Generating Small Business Revenue through Customer Loyalty Simple

Generating Small Business Revenue through Customer Loyalty Simple ideas to grow business customer relationships between transactions Welcome! We’ll be starting shortly. ® © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Our Discussion LEARN. PARTICIPATE. ENJOY. BENEFIT. Your host, Lori Spangler Think like a small business owner • Focus on small customer needs • Why small businesses select a financial institution • How Deluxe can help you retain and grow small business customers • © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Our Speakers Buck Bierly Founder and President MZ Bierly Consulting, Inc. Russ Belland Director of Small Business Programs Deluxe Corp © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Reactive vs. Proactive Selling Source of Leads Reactive “Walk-ins”, Referrals, Customer requests Sales Process Responding to Requests and Inquiries Customer is motivated to buy. Customer is providing energy to complete purchase. Sales Process Elements Requires product knowledge Focus on product features and benefits Question sequence around use of product Focus on efficient and quality service Little or no follow-up Emphasis on tic marks Some relationship profiling (with little follow-up) Skills Needed Selling on demand Feature and benefit selling Handling high volume of routine transactions Handling complaints Referring as appropriate Time management Basic to good product knowledge Reacting to opportunities presented to you. © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Reactive vs. Proactive Selling Source of Leads Sales Process Elements Sales Process Proactive Selling Proactive Salesperson initiated selling, more sales calls Initial identification of needs Selling additional products to all customers (cross-selling) Relationship profiling Campaigns to targeted groups Follow-up on targeted groups Proactive Focus on wallet share, depth of relationship, creating loyalty, getting first and last look at all opportunities Salesperson creates motivation to buy; salesperson is providing energy to create and close opportunity. Build Long-Term Relationship Campaigns, blitzes, working customers and prospects for additional products Value-added and consultative Salesperson provides value to customers and prospects looking for RQS. Becomes the top-of-mind resource for financial needs. Proactively creating opportunities. Skills Needed Identification of high-potential Establishing and expanding approach Consolidation of relationships Proactive identification of financial business objectives and goals Team selling approach Scheduled relationship reviews Selling multiple products in each sales cycle Clearly differentiated value proposition that matches customer and prospect value system clients Knowledge of full product line More flexible handling of complaints Unfocused prospecting Some business operations and industry specific knowledge relationships Calls on customers and prospects between transactions Focus on current and future needs Identifying value systems and matching with value proposition Advanced product knowledge Industry business knowledge Actively managing referral sources Continuous needs identification © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

A Focus on Building Relationships Professional Practice: 6 -years, $800, 000 in sales Business Owner DDA MMA Web-Based Banking Line of Credit Investments Internet Banking Retirement Equipment Loan/Lease Mortgage SEP HELOC Liability Insurance Term Life Total: 7 © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

A Focus on Building Relationships Business Services Firm: 11 -years, $3, 000 in sales Business Owner DDA MMA Web-Based Banking Aggregation Line of Credit Investments Equipment Loan/Lease Retirement Commercial Mortgage 401(k) HELOC Liability Insurance Term Life Key Man Insurance Buy/Sell Agreement Total: 9 Total: 7 © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Building Relationships: A Defined Process It’s the same for each source – Identify the right businesses – Plan the relationship building process – Execute the plan © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Building Relationship “Loyalty” • Customer loyalty is enhanced when we have multiple product categories installed in a customer relationship – Aim for more than 5. 0 – Customer loyalty may be damaged by excessive “blitzing” or “campaigning” • The quality of relationship is determined by how well we match the customer’s values with our value proposition – Some customer needs may be tangible; some may be intangible – Some customer needs may be explicit; some may be implied © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Focus on Your Top Business Customers © 2009 Deluxe Enterprise Operations, Inc. All rights

Identify the Opportunities Compare what they have with you. © 2009 Deluxe Enterprise Operations,

