Vito Labellarte, Author at Westamerica Communications

How should you handle NSF policies in marketing your checking account?

By Vito LabellarteMark's Minutes

Overdraft/NSF – An unflattering history

As long as I can remember there has always been a “penalty” associated with writing a bad check. Historically, there was a lot of work that was created when a check bounced. It might take an institution a few calls and even hours to resolve the problem.

After the implementation of Check 21 and the move from paper checks to digital imaging, the risk posed by NSF checks and the operational energy for processing went down.

But like everything, the cost institutions charge consumers for NSF (non sufficient funds) has increased over the years. Today the average is $26.58 according to Bankrate’s 2022 checking account and ATM fee study. Average is just that. On the low end some charge about $10 and others as much as $40 per occurrence!

Depending on which statistics you rely on, the annual amount of NSF/Overdraft fees are in excess of $10B annually! And that is what is at stake for banks and credit unions.

Government initiatives to eliminate junk fees

While many institutions have voluntarily started reducing these fees, many more are reacting as a result of the likelihood of government pressure. In October of 2022, the Biden-Harris Administration announced that they were taking action on “junk fees” (of which NSF/Overdraft is one).

These likely are part of the “exploitative or predatory fee” component in this initiative. They are described as “fees that far exceed the marginal cost of service they purport to cover.”

With all the improvements in process and productivity in the checking sphere, few can defend these fees. That’s why all the major banking firms are moving rapidly to re-write these programs.

Watch your competitor’s reaction to these changes

To believe that an institution can eliminate these fees from their products and happily move forward making significantly less margin is unrealistic. As these firms begin to reduce prices on these fees, they will inevitably have to increase prices of other items.

Pay close attention to your competitor’s checking product details. Not just the rate being quoted but all fees associated with the program.

How to leverage in your marketing efforts

According to The Financial Brand, the most important attribute for choosing a checking account was fees. If you are a value provider of financial services, you can likely win the war on the key areas that make up checking account fees by a simple comparison between your product and other major providers in your area.

Key fees to focus on would include:

• Monthly Charges
• Cost of Checks
• Overdraft Charges
• ATM Fees

Surprisingly, deposit rates were slightly lower in importance behind “convenient branches” in this 2020 survey. However, with the rate environment reaching new heights in 2023, deposit rates should quickly become a major focus in your advertising to aid in encouraging switching.

Thanks for joining me today!

February 16, 2023

Is your auto lending stuck in the garage?

By Vito LabellarteMark's Minutes, Uncategorized

We’ve talked about the challenges in this economy in past updates. Seems like we have a genuine ‘trifecta’ of challenges that will impact auto lending.

1.) Rising Interest Rates – The Fed just bumped the rates up another .25% last week. That makes it harder for you to plan interest rate promotions and margin returns, in addition to raising the consumer’s rate.

2.) The Consumer Fear Factor – The talk of recession gets louder. It almost doesn’t matter if there is one or not, but rather what people think. According to Bankrate.com, a full 69% of consumers feel a recession will hit before the end of 2023.

3.) New Car Supply Chain Improvement – With supply increasing, prices of new cars are stabilizing and that is pushing down the value of used cars. While this makes used cars more accessible, the rising rates add another level of difficulty to making the regular payments.

One thing is for certain, selling auto loans will be different in 2023 than 2022. There will still be many cars financed and you can still secure your fair share.

Let’s look at each of these scenarios above and identify approaches your company can use to market effectively in light of these conditions.

Selling Auto Loans in a Rising Interest Rate Environment

We know that most consumers are looking at the monthly payment when they go to buy a car. The question becomes, “How much car can I afford to buy to get the payment I need? When we think of this from the consumer’s point of view, we can offer solutions, instead of just a rate. Your campaigns can focus on “getting someone into the car of their dreams” and helping them “with the most competitive loan terms possible”.

