Webinar Replay - Using Technology to Ramp up Your Small Business Performance
Well, hello, everyone. I'm Rachael Sampson, director of Key4Women here at KeyBank. And I want to welcome you to our program today. As we know technology has never been more critical for business than it is today with accelerated adoption driven by the pandemic that has significantly changed the way businesses operate and their interact with their customer base. The changes adopted not only helped businesses sustain and streamlined their operations, but have also proved beneficial for growth and necessary to compete in today's marketplace. Today, our experts are going to share the latest market trends and insights with you, and also share how you can create an always on experience for your customers automate and streamline payments and receivable processes and identify ways for you to mitigate the risk of fraud. Please use the chat box to post your questions and reactions throughout our program today and we'll address as many as we can as possible during the Q&A portion at the end of our program. Now, it is my pleasure to introduce you to our team of experts. First, we have Matt Marscher. Matt is the national sales manager for the cash management and merchant sales team within Key's Business Banking Group. He is responsible for ensuring that consumer bank consistently achieves their overall cash management and merchant financial targets while delivering the best in class client experience. In addition, he leverages his partnerships with other leaders and business units to develop, implement, and execute innovative strategies that continue to set Key apart in the marketplace. Matt's demonstrated track record in successful business banking leadership roles, as well as his experience developing and executing data-driven strategies to increase overall sales and revenue growth, make him uniquely qualified to lead this team. Matt entered the financial services industry in 2005 and joined Key in 2017. His financial services experience spans various positions ranging from branch manager, to business banking territory sales leader. He is a certified consulting selling training facilitator and a Key4Women's certified advisor. Matt has also been awarded the corporate partner of the year by the National Association of Women Business Owners. Matt earned a BS in finance and marketing from the Ohio State University and an MBA from John Carroll University. He is a member of the Association of Financial Professionals, AFP, the John Carroll MBA Alumni Association, and the Ohio State Financial Advisory Council, and is also an active volunteer with Junior Achievement. Next up we have Kristyn Squires. Kristyn is Senior Vice President and Small Business National Sales Leader. In her role Kristyn is responsible for developing and deploying the national small business strategy with the primary focus on serving clients in the 250,000 to $3 million revenue range. In partnership with Key's Retail Organization, her role oversees the small business sales team who is responsible for providing small business support and guidance to approximately 1000 branches with the goal of increasing sales revenue and delivering best in class client experience. Kristyn began her financial career in 1999 and joined KeyBank in 2006. Her increased leadership responsibilities has happened through numerous positions within the retail bank. Prior to her current role, Kristyn served as the regional retail leader for KeyBank Western Pennsylvania region. Kristyn's financial related education and training extends as a graduate of the Consumer Bank Association's Executive Banking School at Farnham University. She earned her life in health series 6 and 63 licenses, and is a graduate of the YWCA Women's Leadership Institute programs. Kristyn is also an active member of the community, and most recently served as the Pittsburgh Go Red For Women Luncheon Chair and Circle of Red member. She previously served as a board member of Plexus, the chamber of commerce for the LGBT community and allies. She's also been an active committee member for Cleveland's Venture Accelerators, formally known as Bad Girl Ventures and an active participant for the Women's Business Center within the Economic Community Development Institute in Cleveland. And finally, we have Michael Stack. Stack is currently Vice President and Senior Emerging Product Manager for Key Merchant Services at KeyBank. In his role, Michael specializes in digital enablement of business payments and card processing solutions to help streamline business and operations processes, action planning and measurement that improve cash flow. Michael's career spans across consumer and business product sets, including mortgage, business banking and payments with more than 16 years of business solutions, strategic leadership, sales coaching, and training. Michael earned a bachelor of science in accounting and finance from Akron University. Thank you all so much for being here today. I'm really excited for today's conversation. So Kristyn, as we get started in our program, I'm going to start with you. We are still dealing with the impact of COVID. There are so many macroeconomic factors and world events that are impacting businesses every day. So can you talk about some of the small business trends that you're seeing in the marketplace?
Yes I'm happy to Rachel, and thank you for the warm introduction. I'll have to make sure I shorten my section next time but-
I'm so happy to be here and, you know, to answer your question, like I am always so impressed with just the resiliency of small business owners. You know, first, they had to deal with everything through the pandemic. A lot of them had to adjust their models. They had to figure out a way to work in the environment that we were in. And now they're dealing with the aftermath, which is, you know, quite honestly shocking to just see that they're still dealing with labor shortages. Now we're dealing with supply chain challenges. And inflation, you know, so it's been consistently yet another battle that they've had to face in the market that we're in and, you know, and I've seen their agility through the pandemic. And I'm still seeing that agility with just business owners who are adopting different models, they're adopting technology in a way that they've never have, which is just outstanding just to see the, you know, the overall adoption and how quick they're moving. And those businesses that we see doing those two things are the ones that we're actually seeing a ton of growth from. So, you know, I'll give an example. You know, we just recently had a multi-generation pizza company who was struggling with their profit margins, you know, with inflation, with supply chain, most importantly, you know, this company was dealing with staffing issues. So we had a great conversation. We evaluated, you know, their current cash flow position where their gaps were. And quite honestly, he decided to make a really tough decision and that tough decision was they were going to close the shop and they were going to pivot to baked goods where they were going to have a higher profit margin. And more importantly, they were going to double down on online sales so that it was more marketed towards catering and wholesale. You know, in this event, they leveraged technology, they figured out another way to keep that family business open and just continue to fight against these challenges.
