much-needed financial products and services.

One of those critical services is guidance, especially at this moment, in managing their credit. How should you advise them and, hopefully, bring some clarity to what they’ve seen and heard?  Here are a few things:  

  1. Monitoring credit closely: Free weekly credit reports are now being made available by the major reporting agencies and can be accessed simply by visiting AnnualCreditReport.com. Whether or not they’ve missed any payments, staying on top of credit reports and scores is always a good idea. Should inaccurate information be found – in the case, for instance, of fraud or identity theft – actions can be taken in a timely manner to limit exposure.
  2. Prioritizing debt: According to US News, this starts with “taking advantage of the CARES Act and the temporary credit score protection offered to those who are unable to make their minimum monthly payments.” If their accounts are currently in good standing, your customers can ask their lenders for payment accommodations. Then, if they can pay some of their bills but not all of them, they should prioritize based on the two different types: secured and unsecured. Paying secured debts first, i.e. mortgage and auto, ensures that they do not lose their home or vehicle.
  3. Making every effort to make payments on time: While it may get difficult, it’s best to make at least a minimum debt payment by its due date every month. Credit scores are greatly impacted by late or missed payments. If your customers hope to emerge on the other end of this crisis with a credit score that will serve them well, they should make every attempt to maintain on-time repayment even if they’re only paying the minimum amount. 

Conclusion

When it comes to important matters that can have a long-lasting impact on such things as credit, financial institutions have not just an opportunity, but a responsibility to keep their customers informed. Take this opportunity to be the trusted advisor that your customers need.

For more information on how BankMarketingCenter.com can help you with communicating vital information to your customers – for example, with our ads focused on credit score management during Covid-19 – visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.

 

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Banker Action Figures? You Never Know…

With more than 80,000 people dead and nearly 35 million out of a job, America is desperate for some good news. 

According to an April 17 McKinsey & Company article, “A leader’s guide: Communicating with teams, stakeholders, and communities during COVID-19,” crises can produce great leaders and communicators, those whose words and actions comfort in the present, restore faith in the long term, and are remembered long after the crisis has been quelled.”  The same, of course, can be said not just of leaders and communicators, but companies and brands.

What’s a great example of a brand “that will be remembered long after the crisis”? Mattel, for its Play It Forward program.

Mattel is “playing it forward” with a new set of “Thank You Heroes” that celebrate the selfless courage of essential workers and first responders. According to the company’s website: “We're talking about those brave souls who carry on doing their jobs despite the risks in order to keep the rest of us safe, secure and healthy. We salute these heroes, and we think they're pretty amazing role models for kids. Let's play their heroism forward by lending a helping hand and sharing a little gratitude.” With each online action figure of the #ThankYouHeroes Collection sold, $15 is donated to FirstRespondersFirst, a fund dedicated to providing essential supplies, equipment and resources for frontline healthcare workers and their families. In another recent promotion, Mattel donated one Barbie Career Collection doll for every doll sold to the First Responder’s Children Foundation, which to date has:

  • Funded more than 11,000 hotel room nights for first responders who couldn’t go home
  • Awarded more than $1 million in immediate grants to hundreds of first responders with financial hardship due to COVID-19.
  • Distributed more than 100,000 FDA certified, surgical grade masks to first responders
  • Paid for funerals of first responders who have died from COVID-19, and
  • Continues a 19-year mission funding college scholarships that benefit children of first responder parents killed or injured in the line of duty.

But Mattel’s roster of superheroes may not be complete.  And here are just a couple of examples.

Like all community banks, Jill Castillas Citizens Bank of Edmond is doing its best to ensure the safety of customers, while taking some innovative steps to maintain the level of service that customers need and deserve. In order to encourage drive-thru use and make it work, the team at Citizens Bank of Edmond “came together and adopted a Chick-fil-A mentality,” Castilla says, “where we use walkie-talkies and tool belts and try to assist customers with our drive through.” With the bank’s new curbside service, customers can actually go on the bank’s website and make an appointment for a particular service, which they can then transact in the bank’s parking lot. “You can not only select the service you need with the day and time, but can also request a particular employee with whom you’d like to meet.”  The bank is also offering limited lobby service by adopting the “restaurant-style” use of buzzers that alert customers to when they can enter the lobby.  One of the beauties of the buzzer system is that, according to Castilla, “the buzzers travel far enough that a customer can visit a downtown shop or restaurant while waiting!” 