Acting as their consultant you can help them get to the best rate they can within their current circumstances. You also have the unique opportunity to help those credit challenged with a credit building program that might start out at a higher rate (because of risk) but can be refinanced in year two or three based on payment behavior, etc. Longer terms can help offset a higher rate.

Advertising and marketing messaging can promise a free assessment and the best rate possible for their current circumstances. Terms like “See us first; See us before you shop; and Complementary Prequalification” help to set the tone.

Decreasing Consumer Fears in Borrowing

Often consumers will wait on an opportunity because of their fear of what might happen. Of course there is no way to eliminate risk (or a recession), but lending insurance products have been created to reduce the risk. For instance, in the event of a job loss debt protection insurance can delay payments for 6 months. Gap insurance can also help to alleviate any fears that might come from the rapid changes in car values that are predicted.

Marketing Against the New Car Dealership Low Rates

We haven’t seen these yet, but the “zero” interest rates will likely appear if the economy cools. Just as the manufacturers have improved supply, demand may drop which means price decreases and dealmaking will start.

The best defense to this is a good offense. Promote yourself as the place to come for auto loans. Create auto buying seminars for the consumer to learn how to secure the best loan, how to shop for the best car, and how to make a smart decision in this new market reality. Reengage your local dealerships and leverage your indirect lending relationships.

There won’t be any much low-hanging fruit to pick from in these next few years. You’ll need to use all your tools to stay in front of the consumer and build your institution as the place to come for all things auto.

Thanks for joining me today!

February 8, 2023

Growing New Accounts – Putting a New Face on the IRA

By Vito LabellarteMark's Minutes

For years, the standard approach to gaining new clients was to throw out an offer of Free Checking or a High-Rate Savings Account to capture consumer attention. But then everything changed. People invested heavily in the market and traditional savings products were pushed down by low loan rates and a non-traditional Fed policy.

Stock Portfolio Losses Have Hurt Average Investors

After the record market correction in September that wiped out 22% of the average portfolio, people are clearly looking for safety in their investments. And while they aren’t taking everything out of their brokerage accounts, they are balancing what they have and being more critical about where they put their new “investment” money.

What People Want Right Now is a Safe Haven

Throughout the years leading up to 2022 savings rates were routinely below 1%. Most longer-term CDs and other savings vehicles left savers with little earning potential. Now with market corrections and Fed rate increases, savings products are much more appealing. One-year CDs are now showing rates in excess of 4% nationally and may go higher!

Retirement products (IRAs/Roth IRAs/Annuities/401K) are always top of mind during the first 3 – 4 months of every year as taxpayers review their current income and estimated tax liability. Their radar is focused on two things:

1.) How can I lower my current 2022 tax liability or improve my refund? (immediate gratification)

2.) How can I generate safety and a reasonable return going forward? (risk avoidance and investment return)

Traditional savings products are the answer!

New Product Strategies for IRAs will Drive New Accounts and New Money

Most institutions are not leveraging their creativity when they promote IRAs. In fact, they don’t even talk of the benefits they just announce, “We have IRAs and here is our rate.” Imagine how far that gets you with any other consumer product!

Adding more personality and product benefits to your IRA offerings will generate more interest and drive more traffic.

Consider some new ideas for this old standby (as an example):

• The Safe Haven IRA – A high-rate IRA plus a checking account that auto deposits on next year’s IRA. The consumer can adjust how much they want to contribute each month based on their current circumstance…more or less depending how much they have available. 
• The Bonus IRA – A high-rate IRA with a kicker for bringing in new money from another institution. A free checking account/debit card rounds out the package. 

It’s time to dust off your IRA, get your creative juices focused on a powerful concept and get your fair share of this business. It’s a great source of new money and new relationships.

Now is an opportune time to take a fresh look at enhancing your deposit product offerings and grow your account holder financial security! Please let us know how we can help!

February 2, 2023

The Powerful Secret Weapon for Growing Credit Card Accounts

By Vito LabellarteMark's Minutes

Now is a great time to pursue new credit card accounts. Especially if you currently have a strong competitive position in rate or rewards.