Oh, that's so interesting. And that technology shift that you talked about in digital and online sales has been so critical as it's dramatically changed in the last two years. Michael, I'm going to turn to you and say can you share some of the best practices for digital integration that businesses can really utilize to help drive that awareness of their brand and attract new customers?
Oh, of course. And I mean, I think just, you know, with Kristyn's example of the business that shifted and pivoted their core model away from potentially serving, you know, pizza pies at the retail storefront level and delivery and carry-out to baked goods, they need to attract new customers, keep their existing customers and help them understand, you know, what their new business model is, right? So how do you attract the customers? How do you make sure that your brand is out there in the market while you need to utilize multiple media formats? It's critical to get your message out. Obviously social's out there, but cross advertising with complimentary businesses that might be in the market, partnering with your local community. Obviously the chambers of commerce continue to be best practices and, you know, centers of excellence in terms of the small business, small to medium size business ecosystem. So, and there are many ways to do this, right? Generically, you can have websites, you can attract customers with LinkedIn, Twitter. There are ways to connect your POS systems if you use those into rewards and loyalty programs. So we'll talk a little bit more about the specifics a little bit later during the discussion. But I think just getting yourself out there and making your customer base aware of who you are and what you're doing is paramount.
Right, and so as those businesses have really adapted that digital mindset, have we seen any changes to the business websites that you talked about? And I know you talked about the POS, are there any specific trends or best practices that you might highlight that businesses really need to deploy in order to compete?
Well, sure. I mean, so the kind of buzzword now is multiple sales channels, right? So that would be like in-store, online, social, but in terms of websites there are, it's almost expected now, by the customer base, whether you're in, you know, selling goods and services, whether you're a restaurant retailer, CPA, financial services, there's an expectation that your customer, your client can find you online. And when they find you online, how you present online tells a story. And I'm not suggesting the story is good or bad, it's just your story. So if you show up as, you know, a Google information label during, you know, the Google search and there's, you know, a phone number there and potentially an address and a map, but there's no web presence. And then below there are 50 others that have websites to search, that just kind of creates that branding right off the clip, you know, old-fashioned seven seconds to make a first impression, it's even shorter online. It might be milliseconds in terms of how you appear. So there are elegant ways to build very complex web ecosystems. There are simpler ways to do it. There are many kind of off-the-shelf solutions that don't cost a lot of money for small businesses to use like Wix or WordPress or Shopify, or, you know, you can, you know, search a number of different platforms out there. We have our own platform that makes it easy for you to do so. And then once you're online, what can I do do there? Can I just look and see like who you are and what your values about your business are? Or can I look at goods, services, products, descriptions? can I actually buy? You need to make the decision as an individual business owner, do you want that experience? Maybe you don't want them to buy online because part of your brand is white-glove service in store, or as part of your services that you render. So those are just a few of the many ways that you can adjust your online presence, using multiple channels to reach your customers and your clients and help them understand who you are as a business and how you'll serve them.
I like that. And you touched on a couple of different things about the different levels of sophistication that a website may have. Are there certain features that are absolutely must have that as you think about from a business perspective to really create those return customers or consumer loyalty?
Well, I think consumer loyalty and rewards have kind of jumped the shark, as they say, from a retailer-only, or restaurant-only to I've seen veterinary offices with gift cards and rewards programs for, you know, if you board your animal for so many days, I'll give you a gift card for X dollars. So we've gotten into the realm of, I can reward you for your loyalty, no matter what my business is. If I provide plumbing services to you, or if I'm selling candy at a candy store, some of them become more obvious and some of them are a little bit less obvious, but I've seen business owners successfully use a gift card or rewards, loyalty program, and just, you know, decide to make an investment in attracting new customers by loading up gift cards or, you know, digital QR redemption certificates from their POS system for five bucks each. And they decided how many they were going to do. They made the investment of, okay, I'm going to redeem these $5 cards anytime they come into my store and I'm going to go hit the market. I'm going to go to the local little league games and put them on people's windshields. I'm going to hand them out and shake hands. And just simple acts like that. Drive brand awareness. It drives maybe your logo and your marketing for your brand, and it attracts customers to your store or to your services with very little effort involved. Now, yeah, you have to give the five bucks away, but generally when folks come into your store with a gift card, they spend on average 65% more than they plan. So $5 cash versus $5 gift card, I'm going to spend more. So it's traditionally a pretty sound way to get out into the market and use some of the, what you'd consider more traditional marketing programs in a maybe non-traditional way.
And that's interesting. So how impactful are those programs? Do we see a huge uptick in growth when those are deployed or, you know, is it something that, as you mentioned, I like the idea that it could be used not just in product-based business, but in service-based businesses and run the gamut as well. But as an owner thinks about evaluating this, what's kind of the thought process that they should go through when deciding what questions to kind of ask themselves and how much growth could they anticipate to see.
