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Banking On The Brand

By Arn Bernstein

Commerce Bank depends on logoed merchandise to spread its brand message to customers. Here's an inside look at how a company smartly integrates promotional products into its overall marketing mix.

Call them giveaways, promotional products, or imprinted merchandise, but whatever you do, don't call the millions of items Commerce Bank gives away to consumers each year "tchotchkes." Do so, and you'll incur the wrath of Chas Hermann, Commerce Bank's senior vice president of retail marketing, and Ron Mendoza, the bank's vice president of merchandise. "We don't want tchotchkes," Hermann says, with a tinge of disgust in his voice. "We want souvenir-quality merchandising."

To say that Hermann and Mendoza take promotional products seriously would be an understatement: Commerce's executives believe so strongly in ad specialties that they devote between $5 million and $10 million per year of their $50-million-plus marketing budget on them. Certainly not typical for the average bank.

Of course, Commerce isn't exactly an average bank. The company has 325 "stores" (its term for branches) throughout Pennsylvania, New Jersey, New York, and Delaware, which are open seven days a week, from 7 a.m. to 8 p.m. most days. Virtually all its services (checking, online banking, ATM withdrawals) are free. It's open on days many consider bank holidays. And while other banks may have recently begun offering similar features, Commerce pioneered them. Customer service and convenience are still its prime obsession. For example, it employs "mystery shoppers" who visit or call its stores incognito to check on how things are being run. Do they hit each office once or twice a year, or even quarterly? Oh no. Annually, they make a total of 75,000 to 100,000 visits.

Doesn't sound very business-oriented for a bank, does it? Maybe not for some. But for Commerce, the formula breeds success. Since 1973, when it was founded with one location in Marlton, NJ, it has remained one of the country's fastest-growing financial institutions. It has assets of $31 billion, and, last year, had revenues of $1.4 billion and opened 50 new locations. It currently employs 11,000, and its expansion goal is to have 700-plus stores and total assets of $104 billion by 2009.

Helping to fuel the company's success is its unique branding strategy, which incorporates imprinted products in a strategic and calculating way, rather than as an afterthought.

Logoed Products: Serious Business
Before joining Commerce four years ago, Hermann was with Disney Co. for more than a decade as vice president of strategic planning, then did a stint at Starbucks Inc. as vice president of marketing.

Mendoza, who joined Commerce a year and a half ago, worked at Disney for 25 years, first as general manager of retail operations, then as director of assortment placing. "I oversaw a $700 million-dollar budget and almost 300,000 SKUs," he says. "It's not quite as many here, and this is probably a little more challenging, in that you're dealing with more than simply product. But it's a lot more fun."

The fun for these guys often begins with the use of logoed merchandise. And what's abundantly clear is that they "get" promotional products. They understand how far logoed products can reach and how they can be an integral part of any marketing campaign. "Everything we do has an eye toward reinforcing the brand," Hermann says. "When you go to a community run, walk, race, art show, whatever, we're often giving stuff away there. We want branded merchandise that reinforces what we do."

Indeed, no promo product is given away without a specific business goal attached to it. In one instance last year, Commerce wanted to reach CPAs and tax accountants to encourage them to recommend the bank's services to their customers. It targeted 8,000 accountants, choosing income-tax season, a period when most of them are more than a little overworked. Dubbed the Tax Relief campaign, it packaged a massage-therapy pen inside a box decorated to resemble a 1040 form, with the Commerce logo superimposed. Inside was a slot to hold the bank rep's business card. The pens were dropped off at the accountants' offices, along with a note to the effect of "We know tax season can be stressful. Here's something to help."

Mendoza says that while hard results from the program cannot be measured, Commerce still considered it a definite success. "We drew our conclusions based on the feedback it received; on the calls our reps got to visit the accountant. In addition, we're aware of two CPA firms that moved their accounts to Commerce."

