Banking on Travel
By Larry Collins
Since 1991, Mary and Joseph Shay of Hudson have traveled to the Canadian Rockies, the Grand Canyon, Alaska and Hawaii, among other scenic destinations, and they recently got back from California where they took in San Francisco, the Napa Valley and Lake Tahoe. And just about every month they’ll take a day trip into Boston for a play or a museum visit, a ball game or some other event, with a nice lunch and the company of 40 or 50 friends.
“It really is a great program. Everything is taken care of. You don’t have to worry about a thing,” says Mary.
“I think they do an excellent job. All you have to do is get on the bus or the plane. You don’t worry about your baggage or anything,” says Joseph.
Joseph and Mary Shay are retirees, ages 83 and 76, respectively, and both belong to a program called Golden Time, a travel and social activity “club” made up of customers of Hudson Savings Bank.
Golden Time is one of a number of similar programs offered by banks to their over-50 customers in an effort to attract high-balance depositors while at the same time forging closer relationships with this very important customer base. A central membership requirement for all the programs is a deposit balance, in savings, checking accounts or certificates of deposit, totaling anywhere from $10,000 to $25,000. However, most banks allow customers with lesser balances to join for a modest monthly fee, usually $10 to $20.
The travel component is just one part of these programs; also offered is a variety of financial services, everything from free checking accounts and wire transfers to free traveler’s checks and notary public services.
More Than Marketing
While these programs are good marketing efforts, they also provide meaningful activities and social contacts – friends, really – for hundreds of senior citizens across the state. The activities range from day trips via luxury motor coaches to nearby attractions, to more exotic fare such as one-week to 10-day excursions to Alaska, Canada and the Caribbean. Some more extensive programs even offer escorted trips to Europe.
“It takes a lot of people out of Hudson who probably wouldn’t travel far without this program,” says Carol Parker, senior vice president at Hudson Savings. “The Golden Time members love the idea of prepaying, including tips and everything, getting picked up at the bank and returned to the bank, safe and secure. We have nine or 10 day-trips a year, one trip for two or three nights, and one a year that lasts a week. We’ve been to France and Italy on that one.”
Hudson Savings’ President and CEO Mark R. O’Connell sees the club accomplishing a two-fold benefit, for the bank and for its customers: “Golden Time gives us an opportunity to connect with some of our best customers and allows us to strengthen our relationship with them. The club also gives the members the opportunity to share in good times with old friends and to make new friends by participating in the travel events.”
The trips and other activities don’t come gratis. Participants pay up front for tickets, lunch or dinner and, on the big trips of a week or more, the price tag can be several thousand dollars. But as virtually all the bankers and customers interviewed for this article agree, the prepayment component, everything included, is a major reason why the programs are so popular. Another more unexpected reason was the special affinity that club participants have: the big thing they have in common is that they all use the same bank, and it happens to be an institution in which they have a great deal of trust.
William G. Kelly who, before he joined Bristol County Savings Bank in Taunton, ran his own firm, WGK Associates, that developed travel clubs specifically for banks, has a profound understanding of what motivates the bank customers who flock to travel club trips and activities.
“There are many people who will not travel with, say, a church group, or with a travel company, who will travel with their bank. The fact is we enjoy a high degree of credibility with our customers, especially our senior depositors. If the bank says this is a safe trip, well, then it must be safe because [we] wouldn’t do something that wouldn’t be safe, so they’ll travel with us. Also, they won’t travel with their church group because the people in the church group are, well, they’re a bunch of old fogies. The affinity here, the commonality here is their deposits, it’s not their age.”
A Popular Guide
Kelly was seconded here by one club participant, Paul Taylor, who observed, “One of the great things about our club is that we get people in their 50s, younger folks, so it’s not just a bunch of old fogies, not to be ageist about it, you know what I mean?”
How old are you, he was asked. “A young 78,” he replied.
Kelly, who is now a senior vice president at Bristol County Savings, developed what has become one of the more ambitious travel programs, Prime Time. Back in 1991, when he sold the idea to Bristol County Savings, bank management decided they’d hire him along with the program. An enthusiastic promoter of the travel clubs, Kelly still provides consulting assistance to Hudson Savings Bank, which is well out of Bristol County’s marketing area. Kelly is also a popular escort on some of the more far-ranging club journeys. He likes to surprise his fellow travelers with little “extras.” For example, on a trip to Ireland, he arranged for a visit to the American ambassador’s residence in Dublin. Then on a Hudson Savings Bank trip to Canada, the then-American ambassador, A. Paul Cellucci, joined his group for lunch, with dessert at the ambassador’s residence in Ottawa. Since Cellucci grew up in Hudson, the encounter had the flavor of a family reunion.
“The bank established Prime Time in 1991, essentially as a senior program, a different way of attracting and keeping our high-deposit balance customers,” Kelly recalls. “It’s been very well received, and it continues to grow each month. We have over 3,000 members in the program.”
Dennis Kelly (no relation), the bank’s president and CEO, concurs. “Since we introduced it almost 15 years ago, the Prime Time program has played an important role in retaining and increasing deposits from a key market segment, our senior customers. The travel component gives us the opportunity to differentiate ourselves from the competition. Every bus that leaves our parking lot has a representative from bank management who serves as an escort for the group. I can’t think of a better way to demonstrate to both our customers and staff the level of commitment we have to Prime Time.”
Bristol County Savings dropped the age requirement for Prime Time membership about a year ago. Its balance requirement is $25,000, and those depositors that don’t meet it can become members for a monthly fee of $15.