Great question. So using rewards memberships, these could be promotions, discounts, happy hour, gift cards, online point program, you know, where you're tracking the amount of dollars spent, no matter what you're using, there's usually a 2.5% growth from businesses that focus on that program, customer loyalty programs, versus those that don't use them at all, or have them and don't implement them. 15 is the number of membership programs that the average consumer belongs to. That's a lot. I mean, I just think about myself. It could be grocery store. It could be online. That's a lot. I mean, if you set open your wallet and tell me how many of those cards you have, I don't think it's 15. It's probably like 30. And I put some of them in my drawer, my junk drawer, in my kitchen or whatever, but regardless, 84% of those that are members of said programs of which 15 is the average membership, 84% make a redemption on one of their programs. So they are used. I know we all probably have 12.5 cents left on some gift cards somewhere that you've never used and probably never will. That's just part of the ecosystem, but whatever that dollar amount was when it began, $10, $25, buy one get one, whatever the case may be, they're being used almost 85% of the time. So it is definitely a worthwhile investment. It's definitely worth the investment of time to consider whether or not it would be right for your business. And if it is how you'd use it, right? Because establishing the promo or the rewards program is one thing, then you've got change management within potentially your employee base, your ecosystem of who am I going to deploy within my business to, you know, use this, right, to get out into the market, place it on my website, create marketing flyers for my storefront. However you want to get the message out, having a program and then executing on the program are two parts of that story.
And that's phenomenal and thinking about two and a half times growth, I mean, that's a big number when you think about just the impact of underscoring the importance of membership and those loyalty programs to have returning customers and increase that growth potential. So, Matt, I'm going to turn over to you and talk about, are there other critical online services that you would highlight as we think about this digital mindset?
Yeah, just to piggyback off what Michael had mentioned with brand awareness and customer loyalty, I think a big factor is meeting your client where they're at, right? So you have these, you build this nice website, you draw attention to the website, and you have clients coming in there. You know, how can you build the loyalty there outside of just like gift cards or other types of loyalty programs? Well, you know, some things that we've found that work well throughout the industry are, one is giving your clients the ability to make payments at any time of day, day or night. So giving them the ability to pay with card or pay with their account and routing number so that they can, you know, pay outside of your business hours. So giving them a payment portal that allows them to just see you as an always on business, so to speak and, you know, silly or not, if that sounds like there's industry, you know, proven stats that show that that drives clients back and that some clients will choose to do business with a certain business over another based on when they can make those payments options, and can they do it, you know, inside or outside of business hours. Additionally, I'm going along with that making appointments. So if you're an appointment-based business, giving your clients the ability to make appointments online, and creating that always on experience. And it doesn't mean necessarily making appointments with you outside of your business hours, but making appointments for your business hours. So giving the ability and the freedom for somebody to make an appointment at 8 o'clock at night or 10 o'clock at night, or on a weekend, maybe when you're not open so that they can meet you when you are open. And it just gives them the reassurance that they've got something set now that they can plug into their calendar and they know a time that they can meet with you. And those two things we found help also build loyalty outside of the gift card programs and other, that kind of meet that brand awareness, meeting your customer where they're at and reeling them in a bit more in order to build that loyalty with them long term.
I love that. And I hadn't really thought about it that way until you said it just now, because I know I am notorious for doing things late at night at, you know, oh, I forgot to do this, and I need to set an appointment. And it's so much easier when I can go online myself and just make it any time versus, you know, sometimes you have to think about, okay, the office opens at eight o'clock. I have to set an alarm to remember to call at 8 o'clock, life happens. And now I'm two weeks later and I haven't gotten it done. So, no, I love that idea of meeting you where you are and just really adopting that mindset, because we do have hours, especially in certain businesses, but that is really impactful and gives folks flexibility. And they're more likely to then see you at that point in time if they've actually created the space to do that. So I think that's fantastic. And as we think about too, in the same vein, is that having the automation, if I'm purchasing something, I don't know if there are any other midnight shoppers like me, but being able to do those payments and receivables, yep, Kristyn, we're there, doing that shopping. My Amazon delivery will be here at 12. So as we think about that and streamlining operations, what about other businesses? Can we talk about what that looks like from an automation perspective, especially from payables, as we think about who they're paying, and then maybe we'll come back and talk about those receivables. How do we streamline that, so that, as you said, that always on experience, whether it's setting appointments or cash flow, what does that look like?
Yeah, now good question. And we're having this conversation with many business owners these days. So, you know, I mean COVID environment I think has taught us all a lot about the need to be able to, you know, work from home, do business from home, do business virtually also, and that's spiked a need to talk about automation with clients, with business owners. And I really couple it into a couple different areas. The first is obviously automation is reducing paper, but more specifically reducing checks. So we're encouraging many of our business owners, well, really all of our business owners to reduce checks. And why do we do that? It's for a few reasons. All of which benefit you. The first is when you're sending automated payments versus checks, you're sending a faster, more secure payment that's out there and it doesn't have your accounting number and routing number attached to it. So you're reducing fraud for your business overall. Additionally, it's reducing expense for you, whereas with a check you're paying for the check stock, stamps, envelopes, and you're ultimately that's a cost that's building up over time, as small as it might be per payment. The buildup, if you're sending multiple checks per month, can really start to add up versus the automated payment that you'd be sending through, say like an online bill pay or an ACH transaction. And additionally, these payments are more trackable as well, so less lost in the mail or lost items to the end user, to whoever you're sending it to, and more of a trackable payment that you can then monitor see when it hit, when it was received. And you can also dispute it more easily. And know that it got to the end place in the best way, the way that it was intended. Additionally, on the payment side, we're having conversation with a lot of clients around card. So that might be a business rewards card, a purchase card program, and some similar reasons why we're having those conversations. And I don't think card is anything new to anyone out there on the line I would hope not, but it's amazing to me how many business owners don't have a credit card or a purchase card program when it provides such value to the business in terms of, again, creating a very secure, fast payment, that's trackable that we're sending. It also is not, again, getting your routing number, an account number floating out there through different mailboxes or being touched by several different employees. Also there's many as I'm sure many of you know, rewards programs tied to a lot of cards these days. So it's an extra nice way to earn some money back on your payment, whether that be with a traditional rewards credit card, cash back or some other types of travel rewards that might be out there. But additionally, rebates on purchase card programs that give annual rewards back as well in terms of a cash incentive. And then also you can set up reoccurring payments, more easily through card and automated payments. And you can set better controls for if you're giving cards to your employees. Many banks should have control programs within their online systems in order for you to be able to set limits, set parameters around what types of transactions can be had in terms of making sure that you're preventing fraud in that way as well, or preventing misuse of any cards or over payments in any way.