Identify the Opportunities Compare what they have with you with what they probably have with all their financial service providers. Business Owner DDA MMA Web-Based Banking and Cash Management Web-Based Banking Aggregation Line of Credit Investments Equipment Loan and Lease Retirement Commercial Mortgage 401(k) HELOC Liability Insurance Term Life Key Man Insurance Buy and Sell Agreement Total: 10 © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC. Total: 7

Building Loyalty Value Systems: Business Owners in the Business Banking Segment RQS + Neither = 55. 60% Courtesy of Business Banking Board © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Building Loyalty Value Systems: Business Owners in the Business Banking Segment Relationship/Quality/Service Attributes • Understands what I want and how I operate • Gives me a main contact at the bank • Knows the history of my business • Knows my line of business • Stays responsive to my on-going, changing • Gives me immediate availability on your money • Has convenient locations • Makes my life a little easier • Makes it easy to get to the right person • Enables me to deal with people who are going to be there tomorrow • Helps me avoid spending a lot of time at the bank waiting • Enables me to give added benefits to my employees • Gives me confidence that our funds are secure • Helps me get more back on my money needs • Proactively introduces services that apply to me • Knows me and I know them on a personal level • Has personnel who are well trained • Does not high pressure me into anything • Puts the my needs and interests first Price/Transaction Attributes • Solves my problems promptly • Helps me cut my costs • Is willing to work with me • Doesn't nickel and dime me • Considers me important and valuable • Meets my credit needs • Gives me quick access to©information I need Inc. All rights reserved. Proprietary and Confidential. 2009 Deluxe Enterprise Operations, © • Has developed products and services 2008 -2009 are. BIERLY CONSULTING, INC. that MZ

A Relationship Building Process THE RIGHT VALUE PROPOSITION • A relationship building process demonstrates a value proposition © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

The Right Value Proposition Typical Banker value propositions: • Low-price and low-structure provider – Tell me what you have at your current bank. We’ll beat it. • Service – We’ll be accessible and responsive. You’ll think you’re my only client. • Experience and Expertise – I’ll understand your business, anticipate your needs, and help you navigate through increasingly complex financial choices. . . better than any other banker © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • In the SME market the deposit relationship is “the Relationship” – The majority of businesses in the SME segment do not use business loans – The deposit relationship is key to the banking relationship Courtesy of First Manhattan Consulting Group, October 2007 © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • Without an articulated process for becoming the primary “relationship” bank many banks [and Bankers] are repeating “familiar” behaviors such as: – Leading with loans – Assuming that if they get the loan all else will follow – Asking the same old questions – Selling at a product level © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • It’s not really about deposit “products”. It’s about: – Thoroughly understanding their business and financial operations (the underlying collection, disbursement, and cash cycle) – These “regular reviews” can help you and your client or prospect to identify solutions that can positively impact (optimize) those processes – The result: increased differentiation and loyalty that allows you to improve retention, expansion, and acquisition of relationships © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship Business Operations drive Financial Operations. . . and the underlying processes. In effective relationship-building calls, the banker shifts his thinking to think like the Business Owner. The Business Owner thinks from top to bottom. This requires an adjustment in the question sequence on sales calls. © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship Understanding the cashcycle is a part of the financial operations focus © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship 1. How is the cash-cycle structured today? 2. How will it change as changing business operations change the financial operations? © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

The Competition Gets Mixed Reviews • The competition isn’t meeting the needs of business owners – 57% of businesses have increased their deposit balances in the past 12 months – Only 35% of businesses feel banks do a good job of managing deposits into higher earning assets – Over 50% of businesses cite that their primary bank has not discussed strategies to help them make the best use of cash deposits © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

What Questions Will You Use? Planning the Question Set. . . Demonstrating your Value Proposition 1. Where are you banking? 2. What products are you using? 3. How are they priced and structured? 4. What are two things that you wish your current bank was doing but they’re not? 5. Can I have a copy of your statements to put together an offer of how we would handle your banking relationship? © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