And then there’s Zach Turner, who manages the Regions Bank in Ooltewah, Tennessee where as recounted in American Banker’s “Coronavirus through the eyes of front-line bankers,” his bank was faced not just with a pandemic and an economic crisis, but a natural disaster, as well. “As if a global pandemic wasn’t enough of a challenge, seven tornadoes hit the Tennessee Valley in mid-April. Bankers and customers alike faced ruined infrastructure and internet and power outages. Once Turner’s branch got back up and running, his team pivoted to helping customers handle large insurance payments related to the natural disaster.”

As Dave Martin pointed out in his American Banker article, “many banks are deferring payments, lowering rates and often providing additional financing (at extremely low rates) for customers to be able pay the money owed to their own suppliers, for example. These efforts were not brought on by a government edict. In a time in which days matter — and government agencies take weeks to respond — the nations’ banks are standing among the economy’s first responders.”

Do you think Mattel might add a community banker to their action figure collection?  We think they should.  What do you think?

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How the Paycheck Protection Program showed the True Worth of Community Banks.

It took a vicious virus and the Paycheck Protection Program (PPP) to show the American people the true worth of Community Banks. Yes, the Bank of Americas of the world do have more technology, more branches, more marketing muscle, more ATMs, and more employees. But, the Community Banks seemed to have a passion for taking care of their customers and their local community that, frankly, seemed a bit lacking on the big bank front.

I know many, if not most, of these community bankers worked all during Easter weekend to help their local businesses apply for what turned out to be, of course, extremely limited (and competitively-sought-after) PPP funding. They worked from home, many hours day and night, to protect their customers and their community. Their efforts paid off. Rob Nichols, CEO of the American Bankers Association, reported a couple of weeks ago that 60 percent of the PPP loans made to date have been made by community banks throughout the country.

I know someone who has been a customer of Bank of American for 35 years. They were not so fortunate.

On April 3rd, at 8:00 am, on the opening day for PPP applications, they called and emailed their “BOA, Small Business Banker” asking about how they should apply for the PPP.  A couple of hours later they received an email saying “Please go to www.bankofamerica.com/sbresources to apply, the site is live.”

When they went to the site, it said they had to have a “pre-existing business lending and business deposit relationship with BOA”.

Fortunately, or in this case unfortunately, they have no debt. And by this time, their BOA Small Business Banker’s voice mail was full and she wasn’t returning emails. 

On Monday, April 6th, after a national outcry from angry customers, Bank of America had reversed its ridiculous decision and would allow businesses to apply if they had a “Small Business checking account opened no later than February 15, 2020, and do not have a business credit or borrowing relationship with another bank.” Within minutes they applied and received an email stating “Your application has been submitted”. 

On Thursday, April 8th, they received a phone call from an individual stating that they were with Bank of America and wanted to confirm that they had uploaded their documents for the PPP.  The BOA representative wasn’t even able to access the files and had no idea what had been uploaded.

A week later, on April 15th, they received an email from BOA stating, “We need additional information to process your Paycheck Protection Program Application. After logging in you'll be prompted to update your business information.”

Guess what? There was no prompt and no help button. And obviously no one to speak with. In multiple places on their emails and website they state: “Any communication about the process and your loan will occur through your IntraLinks workspace OR via a call from our underwriting centers. Bank representatives are unable to discuss eligibility with Applicants or assist Applicants in competing the application materials.”

After hearing about how many community bankers worked over Easter weekend and how many PPP loans the community banks were making, they contacted a local community bank, Signature Bank in Sandy Springs, GA. They spoke with a real person and were told exactly what they needed to do.  In less than 24 hours they received an email from Signature Bank that their PPP loan request had been approved!

They have yet to hear from Bank of America and don’t even expect to.

I don’t think BOA ever intended to make PPP loans to customers that didn’t have loans with them. They just changed their website to make it look that way. It became obvious that BOA was not in business to help the local small businesses. And that’s not just my opinion. It’s also the opinion expressed by the Wall Street Journal in their April 6 article, “Big Banks Favor Certain Customers in $350 Billion Small-Business Loan Program”.  According to The Journal, many applications were denied because the applicant “hadn’t borrowed from BOA in the past.”

To be fair to BOA, they were not the only big bank that found themselves tripping over their own feet over the last couple of months. In an Alignable article by Eric Groves entitled, “JP Morgan Chase turns it’s back on Small Business Clients,” Groves points out that “Chase decided to serve the needs of larger clients while ignoring small business owners when they needed this financial powerhouse the most. Clients were told they should not open up applications with other financial institutions if they were going to submit with Chase. The bank then processed only 27,307 loan applications to reach a whopping total of $14 billion in CARES Act Relief. Their average loan size was over $500,0000, generating over $200,000,000 in processing fees for themselves.”