I like that, and that's so interesting. I know here in where I am in Cincinnati, they just had a sting, I just saw it in the news today. Someone was actually going into the blue mail boxes, pulling out the checks that people were mailing in and using some type of chemical to erase the ink, rewriting them and people were businesses and people were literally losing thousands and thousands of dollars, like who would think if I put something in a blue mailbox that it's not secure, but I think this question just continues to grow. Not that we want to scare anybody, but as you mentioned, I think there are more secure ways, especially right now with the world events that are happening to make sure that our hard earned dollars get to where we expect them to go. So on the flip side of that, on the receivable side, actually getting the money in are there things that we should consider on that side? And what does it look like? Is it the same as the payables? Is that a little different? Can you talk about that?
Yeah, no, absolutely. Again, I think it goes along with the theme of reducing paper as much as possible. So how do we do that? Many banks, financial service providers, offer the ability to send electronic invoices now. So giving you, as a business owner, the ability to send an electronic invoice to your clients and customers and vendors, and whoever's paying you so that they can then pay you in multiple methods. So you're no longer sending a paper invoice, which is ultimately saving again cost and time. And then it gives that vendor or client the ability to then pay you in multiple methods, which generally we see the ability to pay with card or to pay via ACH, so with accounting number and routing number, or they could always still pay by check as well, if that's something they choose to do. So, you know, sending those electronic invoices becoming more and more popular in the small business business banking space we found over the last few years. Additionally, I recommend when you are giving out your account number to receive money in, and you're not sending say an invoice, but somebody's asking you for your account number and routing number in order to pay you electronically. That is when we would recommend the universal payment identification code. So banks offer what's known as we call it kind of UPIC, that's the acronym for that. And what that does is it disguises your account number, and ultimately you're giving a dummy account number, if you will, to that individual. So that way they're plugging that in, the bank recognizes that and translates it to your actual account information, so you still get that payment, but you never actually had to hand out your actual account number. So that's another solution that we generally talk to business owners about to prevent risk and it relates to receivables.
Oh, that's awesome. That's a great tool. And thank you, Alicia, for the question. That actually came in from our audiences. Are there any other fraud protections, if any, that are built into some of the automation or business accounts that we have today, or other things that you can recommend and I open that up to the three of you.
Yeah, yeah, absolutely. So I just mentioned one. So I guess that was a nice segue there. The other items that I would recommend are, you know, not necessarily solutions per se, but just creating strong passwords, making sure your firewalls and you're updated on the most recent firewalls and cyber security. You're updated to the most recent internet browsers. Additionally, there are, when you're dealing with wire or ACH transactions with your bank, there's the ability to enroll in dual authorization, meaning that not one person can approve the sending of a transaction. It needs to go to another party, which really, you know, significantly reduces the risk of fraud, cybersecurity fraud in that regard. So those would be some of the top ones that I would recommend. Other solutions banks have including Key that help with fraud, just measures while we're on the topic are, you know, positive pay, reverse positive pay, which gives the ability to kind of monitor the checks and transactions going through your account on a daily basis. So that you know you've got a pulse sign everything that's going through and making sure that it's something that's approved by your business, which also significantly helps prevent fraud for the business overall.
That's awesome. Michael, anything that you would add?
Yeah, I'd say be, for those digital places that you go all the time, whether it be logging into online banking, whatever you consider to be your most valuable online digital asset, make sure you really understand what those login procedures are and what the webpage is, right? So for, you know, KeyBank authenticated spaces, Key business banking online, we will never, ever, ever, never, ever, send you an email saying send us your username. Or will you validate that this is your password? We will never ever send you a Google search that's saying, hey, click on this link. That's a different link than the one that we provide as our standard link. There are like bot hackers and rom scrapers out there that will scour the internet for banking relationships and/or digital financial spaces that you may use and slightly alter the webpage. So when you click on it, you're not coming to us. You're going someplace else that they've designed and they'll make it look like our website. So just be very, very careful, really understand where you're going and, you know, just don't become complacent, I think is like the best analogy to use. You know, it's easy to say I go here all the time. I click my favorite link. I log in, I give my username, I give my password, just double check, double check. You know, we want to make sure that, you know, we're being good stewards of the technology and cyber risk teams that we have here are phenomenal, but we all have to do our part, myself included, when I log into my own banking, my own online banking spaces.