What Questions Will You Use? Planning the Question Set. . . Demonstrating your Value Proposition These are the best questions for retaining, expanding and acquiring relationships with business owners. © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • Identify the Deposit Opportunities in Your Client Base – Review the relationship profiles for your top clients • – Look for current deposit opportunities Identify all clients that have no or limited cash management services with you • Within these relationships, what cash management services are being used at other financial institutions? • Do you have a cash-cycle map for this relationship? • Do you know the one-year and three-year business objectives for this relationship? • How will the business and financial operations change? • Are the current cash management solutions good enough to meet the oneyear and three-year changes? © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • Plan a cash-cycle call for clients where you’ve identified an opportunity – – – Do your homework on the industry and the business Anticipate what their cash cycle looks like, the possible problems and the implications of the problems Use the cash cycle to “lead” the focus of the call Properly frame the call around business and financial operations Ask enough questions to fully understand their business • • • – How they currently manage their payments and cash-cycle How they currently manage their excess cash How needs are likely to change over the next 1, 3 and 5 years Don’t discuss solutions one-at-a-time • • Wait until you have the full picture of their current and future needs Ask for an opportunity to present a full proposal © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • Execute a cash-cycle call. Begin the call with the usual opening, then frame your call with the following value statement: – “As a Relationship Manager I have an opportunity to work with companies in a wide range of industries. Over the years, I’ve found that most companies are well versed in their credit needs but seem less focused on the importance of managing their payments and cash. Time after time, I’ve found that a periodic review of a company’s overall cash cycle can ensure the best possible use of its cash. And, with today’s economic uncertainty, making the best and safest use of those deposits has never been more important. ” – “With your permission, I would like to spend a few minutes exploring three areas: how your payment and disbursement processes are working, how you are managing your cash today and how your cash-cycle may change over the next year or two. ” – “My objective is not to offer you a quick solution but to get a thorough understanding of how you manage your cash. With that information in hand, I may be able to develop some suggestions for optimizing your cash cycle. . . from a safety perspective as well as a best-use-of-your-deposits perspective. ” – “May I ask you a few questions? ” © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • Financial Operation Questions (avoid shortcuts or skipping questions) 1. When you sell your products and services, what are the typical terms you extend to your customers? 2. Typically how do your customers pay you? For example, what percentage of your customers pays with cash? With credit cards? Electronically? Any other? 3. When you receive a bill or invoice from a supplier or vendor, what are the typical payment terms they extend to you? 4. Typically how do you pay your suppliers or vendors? For example, what percentage of your bills are paid by check? With credit cards? Electronically or on-line? Any other? 5. Would you take a few minutes to explain how payments move through your business once you receive them? Who touches the payment, what accounts are used? 6. How do you move your funds from account to account? 7. How much time each week does your staff spend managing your payments and cash? © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • Financial Operation Questions (avoid shortcuts or skipping questions) 8. How about your cash needs for the next 6 to 12 months? Beyond that? 9. As you identify idle cash balances available for interest-earning deposits, what is the most important issue to you, rate or availability? Why? 10. How will that decision affect the way you manage your deposit accounts as your business demands change over the next year? As your business grows? 11. Over the next year will availability of your cash balances be important? Or, can you utilize some portion of those balances in some type of interest-earning strategy? 12. What type of deposit accounts do you currently have in place? With whom? 13. What are the balances? What are the rates? 14. Do you have other deposits or investments in place? With whom? 15. What new deposit products or services have you considered in the past six months? Remote deposit capture, sweep accounts, lock box? 16. Which of these deposit issues would you describe as your highest priority? 17. I have some ideas that might help you resolve that priority. Here’s what I’m thinking… 18. I’d like to help you resolve it. Here are some possible next steps. © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Build Loyalty: The Deposit Relationship • Do you have the whole picture? – Having completed the cash-cycle Review Questions you should be able to map the payment and cash-cycle of the company. Now show it to the client. – Think total relationship: do you see any “better alternatives” than what they are currently using? – How about as the business operations change over the next 1 to 3 years? © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential. © 2008 -2009 MZ BIERLY CONSULTING, INC.

