( Originally Published 1918 )
For years the banks were prone to look upon advertising as something beneath the dignity of a financial institution. They looked upon all forms of advertising as good enough for the merchant or the manufacturer, who had something to sell, some new goods the buying public should know about or a depleted stock that should be closed out to make room for new arrivals, but for the banks themselves—why it would be as out of place as for a high class law firm to advertise for new clients.
Early Limitations on Advertising.—While this hostile attitude towards advertising was held by the banks, about the only exceptions to the rule were the use of newspaper space to announce the names of the officers and directors and brief statements of assets and liabilities, designed to show that the particular bank was a safe one in which to carry an account. That was as far as a bank might properly go, according to the earlier views. Beyond that, dignity would suffer and it would tend to lower the high plane upon which banking was done and put it on a level with competitive lines of business.
Service as a Commodity: The banks lost sight of the fact that while all they had to offer the public was service, yet that service was a commodity and that it had to be sold, the same as a suit of clothes or a yard of cloth. With the growth of the country and the establishment of new banks in communities already served by old established institutions, there gradually crept into the banking business the sense of competition for business. It would no longer suffice to organize a bank and open it for business and then sit down and wait for depositors to come in and open accounts. Banks were primarily for service, so far as the public was concerned, and the service of a particular bank was therefore something that had to be sold.
Bank Calendars.—Breaking away from the prejudice against using newspaper space, the banks began to use advertising calendars for the home, office and store, as a means of keeping be-fore the people of their community the fact that they did have a service for sale. The calendar was something that took up wall space that could not be purchased, and yet it cost the bank nothing but the trivial price of the calendar, and it would be seen and consulted throughout the year, and thus the veiled suggestion of that bank as a business convenience, waiting to be used, was carried over the full period of the year.
Distribution of Calendars.-Naturally, as one bank in a community put out calendars, other banks took up the same medium, and were solicitous that their calendars should exceed in attractiveness the ones issued by the other banks. This brought about the use of finer and more artistic calendars, involving more expense, and hence the banks were more careful in their distribution. Soon the banks hit upon the scheme of sending out very neat announcements to a select list, stating that they were holding at the bank a very handsome calendar, which they would be pleased to deliver in person if the proposed recipient would call at the bank at his or her convenience. This gave the officers of the bank opportunity to become personally acquainted with prospective depositors, and proved most effective as a business developer.
Other Advertising Specialties.—Following the use of calendars came other advertising special-ties, such as blotters, plain or with glazed tops, some issued monthly and sent to a definite mailing list, letter openers, paper weights, metal letter clips, lead pencils imprinted with the name of the bank. All these carried the same idea of keeping in mind constantly the name of the bank and the suggestion that it was a good bank in which to carry one's account. Various methods were used to distribute these favors, and all with the idea of creating good will on the part of those who received these tokens to the end that they might become depositors.
Promoting Savings Accounts.—Formerly the bulk of the savings accounts were carried by the savings banks, organized for that purpose, and who did no regular commercial banking business. But now practically every commercial bank has its savings department, and thus comes into direct competition with the savings banks. The banks are finding that it pays to cultivate the savings habit of the people, and special efforts are being made to encourage the opening of these accounts by the children, as well as by the wage earners, for in time these accounts are likely to grow into business accounts, and banking connections once established, are not frequently changed. Hence we find that there are diversified methods of advertising employed to stimulate the savings departments.
Use of Dime Banks.—One of the most successful methods is by the distribution of dime banks. Some of the banks employ solicitors to call from house to house and office to office, seeking accounts in the savings departments through this means. One of the largest Chicago banks used a unique method of securing savings accounts by the dime bank method. A solicitor would call and ask if the person addressed could aid would save a dime a day. Upon being told that he could, the solicitor asked for the first dime, and put it in his pocket, inserting in the dime bank he handed the new depositor a metal piece that was stamped as redeemable for ten cents when the dime bank was returned to the bank to be emptied. Thus the only way to get credit for the dime given the solicitor was to continue to place a dime a day in the pocket bank and thus begin a savings account.
Home Banks to New Savings Depositors.—The most common practice is to give a handsome home bank to savings depositors on the opening of an account with an initial deposit of one dollar, thus covering the cost of the home bank and with something to spare.
Christmas Clubs.—The universal desire for cash for Christmas presents has induced most banks to arrange to open Christmas Clubs, in which the depositors pay in certain fixed amounts and about the middle of December receive definitely fixed sums with which to do their Christmas shopping. This runs into a very heavy volume, and is but another device to encourage systematic savings.
Vacation Clubs.—In the larger cities where the vacation habit obtains, more than in the smaller communities, Vacation Clubs are organized on the same plan as the Christmas Clubs, the idea being that the deposit of a small amount per week will, by the beginning of the vacation season, provide sufficient funds to pay for the depositor's vacation.
Educational Funds.—Leaving the attempts on the part of the banks to secure accounts from the younger members of the community, many banks reach out for the fathers and mothers and try to secure regular deposits in funds that they call the Education Fund. This makes a very strong appeal to parents who have not had the advantages of a thorough education themselves, but covet such for their children. Under this plan, a certain sum per week, for a given number of years, provides enough to send a boy or girl through college or some other higher institution of learning, and is a most commendable enterprise.
Home Building Funds.—Of more recent years, especially since the shortage of homes has be-come so acute, the banks have organized Home Building or Home Owning Funds, into which are paid fixed sums weekly or monthly, and when they have amounted to certain totals, then they are available either for building or the purchase of a home already built. In many of these plans a provision is made for straight mortgage loans in a certain ratio to the amount of the accumulated fund, to supplement the amount saved in order to complete either the building or purchase of the home.
Supplemental Space Advertising.—All of these various phases of the banking business owe their value and importance to the publicity that is given to them by the banks themselves. There-fore the banks are becoming extensive advertisers in featuring these services to the public through the medium of the daily press. It is all based on the fact that the banks have these manifold kinds of service to render the members of their community and they have come to see that the same medium that sells other commodities will sell theirs—Service.
Service to Business Concerns.—Just as the banks are advertising their varied forms of service to the individual members of the community, so they are advertising the phases of their service that appeal to the business concerns, whose accounts run into large volume. The banks are advertising that they welcome the opportunity to discuss any phase of the financial affairs of depoitors and to give counsel and advice as to how, particularly in times of stress, disaster may be avoided or how in good times business may safely be expanded. They advertise their collection facilities through their correspondent banks in other cities; their investment facilities through their own bond departments which have on hand gilt edged securities for sale.
Service as Executors and Trustees.—Here is another class of service that the banks are largely featuring in their current advertising. They call attention to the greater advantages afforded by naming them as executor or trustee, offering in such connection, the services of their own attorneys.
Publicity as a Confidence Builder.—No line of business is so absolutely and completely dependent upon having and enjoying the confidence of the public as is that of banking. Suspicion or rumor will cause untold damage. A run on a bank is the easiest thing to start and the hardest to stop. Once started, even if promptly checked, the timid will no longer do business with it. In all things connected with the conduct of the business of a bank, publicity is the greatest builder of confidence as well as of business itself.
The banks that advertise their varied forms of service are the banks that serve their communities best.