That's great, thank you. And Kristyn, I'm going to turn it over to you, you know, as we talked about some of those solutions that we have and what banks offer in general, but also we've got a question from Krista in that, from her perspective, a small business, they don't have an in-house IT, so what's your suggestion of the best way to manage passwords for owners and staff when there are so many.
Thanks for asking the question. I mean a lot of our small business owners just don't have what bigger businesses have. Like IT departments, financial departments, HR departments, like you as a small business owner are wearing a thousand hats. And I think that's where the collaboration with your bank, with your banker is so critical because the services that Matt and and Michael just went over are services that, you know, definitely here at Key we offer, they're not necessarily built into your accounts. You know, we typically offer a basic account with all the bells and whistles that can be added to it. And until you have that conversation with your banker to really talk about these concerns and these technology needs, and really us understanding as your bank, what it is that you need, that we can offer these types of solutions. You know, most of our small business owners don't even know that the bank can do these things for you. So, you know, we don't expect you to have an IT department, allow our IT department be your IT department, where we can provide these additional bells and whistles that will help you, you know, add additional passwords, to add different security to your online banking, to add, you know, a way to be able to provide ways to prevent check fraud. There's so many different things. I mean, I heard a statistic that more than 80% of small business owners will experience some type of fraud. And quite honestly, they don't do anything to be proactive about it. It's a reactive, once they receive, you know, or get hit with fraud, that's when they're coming into bank they ask those questions and I think it's just important. It's just, you know, sometimes it's hard 'cause you're working so fast and you're working so many hours to just take the time to meet with your banker and talk through some of these things to prevent that versus coming in because you've been hit and now you're trying to clean up a big mess.
Oh, I love that. And you literally gave me chills when you said let our IT department be your IT department. I think that is powerful. When we think about just how important that is and being proactive instead of reactive. I mean how much stress does that cause when you think about, I know yesterday I got a call from an online shopping of my password has been compromised in my card, let alone someone has taken money out of my account and I'm not sure if I'll get it back, especially as a small business owner. So no I think those are just two things that we just probably have to keep replaying over and over in our heads of being proactive versus reactive. Because unfortunately like you said, 80%, it's almost like it's inevitable that, you know, you might encounter this, but can you prevent it before there's impact?
So I love that. And also it was absolutely a fantastic segue into my next question because you talked about too, you know, we of course want as many folks to participate and bank with Key and let us be your trusted advisor as possible, but we understand there are varying, you know, needs and where people are today and having questions. And I want to ask each of you, given the wide variety of topics that we've talked about, and before we wrap and go on our Q&A, and I know we're going to talk about the loyalty program some more is to ask each of you, what questions should a business owner ask to ensure that they're getting, setting themselves up for success? You know, Kristyn, you just said a couple of questions just now, you know, as we think about that banking relationship and maybe some things that business owners hadn't thought to ask their banker, what does that look like from your perspective and Michael I'm going to go to you first.
Yes. Awesome question. I'm asked this all the time. I put myself in the seat of the small business owner. I owned small businesses myself. I come from a family of small business owners. We had a 24-hour business that never closed. What are the expectations of your customers in terms of how they want to pay you? Oftentimes, as I turned into a banker, as my career grew, the question was, I don't want to accept certain forms of payments because they're X, X equals something, too expensive to take, I don't want to pay the fee, like yes, but have you considered what the customer interaction is when they walk into a business expecting to tap their cell phone or use a credit card or present a check? And the answer is no, you cannot pay me that way. My desired method of you to pay me is Y and Y doesn't equal X. How does that feel? And if any of you, as consumers, not just business owners, but when you go out into the market and you try to buy something and you get the sort of, no, you cannot do that here. It just doesn't feel so good. And so as you kind of think about your receivables model and what forms of payments you do currently accept versus the ones that you don't, what does it cost you to not accept that form of payment? And, yes, while they do bear fees, merchant services, that kind of a thing, you know, comes with processing rates and fees, ask the question, do my customers expect to be able to pay this way? And can I meet that expectation by, you know, presenting the best payment experience that I possibly can when the happy moment is coming, I'm about to buy the thing or agree to the service or sign the contract, and that happy moment of I decided to purchase is met with you cannot, not in the way that you would like to. So that's sort of a environment that we're trying to influence. COVID did not, obviously, it is what it is. Many businesses had to scramble to figure out how to get those kinds of payment ecosystems into place that they probably had said no to before or didn't consider doing or expense of it. So now there is a much more level-playing field, for better or worse, out in the market where omnichannel card acceptance and/or cash or check or ACH is more prevalent. And for businesses that haven't made that leap yet, it's definitely time to consider it, talk to your banker, we'll have the conversation. And if it really is right for you, or if, you know, maybe only a few forms of payment is correct.
That's great, and so insightful. And I love that you've got the expertise on both sides of this as a business owner, but also as a banker and that continues to have questions. I know we've got some questions in our Q&A about some training. And Kristyn, you talked about some of the questions for businesses before, but then there's also the questions of what should you be asking your banker? I know that's a tri-part question there, but would love for you to kind of touch on some of that for us?