Our company, BankMarketingCenter.com, works with over 250 community banks and I am so proud of all of them. They have shown their true worth during this economic crisis. Cheers! The secret now is for these community banks is to make sure they supply these small businesses with all the products and services offered by the larger banks, including remote deposit capture, mobile banking, and payroll services. They also need to continue to do a good job of messaging; letting their customers know that they appreciate them, and that they are there for them with the assistance they need right now, from loans to investment products.

As the saying goes, sometimes you have to get sick in order to feel better. What this crisis has shown, through a sickness in both health and wealth, is that community banks, and community bankers, really care.  Congratulations on a job well done!

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66% of You will Fail this Test.

It’s a financial literacy test, and a full 66% of Americans cannot answer more than 3 out of 5 questions correctly.

April is Financial Literacy Month, a time when we recognize the importance of financial literacy and how we are doing at this as Americans. If you recall, we discussed this just about a year ago in our blog “Financial Literacy becomes Required Subject.”

So, what has changed since then?  On March 11, 2020, according to the World Health Organization, the Coronavirus Disease 2019 (COVID-19) officially reached pandemic status. Families across the globe are now faced with a crisis unlike any in their lifetimes. A crisis not only of health, but also of financial wellbeing. As you can imagine, there is no better time than the coming months to talk about financial literacy and the importance of sound financial management.

This is a tremendous opportunity for financial institutions. In order to properly prepare our children for the huge leap into adulthood it is imperative they are equipped with tools to properly manage their money, obtain and maintain credit, plan for their future savings, budget their expenses, and much more. Who are the parents of those children so in need of an education in how to manage money?  Your customers.

According to the Council for Economic Education, fewer than a third of the high schools in the U.S. require high school students to take a personal finance class in order to graduate. And one in five 15-year-olds in the U.S. lacks basic financial literacy, according to the Program for International Student Assessment, as outlined in a US News and World Report article, 8 Scary Financial Statistics and How to Avoid Becoming One. Concepts such as student loans, interest rates, qualifying for a mortgage, credit, and balancing a checkbook are proving to be foreign concepts to many Americans. Recent studies show that “Americans demonstrate relatively low levels of financial literacy and have difficulty applying financial decision-making skills to real life situations. Study participants were asked five questions covering aspects of economics and finance encountered in everyday life. In the U.S., 66% are unable to answer more than three of the five questions correctly” – a worrisome figure!

What happens when young people do not achieve a good foundational understanding of money management?  They become the elderly Americans who are not prepared for retirement, of which there is an absolutely staggering number. According to a pre-Covid 19 survey done by the Federal Reserve Board, around 40% of U.S. adults do not have enough money in their savings account to cover a $400 emergency or household expense.  That financial situation has, unfortunately, worsened for many Americans.

Given the uncertain economic times we now face, and we could face tough times for quite some time, it’s critical that young people know how to earn, save, invest, and spend their money.  And as a financial institution, the lessons you help their parents teach will benefit them (your customers), their children (your future customers) and, therefore, your bottom line. By providing your customers with just a few of the basic tools and guidelines they need to educate their children in financial literacy, you can enhance your brand image while helping your future customers better understand, and value, the products and services you offer.

For more information on how BankMarketingCenter.com can help your bank with messaging that stresses the importance of financial literacy in a Covid-19 world, contact Neal Reynolds at 678-528-6688 or nreynolds@bankmarketingcenter.com

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Get Your Message Out.

Financial institutions have a tremendous responsibility, now and in the coming months. Because right now, your customers are engaged in the financial struggle of their lives.  According to the 2019 U.S. Financial Health Pulse report, less than 30% of Americans are considered financially healthy enough to get through a single month on their savings.  When asked about their financial status, 54% reported “struggling” and nearly 20% described themselves as “vulnerable.” And, sadly, that survey was conducted even before Covid-19 swept the nation.

Your customers need your assistance. They need your assurance.  As their financial institution, what is your message going to be? Here is some of the messaging we’ve created for our banks, which they in turn have put to good use reaching out to their customers.

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CARES Act Loans now available

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn.  But with 35 million small businesses in the US, these loan dollars will be distributed quickly. Make sure that your small business owner customers know about this opportunity!

Client Spotlight: Equitable Bank

Alison Larson, Vice President, Marketing Director at Equitable Bank, needed new creative that she could use to let her customers know about SBA Loans that could be available to small businesses. She was able to customize our “Coronavirus SBA Loan - Shot In The Arm” layout to perfectly match her bank's brand and get the message out to her customers via social media.

"That particular one I added to LinkedIn with some links to content I thought our small businesses might be interested in. I may add it to Facebook, too."       - Alison Larson

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They’re Safe. And So Is Their Money.