As we know, in an upward rate environment like we have now, credit card rates move up very quickly. APRs of 20% plus are common in these circumstances. For the credit card user, even a small increase can translate to much larger liabilities in the short and the long term.

Consumers are more aware of these higher rates as rate change notifications are sent out by the card issuers and other financial institutions.

The Balance Transfer — A Fast Way to Grow Balances and Accounts

That’s why the Balance Transfer program is an easy and convenient way for a consumer to transfer their credit card balances to you.

Most promotions we are beginning to see are offering a special reduced rate (like 3.99% or similar) on the balance that is being transferred over. Of course, the lower the rate the better as it might be the differentiator when deciding between two providers.

Targeting the Right Consumer

According to Money Geek, current average credit card debt levels are listed below. While average credit card debt is highest in the 75 + age group, they do not carry debt, meaning they likely pay off their credit cards each month. Those ages 54 and below offer a high potential return.

Age Group	Median Credit Card Debt	Average Credit Card Debt	Percentage Who Carry Debt
Younger than 35	$1,900	$3,700	48%
35-44	$2,600	$6,000	51%
45-54	$3,200	$7,700	52%
55-64	$3,000	$6,900	47%
65-74	$2,900	$7,000	41%
75 or older	$2,700	$8,100	28%

How to Promote

There are many ways to promote a balance transfer. Much depends on your budget and target market. Make sure your creative message and imagery speaks to the target market. Age-appropriate imagery is important. Key benefits of the program will vary depending on the age target:

• Younger – Reduce debt, save money, increase overall borrowing power
• Older – Pay down debt, put more money away for retirement, meet growing family needs
Preapproved Credit Card Offers sent to a targeted list via direct mail are one of the best options. Also using email offers to apply for a new credit card along with a link to a web splash page showing the Balance Transfer program details and an application. If you have a strong card program, always show a comparison of your card against the other competitive offerings.

Round out your direct mail campaign with in-branch merchandise and signage. Many companies also include incentive programs for front line staff efforts to generate the best results in selling credit cards.

You need to move quickly. If rates change again the opportunity may as well.

Thanks for joining me today!

January 26, 2023

Where oh where have the loan opportunities gone? Home Equity!

By Vito LabellarteMark's Minutes

The low hanging fruit in lending has seemingly dried up. While the Fed continues to raise rates, we have seen all loan rates increase along with them.

Just six months ago you could find auto loans below 3%, now they are closer to 5% and above. Let’s not forget about mortgages. Those have gone from bad to worse. Today’s average mortgage rate is 6.52%.

But there are options! Within an upwardly moving rate environment, a home equity loan can be a great solution to a consumer.

Today’s homeowner is now sitting on the largest amount of equity in history. CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase to an average of over $300,000!

The $300,000 may be subject to a decline as we watch home prices adjust to the new, slower level of sales resulting from the mortgage rate increases.

What’s a marketer to do?

Now is the time to leverage the home equity loan (or line of credit) as a tool to help your consumers with alternative loan choices.

Promote the following benefits in your marketing communication:

1) Pay down higher balance credit cards. The average credit card rate is now almost 20% while the average home equity loan is 7.75% and the average HELOC is 7.30%. If someone is carrying a 20% credit card rate along with a large bill coming out of the holidays, the line of credit could reduce their monthly outflows significantly.

2) As a source of funds for an RV or Boat loan. RVs and other items often carry a much higher interest rate than a traditional auto. Consider a home equity option as an alternative, especially as we move into the spring and summer months.

How to promote

You can promote home equity in two distinct manners:
• Targeted Offers – Use a predictive list to help you identify the highest equity households within your market area. Send a targeted letter along with projected savings seen when converting higher rate loans over to an equity loan.
• Broadscale Marketing – Don’t be afraid to push out messaging to your account holders through email, web banners and other digital messaging.
• In-branch Merchandising – Signage and other POS will help you drive awareness to consumers.
One final note on Home Equity Loans. Please avoid using the term HELOC in your headlines and marketing messages. Most people don’t know what a HELOC means. They might if you added “Home Equity Line of Credit” next to it, but not by itself.