Yeah, so I just received a question and I really appreciate this, Sonya, it's that, you kno, how do we, as small business owners, just learn about these individual services? And again, I'm just going to stress that, you know, here at Key I know specifically like what we really strive and teach our bankers is that we want you to be thew expert of your craft. You know, our craft is the financial aspect of it. So bring us to the table, you know, and have that transparent conversation. I think that that's really important is that I don't want you to be stressed as to what questions you have to ask us, but allow us to meet with you at least two times a year for us to ask you those questions. And as long as you're open with us about the good and the bad, you know, where is the business at? Where are the gaps? Where, you know, are some of your challenges? And really talk about what are your goals? Like, where do you want to be in a year, three years, five years from now? What is the legacy that you want to leave for that business and allow us to help you build that business plan and build that model, you know, like the pizza owner that I talked about, you know, to help, I mean, yes, there's so many ways to be able to protect you, right? You know, we talked a lot about fraud and that can be a scary thing. I mean we just had an attorney who dropped some of their mail into the box and guess what? They had check fraud. And, you know, however, the thing is, is this client actually had our payment protection program, you know, through paychecks, or sorry, not through paychecks, but pay protect. And we were able to save this client, you know, from those. Those checks did not come and get cleared through us, you know, because we already had that proactive solution on there. But I would ask that you think about it, not just from a fraud and protection standpoint, but a lot of what Matt talked about with some of these solutions can help you fundamentally create a better cash flow position, which is going to help you grow. And that's where your banker comes into play. And I know you're busy and quite honestly, Key just launched a month ago our small business check-in that allows you at 10 o'clock at night, when your, you know, when your day is winding down to just check in with your banker, whether it's a quick phone call or whether it's a sit down appointment, for us just to check in with you and see how are things going, what can we be doing better? And allow us just to have that time with you to ask those questions just to make sure that you're in the best position financially that you can possibly be in.
That's great, thank you. And Matt, I know we've talked a lot about fraud and some automation and some other things, is there anything else that you would add or any questions that you think, and I love what you talked about, Kristyn, about letting us ask the questions. 'Cause I think that's so important. And sometimes we worry about, should I really tell my banker this, 'cause I'm worried they're not going to approve me for something, but really underscoring the importance of that transparency, so that we can help you and represent you and get you to where you want to be. So Matt, with that, I'll just say, do you have anything to add or any additional topics on automation or fraud that you like to cover?
Yeah, I'll just revisit a couple, just a couple items that I mentioned earlier that I think the big question is, you know, to the banker, if they're not bringing it up as about, as a value statement to you, it's asking them, how can you save my business time, money, and risk? And that goes back to those areas that I covered before in terms of talking about electronic invoicing in order to receive receivables faster, safer, and more cost-effective. Talking about the ability to create automated payments versus sending checks. Talking about the card programs that the bank has to offer in order to convert check payments or other payments to card, creating a safer, faster, and more rewarding transaction experience than the latter. And so it's asking about that. The saving time, saving money, saving risk, and then you know a couple of the areas that in the pathways that an advisor or banker should go down. But if they're not trending in that direction, then you could by, you know, obviously bring up those areas and kind of steer the conversation in those directions to see what the offerings are at that specific bank, which will ultimately help create efficiency for your overall business.
Mmm. That's great. And Michael, I know as we think about some of what Matt even touched on in a number of different things, especially a lot of our women-owned businesses are tier one or tier two suppliers. So can you talk to us too, as we think about all of this payments and automation and how to make our processes more efficient, the importance of being PCI DSS compliant.
Yes, Sure. And you know, again, even that acronym, like most folks may not even know what it means. Payment card industry, data security standards. What all boils down to is there's a governing body around credit and debit card acceptance that demands, that every business that accepts a credit card, no matter how small or how large must become compliant. The reality is not 100% of customers do this for a number of reasons. And this gets more complicated as you add what we talked about earlier, additional sales channels to your ecosystem. Online, you know, web presence accepting card payments. There, maybe you install the shopping card as part of an API. Maybe your customers are never present. So they present card numbers and expiration dates and CV2 codes to you over the phone or via an invoice. The more channels you open, the higher your risk for breach or some other form of nasty business becomes possible, right? Wouldn't say it's a reality. It doesn't happen all the time. So becoming compliant is important. Your bank will help you to do that. There are programs that either come with your card processing account, or there are white-glove programs that can help you to, you know, walk through, what's called the SAQ. It's the annual assessment that you have to fill out. You have to answer a bunch of questions. Even the questions themselves sometimes are very complicated. You might not even know how to answer the question. So you need help just interpreting what does this mean? And any quality bank service provider is going to help you with that and not just say you're on your own. So definitely KeyBank is strong in this value proposition. Also just consider, we all hear the big ones, Target was breached, years ago with Sony PlayStation, Michaels, there's probably more recent ones you can think of. You never hear about the small businesses that are breached. You never hear about the corner store or the restaurant or that three-chain pizzeria. There's reputational risk involved in that. You didn't do anything wrong, right? Some criminal acted on a crime that they wanted to commit, and they used your business to do it. Well, it hits the local news and now your customers aren't so sure they want to be coming to your store with their credit card. So it's definitely something to take very seriously. You don't want to have that reputational risk coring out your customer base, even for a short period of time while you figure out how to, you know, write the wrongs and work with the PCI compliance team and your bank to fix the problem. So it's exacerbated more because of all the additional payment channels that are available, especially due to the pandemic. As I mentioned earlier, before, definitely pay attention to it, something to watch out for.