Tax Relief is actually a full-blown example of what Commerce calls blitzing. "Blitzing for us is a form of direct marketing," Hermann says. "Direct marketing could be in your mailbox, or through your e-mail inbox. The challenge with those channels for us is that it's difficult to convey your service philosophy where people don't exist. I can tell you all day long in a direct-mail piece that we've got the best service in town, but who would say they didn't? Blitzing is an active sampling or selling effort where we go to train stations, marinas, small businesses and we'll talk to people about their business and tell them about our services, and leave them something."

But, before Commerce will consider an item in a promotion, Mendoza says, it must fill three criteria: "It has to extend the brand, it has to surprise and delight recipients, and it has to convey our personality." Items that don't engage potential customers are quickly nixed, Hermann says. "At the end of the day, it's not about what we hand to you, it's about how it becomes part of your everyday life," he says. "We don't want to just hand out keytags. We want keytags that are different, that are functional and usable to you."

Commerce constantly tries to go the extra step and use products unique to its brand. For example, one T-shirt it used needed an eight-color process, not the usual four. If the entire product isn't rendered in the bank's corporate color, red, it incorporates red somewhere. Several products, such as plastic coin purses, banks, and a chip clip it's working on, are custom molded to the shape of its "C" logo. The bank also developed Mr. C, a personalized version of the logo, which is available in, among other things, a plush edition occasionally given to children and adults.

All In The Branding
Another key to Commerce's successful use of promotional products is constant attention to incorporate them into the overall branding strategy. "There's advertising where you basically put your name where you can put it," Hermann says. "Slap it on a chip clip, keytag, whatever. That's one way."

The other, Hermann says, is word of mouth "The only way to make word of mouth powerful is to ensure the value proposition is unique, something people can't wait to tell people about," he says. "To that extent, promotional merchandise can reinforce, respond, reenergize your emotional connection to a brand." For example, Hermann says, if someone sees a Commerce customer holding its C-shaped change purse, the customer "instantly wants to tell them the story about their bank," he says. "You can only do that when you have a brand that's not a logo but a feeling people attach to their partner for service."

"If you don't have the emotional connection, you can spend as much money as you want on merchandising and it's not going to create it," Hermann adds. "It might add to it or reinforce it or build it, but it must exist first. We build the entire brand on reinforcing positive behavior at the front line."

Take the company's Penny Arcade campaign, for example, which is aimed at getting customers or potential customers to make use of the bank's free coin-counting service. Rather than a standard coin-counter, it's given a game-like appearance and atmosphere. But the program also targets children, encouraging them to save their change and open an account with Commerce. The WOW Zone is a 40- to 45-minute curriculum offered to schools where a local Commerce bank rep will visit a classroom to talk to the children about the importance of saving. At the end of the talk, the children are given a bag with a logoed product or two, as well as a coupon asking them to come in and use the Penny Arcade, and an offer of $10 to open a new account. When they do, they receive more gifts, including C-shaped coin purses, C-banks, T-shirts and pens with a molded dollar sign at the top. The banks are also offered to adult customers from time to time, and given to anybody requesting one.

That's on the physical level. Virtually, however, the WOW Zone goes deeper. Commerce's Web site has a click-through allowing kids to play games and watch short films about saving. It introduces them to characters such as Freddy Dinero, Tommy Nickels, Lucy Change and Plazzy, the in-bank computer screen kids can play with. The site also offers tips to parents and educators on how to help kids think about saving money.

To date, Mendoza says, the program has worked very well in creating awareness, with at least 100,000 products being distributed.

Strengthening Local Ties
Commerce also sponsors or is involved in a number of local events, such as charity walks and fundraisers, at the community and business level. In the case of multiple sponsors, it will include its logo on the T-shirt or whatever else is being given out, but often have a separate table where it will distribute Commerce-logoed items such as water bottles.