There are loans out there, you’ll just have to look a little harder for them.

Thanks for joining me today!

January 19, 2023

Social Distancing in Your Marketing Strategy

By Vito LabellarteBlog

Social Distance Marketing Sign Americans have never had the same feelings about personal space as other cultures. Italians and many Europeans believe if you don’t provide a kiss on the cheek in your greeting it’s an offense. Now all around the world, there’s social distancing.

We are huggers though. The hugs vary by generation for sure and differ when addressing the same sex. Younger men have made the “shake and chest pump side hug” popular when greeting each other. Women seem to prefer the “gentle loose hug and pat the back” method.

No matter the intensity of the greeting, all bets are off after COVID-19 and the new norm of social distancing.

The new normal after COVID-19

Our current behaviors will be changed following this current episode. We just don’t know exactly how, and for how long.

No matter how we are used to greeting each other, that method will now likely be changed forever. Likewise, we are seeing that waiting in line has been changed to accommodate social distancing. Be prepared for longer lines with 6-foot gaps between people.

How do we manage this new normal within the marketing environment? What are the new rules that marketers will need to follow? In communication? In merchandising? At events?

Things to consider while creating new rules

Social Distancing Floor Decal We will have to create new rules for social distancing. But how do we create new business rules limiting behavior while also keeping the user experience positive?

In today’s day and age, how do we let the consumer define the experience?

What is appropriate for some may be inappropriate for others. Everybody wants to personalize their experience. Is that doable?

Sneeze guards or masks for face to face meetings?

Think about face to face meetings and social distancing. How about the server at the McDonald’s counter? Can you really stay 6 feet away from your real estate agent or financial adviser?

Will your server at the restaurant need to wear a mask and gloves when delivering food? Will you need to wear gloves and a mask when going to a meeting? Possibly.

Some retailers have already started installing “sneeze guards” at checkout to keep their staff safe from customer infection. Back in the 1980s the health departments mandated the salad bar restaurants install sneeze guards. The guards are still in place. Will we create mobile personal sneeze guards that can be set up for a meeting? Someone will be responsible for cleaning and sanitizing the meeting sneeze guards after each meeting. They may become the norm.

Will every business need to maintain a supply of face masks in case a customer demands one? Probably. I can see a branded face mask available just like we have logoed coffee cups, pens and notepads.

Crowd control for the retail and event experience

Some companies (like Westamerica) are already producing vinyl floor graphics that help to direct traffic and create some “rules of the road” for those shopping or waiting in line.

These graphics can be highly customized and even light-hearted, but they all are focused on the goal of creating order amid the new consumer expectations of social distancing.

There are a lot of new behaviors that will be instituted during and after this COVID-19 episode. The alert marketer will keep a keen eye on the consumer sentiment, changing consumer behaviors and an awareness of the tools, technologies and techniques to keep the process flowing effectively.

Keep your eyes on this…but remember your “social distancing”.

March 27, 2020

What You Need to Know about Choosing Large Format Printing Technology Substrates

By Vito LabellarteBlog

Wide-format printing is an excellent way to stand out in today’s crowded marketing environment at trade shows and other events. We like to say that large format printing technology makes “your big ideas even bigger.” When you couple the medium with a compelling graphic and prime location, using large format printing technology for trade show booth graphics and other special events grabs the attention of your intended audience.

Before designing trade show booth graphics for large format printing technology, you should have an idea of the type of material on which you will print. These materials are referred to as “substrates”. From plastic to wood, vinyl to fabric, you have many options for large format printed project substrates for use in trade show displays or special events.