And that's fantastic. And we'e learned so much, even for me. So we're going to go ahead and pause there. We'd love to share some information with you, also, we've got some great questions that have been happening in the chat and the Q&A. So please, if you have any questions, please feel free to ask those right now, as we're going to go into our Q&A portion, as soon as we share some additional information for you. So as always, we would invite you to continue to participate with us, to schedule an appointment, as Kristyn said, bring us to the table. So we can ask you those questions, be a partner in your business growth. So here is a QR code for you to schedule an appointment with a banker that's closest to you to continue to have that conversation. Next, also as we go through our questions, we invite you to join our Key4Women program. You can use the QR code on the screen or go to key.com/joinK4W, and that's key.com/joinK4W. Also we love to curate programming that's going to be impactful. So we invite you to complete our survey that will be posted in the chat. That helps us to inform and influence our programming to make sure that it's really the programming that you need, that we'll continue to deliver on a complimentary basis to ensure that you can continue to grow and sustain your business. And last but not least, we do have currently happening for national small business month, a bundle offer that's going on for our small business clients as well. Our back to business offer that you can talk to a banker about as well as you set those appointments. So with that, I'm going to go back to our original question and thank you again for posting that. And Michael, that's going back to you about the importance of these loyalty programs. I'm sure that it can vary by product, by service, by business, but can you give us a general sense of what's the typical cost of a reward program? And is it worth the payoff? I know we talked about that growth, but when we think about the investment from a small business, and what does the typical cost look like?
Yeah, okay, great question. So there's going to be two. There's going to be, how do you get into the game, which is going to be like a one time investment. If we're talking about let's just use gift cards for an example, I want to invest in plastic card stock. Well, first you're going to need something to process that card stock, and usually a credit card terminal, a POS system, there are many of them out there, most of them can do this. So you've got to acquire the technology, which is also going to process your credit cards, your debit cards, you know, manage your menu, your inventory, everything else. It will also process the gift card. Then you need to buy the physical card stock, depending on how many you buy. Obviously bulk becomes cheaper as you create economies of scale. You're talking anywhere from 38 cents to a dollar a card. So if you buy a thousand cards at 38 cents, you can, you know, kind of figure the math out there. It's a few hundred bucks and now you have the cards. Then there's the ongoing cost, which is all right, I want to use these cards, I want someone comes in and they want to buy a gift card from me, let's just say my average ticket is $100. They're going to buy a gift card. They're going to give me $100 and I'm going to load the gift card with a hundred dollars. And that's usually between one and two point half percent, one-time fee to do that. So let's just use the highest $2.50. And your customer walks away with $100. So basically you're spending $2.50 today to see if your $100 is going to come back later, but they gave you a hundred bucks, right? So you have the cash flow now. And basically it's a marker for when they come back. Now here's the good news gift card holders spend 30 to 50% more than the card. So you're going to overcome that in this case, $2.50 and that's plastic gift cards. There's digital gift cards like QR code, same thing, there'll be a redemption. Your POS system is going to spit it out on either a receipt or text message to your customer if they're standing in front of you. But then there are like no cost solutions that would come, like, as it comes with your card processing solution, whether it's a gateway, or a POS system, these could be things like promotions, rewards. There are many just very basic ones that you can get yourself on social. You can get yourself online, you can create happy hours and there's no additional fee for it. It's a benefit of already investing and using the technology for your core processing. So it can vary from $0 of ongoing costs to, you know, maybe a little bit of a percent here and there, the question is, what would you be willing to pay right now to earn a new customer? Would you pay $2 to earn a new customer and to keep an existing customer? And if the answer is yes, investigate and see if it's something that, you know, makes sense from a cash flow perspective for your business.
Mm. That's interesting. And I like the way you went through that in terms of the nominal investment of figuring out how much for the physical card, how much if you do it online, how much you're paying today, as we think about that cash flow being so important. And of course, having an accountant help you to keep track of that as those dollars continue to then be used on products or services going forward. But I think that's interesting that not a lot of smaller businesses, as you mentioned, tap into. We see it a lot on the larger scale, but on the smaller scale, getting those returns is something, I think it's a great way to continue to engage. And also just from that online presence. So I'm going to ask to each of you as well, if there's any questions that you think about the connection from a physical store to more online presence, of course, because of these last two years. What are some of the best practices and/or gaps, you know, kind of cautionary tales that you've seen that we really want our businesses owners to be cognizant of?
Can I start on that one?