Occasionally, association is enough. One recent business event it participated in was Dine In Brooklyn, an initiative designed to increase business at Brooklyn eateries, developed by a Brooklyn restaurateur. The program offered diners a full meal for about $19. Commerce partnered with the restaurants and The New York Sun. The Sun created a wraparound for copies of the newspaper handed out throughout Brooklyn, and Commerce provided Dine In Brooklyn aprons for restaurant employees to wear. "Dine In Brooklyn was their logo, and we didn't want to take the event away from them," Hermann says. "But we'd also have a point-of-purchase piece in the banks that said, "Open an account at Commerce and get a meal for free." And we'd give them $19 to show we're a better bank. Brooklyn got economic activity, we got branded in a relevant way, the Sun touched all those restaurants, and people got a great meal at a restaurant they may never have been to before for $19. It was a real cooperative marketing opportunity, and we love those."

In another case, Commerce was one of the sponsors for the Philadelphia Soul pro football team. To bring its sponsorship more to the forefront, it launched a program called Wacky Wednesdays, where area high-school students could attend a Soul practice at which the players would talk to them about not making sports so important that the rest of their education suffers. Commerce gave the students tickets for a game, a logoed autograph book and a special T-shirt bearing a logo Commerce created to represent both itself and the team.

Commerce also makes its presence known at various Minor League Baseball events, where it not only functions as a sponsor, but participates in between-inning activities, generally using Commerce merchandise as prizes. One, done to promote the Penny Arcade, was "C-Bank monte," where attendees were given the chance to win a bank by guessing which one had change in it. A variation is done with baseball caps. In each case, of course, the bank and one or more of its services is reinforced.

"It's not good if you look at it as products," Hermann says. "If you instead look at its purpose, it exposes a potential viewpoint of Commerce bank - 'This is a really cool company. I'm gonna check out more about it.' We're about top-line growth. We think if we grow the top line, we can manage the bottom line. Most banks try to take costs out of their system. That's not a forever strategy. There's a point where it's a diminishing return."

Inside Line
Just as Commerce uses logoed merchandise for marketing to the public, it also targets its employees with it as incentives, and with highly positive results. One example is its C Sticker program. "When we catch people doing things right, we give them a sticker, and they can accumulate them, then trade them in for internal-only Commerce-branded products," Hermann says, adding that these include lunch bags, sports bags, travel mugs, wearables and more. C-sticker redemptions are presented by the bank managers, often with a certain amount of fanfare.

Another incentive is done through its Dr. Wow letters. Each week, Hermann explains, the bank receives letters from customers about how an employee did something for them. The letters are broadcast to employees as a way of making them feel good about reinforcing the bank's principles. The frequent "mystery shoppers" also take note of good things employees do. Each year, the bank holds its annual Wow Awards. This year's event took place at Radio City Music Hall and involved about 6,000 employees. The night involves the presentation of 45 awards, such as best full-time teller, lender of the year, rookie of the year, etc. The winner of the Chairman's Award for Excellence receives a cash prize ($10,000 last year) and the Retailer of the Year gets a year's lease on a Porsche - a red one, naturally. Employees can be nominated through several channels, and all nominations are reviewed by an executive committee. The average is 500 nominees annually.

Mendoza mentions that everything given to employees, with the exception of the Porsche and about 24 pieces of Waterford crystal used as door prizes, is not only logoed, but is presented in a custom box that underscores the award or prize. And employees apparently can't get enough of them. "I recently attended a meeting with our regional VPs," Mendoza says, "and practically all of them said they wanted more branded products for employee incentives. A number of employees had even asked them if they could simply buy items. To that end, we're in the process of developing a company store."

All told, does he have a favorite product? "I'd say our pens and the C-banks," Mendoza says. "They very much define the brand, so they carry tremendous weight." In fact, each year Commerce gives out "many millions" of the pens and about 30,000 banks.

Expect those numbers to keep growing. There's no question that Commerce intends to not only continue using promotional products, but will likely increase and broaden its applications of them. Why? Once again, Mendoza says, it all relates to branding. "It's not a cut-and-dried situation," he notes. "The success of logoed products for us has been that our belief in them stem from the top. They break the ice for relationships and always work to extend the brand. And that's what we're always after."

COPYRIGHT © 2005 The Advertising Specialty Institute. All rights reserved.
Arn Bernstein is executive editor of Counselor.

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