So, the real question is, how do you choose the right one for your project? We have a few ideas, which are outlined in Printing Impressions Magazine. We encourage you to start by asking yourself the following questions:

What is your budget?

As you can imagine, along with the different options for substrate materials, there are many different price points. Knowing what you have to spend on the project is an excellent place to help you narrow down your options. As PI World.com says, if your budget is on the lower side, go for paper, coroplast board, falcon board, or a scrim banner. Have a little more to spend? Consider acrylic, Dibond with a metallic finish or black PVC board with white ink. Defining what you can afford is always an excellent first step.

Where are you going to use the material?

Your placement and the related environment will have an enormous influence on the type of substrate you choose. We recommend different materials based on whether the final project will live indoors or outdoors, in a temperature-controlled environment or one subject to a varying condition. For instance, if it will be exposed to direct sunlight. However, it should be noted that most (if not all) outdoor substrates can be used indoors; it’s when you want to put a substrate more suited to an indoor environment outdoors that you start to have issues.

The excellent news that PI World notes is there are many different price points for all budgets in materials available, no matter whether the project will be indoors or outdoors.

How long do you need this project to be in use?

The implications here are that some materials are more durable than others. The longer you need the project to last, the more significant the investment should be in the substrate to accommodate those needs.

Now that you have answered these questions, you can begin sorting through your substrate options. Per Graphics Arts Magazine, there are 12 popular large format substrates that most customers choose, which include:

Acrylic
Black PVC
Coroplast
Dibond
Falconboard
Foamcore

Gatorboard
Scrim Banner
Removable Vinyl
Smooth Banner
Styrene
White PVC

Each has an intended application, also, which makes them appropriate to specific projects over others. For example, acrylic is ideal for signage and lightbox applications and is durable for the long-term, but foam core is more cost-effective and great for indoor signage that doesn’t need to be around for a long time.

To read what Graphic Arts has to say about all the substrates in more detail, please click here.

Wide-format printing technology can print directly on the substrate also. For example, we have a VUTEk GS 3250 LX Pro Hybrid Digital Printer, which can handle printing directly on substrates up to 2” thick.

This large format printing technology eliminates the need to mount printed paper on the substrate, which can be clumsy at times.

However, you don’t always have to print on a thick, rigid material to make an impact. There are also large format printing technologies that can make your graphic part of the fabric through a process called dye-sublimation. Using our MS Impres printer, we heat the dye to 390°, which turns it into a gas so that it penetrates the fabric, becoming a part of it.

This technique is excellent for making fabric displays that are easy to transport and especially impactful as a trade show booth graphic, especially when backlit with LED lighting. However, it is also great for making fabrics for recovering furniture or throw pillows, which can be an eye-catching way to promote your brand at a trade show.

When it comes to wide format printing substrates and technology for your trade show booth graphics or special event, you have many options to consider. Begin by determining your budget, your placement, and the duration of the project’s use to help you narrow down your options. Then, explore what options large format printing technology and the substrate materials available offer you to accomplish your goals. You might be surprised to discover a unique way to communicate your brand that stands out by sinking into your prospects’ attention.

To schedule your free consultation with Westamerica Communications today, contact us, give us a call at (949)462-3600, or visit us at MyWestamerica.com

To see more examples of our work, click here to see our project gallery.

Westamerica Communications is the new spirit of communications with creative solutions for every form of media, from web strategies to traditional concepts to print and mail options, and more. Follow us on Facebook.

Sources:

Dolan, Shannon. “Twelve popular large format substrates your customers should know about.” Graphicartsmag.com. 30 June 2015. Web. 11 March 2020. https://graphicartsmag.com/articles/2015/06/twelve-popular-large-format-substrates-your-customers-should-know-about/.

Keene, Brett. “Selecting the Right Substrate for Your Wide-Format Project.” www.piworld. Com. 1 June 2017. Web. 11 March 2020. https://www.piworld.com/article/selecting-right-substrate-wide-format-project/.

March 25, 2020