So if you don't mind. So either it may be two, maybe three, but you either have a situation where you have a completely disconnected storefront and you don't have any mechanism of getting your store online. Maybe you've got a traditional cash register with a credit card terminal, and there's just nothing to do there, right? There's no way to physically connect this, you know, physical transaction machine to the digital space. So you've got two things to ask yourself. Do I want to continue to run my business this way? And there may be pros and cons to doing it that way, and then go figure out how to get online. Create a domain, you know, web hosting, find a payment gateway, integrate a shopping cart, or do I need to accept maybe that this here is a sunk cost and I need to reinvest in new technology that will do both. If I have new technology that replaces the cash register, the credit card terminal, does everything that that currently does plus likely more because it's new technology, right? It may do things like scheduling your employees and it may run your inventory or your menu, host the payment pages and invoices, and connect and create your online ecosystem for you. So you don't have this sort of bifurcated. My store is over here, but my online is over here and now I have to have sales and finance and accounting. Think about my business in two stories. There's many customers do it both ways. So I don't think there's a right answer. I think there's your answer. Is your answer this way or another way? And there may be some variability there where we can get creative, but talk to us, right? We don't have one way to do everything. There's many ways that we can skin the cat, as they say. So just have the conversation with your banker connect to the subject matter expert in payments that can really understand what you have and you may have other needs that weren't part of that discussion, like, well, what about connection into my accounting system? I use QuickBooks or Zero or whatever, or I have an ERP. It would be great if all of that would speak to each other. Can we do that? Maybe. Let's take a look and see what you have and discover whether or not you need one thing or several. And if it's several, you know, obviously we can find economies of scale and itch into the right solution.
I like that. And there's a lot there as we think about what's actually right for each particular business. And Matt I'm going to go to you as we think about some of those businesses. And as Michael talked about from a merchant perspective, what if they don't accept card today, or are there certain things that we think about if folks want to start accepting card or any best practices from a merchant perspective that you think are really beneficial to business owners?
Yeah, no, absolutely. So, I mean I would say that's a question for your bank first and first and foremost is what type of credit card processing do you offer to the business? And getting connected with a trusted expert? So, you know, my sales team is abroad across our entire footprint merchant sales advisor team that are equipped to have all the conversations that Michael spoke about today from, you know, physical in-store presence, to this, the digital experience as well, and helping with everything in between to consult on what we do. And then also just what you need to do overall as a business in order to attract and retain new clients through that space. So I think it's, you know, having that conversation with that trusted expert. You know, I think the perception of, well, not perception, but I think we're seeing far less and less businesses not accepting card, because I think the true reality is that that many are realizing is card usage is growing significantly. I think up near like 8% year to year. And as that continues to grow, the demand's going to be there. And as I go back to my previous comments about meeting a client where they're at in order to win their business and then retain their business, you need to offer those multiple channels for a client to pay and meet where they're at. And most likely than not it's they have a card in their wallet that they're looking to pay with.
That's awesome. And as I think about it, we're getting ready to close our program. So again, thank you to our team of experts for being here and all of you for participating in our program today. Again, if you are not a member of Key4Women, we invite you to join at key.com/joinK4W, again, key.com/joinK4W. I'm going to give all of you the last word to wrap up with about your last 30 seconds that of information that you want to leave our audience with. So we appreciate the time of everyone today. And I'm going to do just a quick round-robin and Matt, I'm going to start with you, Michael. I'm going to go to you next and Kristyn, I'm going to give you the final words. So thanks for everybody for joining and we look forward to you the next time. Matt, take it away.
I would just say that. Well, first off, thank you, Rachel and team for having me and thank you to the audience here today for your engagement, for joining, I would just say, be open to new conversations with your bank. I think the world has changed quite a bit, as we all know it over the last couple years, and it's time to think about business a little bit differently. Banks are evolving. The solutions we have are evolving. Fraudsters are evolving. Our clients are evolving. We need to start thinking about all of that. Your bank is there to help you. They have solutions to help, again, save you time, money, and risk. It's just about going in and asking the initial question, getting in front of the right experts that can help guide you down that path, to what you need to do to prepare your business and put your business in the best in the best possible place for the future, not for the current or the past.
Very insightful. Michael.
Yes, first of all, I would just say thank you to everybody in attendance, and there is no us without you. So what you do each and every day makes it possible for us to try and just keep up with you and provide the services that you need us to help you along the way. So just, I would say, be vigilant in your attention to what's happening in, you know, this kind of cyber community around crime, cyber crime, this kind of a thing. And obviously there's a bright light on the future here of the interaction between businesses and consumers or clients in the payments ecosystem. Talk to us, let us help you figure out what the best connection points are to make. And if you already have the best solution, you can trust us to say you're good. You don't need to do anything else. You've got the best solution in place. And your bank should be an expert at being able to identify when that's the case.
Awesome. Thank you. And Kristyn, for our final words.
Yes. I just first just want to say thank you. The Key4Women program and Rachel and you and your team, just to be able to provide a platform like this for us to be able to educate small business owners. I think if I want them to walk away with anything today, is technology is your friend and your banker is your partner. I'm available on LinkedIn, I've already connected with one of you and I look forward to conversations. I'm always accessible and we have a team of experts that are behind every one of our branch managers that's willing to partner and help you with your goals. You started the business with a dream and we want to make sure that you live out that dream. So please, you know, stay connected, you know, continue to be a participant in Key4Women and thank you for the time today.
Perfect. Thanks everyone. Have a great afternoon. Take care.
Key4Women brings you an in-depth discussion on the latest technological tools small businesses are using to improve performance. In this seminar, we’ll explain how to create an “always open” experience for your clients, how to automate and speed up payments and receivables, mitigate the risk of online fraud and more.
Featuring KeyBank Experts
KeyBank, Senior Vice President
National Sales Manager
Business Banking Payments
KeyBank, Senior Vice President
Small Business National Sales Leader
KeyBank, Vice President
Senior Emerging Product Manager
Key Merchant Services