Customers are still very concerned about their safety… and the safety of their accounts and investments. Provide them with the peace of mind they need with messaging that assures them that you’re taking the necessary steps to ensure both their personal health… and wealth.

Client Spotlight: Lifestore Bank

April Hartzog, Marketing and Process Coordinator at Lifestore Bank, wanted to guide her customers in alternative ways that they could still access her bank's services. She was able to easily customize our “Coronavirus - You Don’t Have to Walk In” layout to focus on online and mobile banking, and even included steps to make it easier for her customers to get started.

"I really appreciate the groundwork being done already by Bank Marketing Center. As the only person creating marketing and communication pieces for our bank and updating the website with current information, I just did not have time to create anything from scratch. It was fast and easy to find a layout that worked and to edit it.”           - April Hartzog

 Client Spotlight: American Nation Bank

Kevin Butler, Executive Vice President at American Nation Bank, decided to go in a different direction giving his customers peace of mind during unpredictable times. He needed to create content that reflected what his community needs right now. He was able to customize our "Coronavirus - Economic Stimulus” layout to focus on his bank’s payment deferment options so that customers seeking financial relief knew what actions they could take immediately. 

"We are in a constantly changing environment. New government programs along with waiting for guidance from the government as to how to implement them are a struggle. Yet we need to be united in our message as to the overall strength and stability of our banking system. We need to encourage calmness in a time of stress."  - Kevin Butler

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Signs of the Times… Unfortunately.

Closing branch offices? Let customers know with closure signs that are quick and easy to customize and print in whatever quantity you need.

Client Spotlight: United Republic Bank

Amy Keltner, Executive Assistant & Marketing at United Republic Bank, needed to quickly inform her customers of a temporary Saturday closure of the bank's lobby without spending too much time developing content. She was able to customize our “Coronavirus Closing - Temporary Closure” layout to inform her customers about alternative ways they could still access their accounts and bank services.

"During this ever busy and mind-boggling time in keeping things going, it is great to have these various templates and not having to create the wheel but just make it your own.”         - Amy Keltner

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For more information on how BankMarketingCenter.com can help your bank with the critical messaging needed during this Covid-19 crisis, contact Neal Reynolds at 678-528-6688 or nreynolds@bankmarketingcenter.com

 

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Leading your Institution in a Time of Crisis

On March 11, 2020, according to the World Health Organization, the Coronavirus Disease 2019 (COVID-19) officially reached pandemic status. Corporations, and their leadership, are now faced with a crisis unlike any in our lifetimes. Even the challenges presented by the 9/11 attacks, as devastating as they were, do not equal those faced by America’s business leaders today.

What are the most important characteristics of good leadership in a crisis? Credibility, transparency, and visibility. These may not be all of what’s needed, but they’re certainly in the top ten.

What the leaders of financial institutions must do right now is respond in the way Mayor Giuliani did in the wake of the 9/11 attacks. In Paul Argenti’s Harvard Business Review article Crisis Communications: Lessons from 9/11, he describes Giuliani’s response, now legendary. “New York City Mayor Rudolph Giuliani arrived at the World Trade Center within minutes of the first attack to take charge of the rescue operation. In the days and weeks that followed, he would conduct several press conferences in the vicinity of the destroyed towers, attend many funerals and memorial services, and maintain what seemed like a ubiquitous presence in the city. His visibility, combined with his decisiveness, candor, and compassion, lifted the spirits of all New Yorkers—indeed, of all Americans.” 

The challenge you face now is different and, in many ways, tougher. 9/11 did not create the isolation that we’re experiencing with Covid-19. Predictions have the unemployment rate at 20%, and businesses are closing, complete industries are shutting down. Groceries and medications are in short supply. Schools and daycare centers are closed, leaving many parents to not only try to maintain a household in a tough economy, but care for their children, as well.

If ever there were a time when you should be making use of every social messaging tool you have, this is it.  Keep your members and customers abreast of the important developments that are occurring every day, as well as the products and services that you can offer to help. And use every available tactic to do so:  social posting, advertising, newsletters, email and direct mail. Some institutions are even holding live stream town hall meetings for those who bank with them, giving leaders an opportunity to literally converse with stakeholders.

Financial institutions have a responsibility to keep their customers and members, as well as their families, informed… and more. You also have the opportunity to instill the confidence, optimism, and a sense of shared goals that people desperately need at this moment.

For more information on how BankMarketingCenter.com can help your institution with communicating vital information to both your customers and your associates regarding the Covid-19 crisis, visit www.bankmarketingcenter.com, or contact Neal Reynolds by phone at 678-528-6688 or by email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.