Simply the better way to serve business customers A World-Class Business Program Endorsed by Your Financial Institution ® © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Small Business Trends • Typical business touch points: – Deposit products – Credit products • Retaining customers and strengthening relationships is essential • You can become a valued partner – Deluxe can help © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Deluxe for business Strategies: –Add value to Bank relationship with the small business • Can Deluxe come up with an offer that helps position the bank as more of a business partner with the small business. –Add value to Deluxe relationship with the small business • Become a true marketing partner for the small business • Offer products and services that will allow small businesses to succeed –Help small businesses thrive! Take the business program to the next level © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Deluxe Business Success Kit • A unique Deluxe program that delivers affordable marketing products & services into the hands of business account holders – – • Each Kit includes: – – • Providing them the marketing tools they need to grow & thrive A valuable gift to help them get there Informative materials Ideas Affordable solutions to help your business clients ‘get’ and ‘keep’ customers A $100 Deluxe-sponsored coupon to be used for any business-building product in the Deluxe Idea. Book® Your staff can strengthen relationships and grow loyalty by sharing this value-add with small business customers © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Deluxe Marketing Expertise • We create a relationship with the customer to get them the right product with the right service • Use of proven customer retention strategies – – – • Focus on three primary stages of the customer life cycle – – – • Highly complex segmentation, profiling, and scoring Predictive modeling Multi-variant testing First-time buyers Active two-time buyers Inactive customers Variety of media options – – – Catalogs, solo mailings, multi-mailers Email Outbound phone programs © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Customer Loyalty: Increased Penetration • • • Deluxe Business Advantage® increases the percentage of customers who order checks when referred by their financial institution When Deluxe Business Advantage is used, 50% of new business customers place a check order That’s double what a financial institution would see in a typical financial institution-managed program © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Customer Loyalty: Higher Retention • • Higher customer penetration Increase average order value Increase breadth of products sold Leads referred back to the financial institution © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Customer Loyalty: Increase Average Order • • • Increase average order value Doubles the average order value (compared with traditional financial institution-managed program) When Deluxe takes the initial order from the customer, order value increases by an additional 15 -20% © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Retention Marketing: Win-Win • A win-win for financial institutions and small businesses – DBA increases positive metrics: • Penetration rates • Higher customer retention • Increased order value • Increased products sold • Increased referred leads back to the financial institution – From the first order forward, Deluxe Business Advantage helps you maintain customer loyalty, maximizing revenue *Deluxe 2007 Customer Satisfaction Survey With Deluxe Business Advantage, 88% of customers are likely to purchase again. * © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Your Questions • Feel free to ask your questions now – Enter your question in the field provided on your screen – Ask additional questions by sending an email to deluxefinancialservices@deluxe. com – Within a week, a recording of this session will be posted on www. deluxe. com/dbasimplybetter © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Closing Survey 1. Please rate the value of this web seminar: a. b. c. d. e. 3. . 5 – Excellent 4 – Good 3 – Average 2 – Below Average 1 – Poor Please rate your branch’s experience in using Deluxe Business Advantage®: a. b. c. d. e. 2. 5 – Excellent 4 – Good 3 – Average 2 – Below Average 1 – Poor Please rate your overall experience with today’s seminar (accessing, instructions, polling, ease of following along, etc. ): a. b. c. d. e. 4. 5 – Excellent 4 – Good 3 – Average 2 – Below Average 1 – Poor Please rate your branch’s interest in learning more about MZ Bierly Consulting? a. 5 – Very interested b. 4 – Interested c. 3 – Not sure d. 2 – Not very interested e. 1 – Not interested at all © 2009 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.