“Quite frankly, the market segments itself,” says Kelly. “It’s mostly seniors who travel with us. They like it because of the old leave-the-driving-to-us concept. We handle all the details. All they need to do is show up here at the bank.”
As with the other travel club programs, the bulk of the Prime Time activities are composed of day trips, including lunch or dinner, with participants usually numbering from 50 to 120 persons.
“Finding restaurants that can accommodate groups that large is not always easy,” says Kelly.
The largest group Prime Time has dealt with numbered 300 members, when some years ago the bank chartered the Spirit of Massachusetts for a Boston Harbor cruise. Prime Time’s activities are so popular with members that some events have to be scheduled for two days.
“For example, if we’re going to the Boston Pops, the most we can accommodate is 100 at a time. We’ve had to schedule two Pops nights to accommodate all the people who wanted to go. We have a waiting list for the Boston Duck tours,” says Kelly.
Off to the Canadian Rockies
As this article is being written, 44 Prime Time members are touring the Canadian Rockies by rail. The double rate for the spectacular nine-day voyage was $2,679, covering everything from round-trip fare to Vancouver to luxurious accommodations throughout the Canadian Rockies. Among the Prime Time members enjoying this trip are two members of the Bristol County Savings board, which brings up a point that all of the bankers interviewed for this article believe is of primary importance:
“It’s important to show commitment to the program from the top down,” William Kelly asserts. “Our CEO, Dennis Kelly, has escorted a number of trips. It’s important that our customers see that senior management takes an active interest in the program. And it’s also important for our employees. When employees see that senior management takes an active role in the program, then they realize that it’s a significant part of the bank. It’s a phenomenal program.”
Prime Time members serve on an advisory committee that meets quarterly to discuss the direction of the program and to come up with new activities.
“We try to host different events each year, but there are some events we do on an annual basis, the Pops being one and a clambake another. For the most part we’re looking to come up with different events every year, and the best ideas come from the membership,” says William Kelly.
Another bank where Kelly had a hand in developing a travel club is Medway’s Strata Bank, which has been operating its Strata Club for the past 11 years. Some 2,000 customer households are members, according to Pamela J. Montpelier, Strata Bank’s president and CEO, and these households represent 30 percent of the bank’s deposits. And while Strata Club requires a $25,000 deposit balance (with a monthly $20 fee for members below that balance) the average balance for the 2,000 households is closer to $75,000.
“We don’t position Strata Club as being in the travel business,” says Montpelier. “The way we position it at our bank is we’re thanking our top balance customers with a nice membership program, kind of an extra thank-you, some value added for being a loyal long-term customer. We’re not about booking trips, we’re about spending time with our clients and appreciating them.”
In-House Efforts Vary
The amount of in-house work done on the travel clubs varies from bank to bank, with some banks largely depending on outside vendors – travel agents, tour operators, etc. – while others prefer a hands-on approach. Strata Bank, for example, is assisted by one outside consultant, but does a great deal of the work itself.
“We do a lot of planning ourselves,” says Montpelier. “We’ve been doing it for 11 years, so we’ve come up with a system where we know where we want to go, what trips work better than others, and we try to have a variety. We do use one outside consultant to help us get tickets and that sort of thing, someone who can devote more attention to the details. Once and awhile we’ll use a travel company, but we tend to do it ourselves with her [the consultant’s] help.”
Strata Bank produces a quarterly newsletter for Strata Club members that has proven helpful in obtaining valuable feedback from club participants. Last year, for example, the newsletter asked readers to identify their five top travel destinations. Unfortunately, Montpelier adds, 9/11 put a crimp in the club’s foreign travel agenda, although next February (Feb. 22-March 4) club members will be taking a cruise through the Panama Canal. (The cruise package provides an example of the rates customers are charged for longer-term trips: Based on double occupancy, an inside stateroom cabin costs $2,090 per person, an ocean-view cabin costs $2,295 per person and a cabin with outside balcony goes for $2,525 per person.)
Montpelier, like other CEOs of banks with travel clubs, believes that senior management commitment to the program is vital, and she practices what she preaches: “Last summer we took a cruise to Alaska. We had about 50 customers on that one, and I went along.”
Another woman on board was 78-year-old widow Yolanda Ferzoco of Millis, a well-traveled Strata Club member: “I’ve been a member for 10 years. I went to Alaska last year, and I also went on a Caribbean cruise. These trips are geared for people who are married or single, so they’re really good for people like me. And the day trips are wonderful, too. I’ll be going to the Pops soon. One of the good things about the program is that you always pay up front, so you don’t have to worry about anything; tickets, meals, parking, everything is taken care of. It’s just a wonderful program.”
Travel vs. a Free Toaster
Sometimes, the travel club idea takes a little time to take hold. Take the experience of Dedham Institution for Savings, for example, as related by Lois Lovely, assistant marketing vice president who runs the travel component of Dedham Savings’ CheckPlus program.
“About 13 years ago when we started the CheckPlus program, we had focus groups come into the bank, customers and non-customers, 50 years of age and older, and we asked what would they want in a checking account package. We actually put the travel club bee in their bonnet. We asked them if they would like to travel with Dedham Savings. Well, most of them said no, there were plenty of travel agencies around and there were Council on Aging activities they could take advantage of. What they wanted was higher interest rates on their deposits, and no fees on their checking accounts. Anything free. They even said they’d prefer a free toaster rather than a travel club.”
So, for the next two years Dedham Savings concentrated on giving their senior customers what they said they wanted – free stuff. CheckPlus membership grew but not at the pace management wanted.
“If I remember correctly we had about 1,500 CheckPlus members back about that time,” says Lovely. “It did grow slowly, but after a couple of years we decided to just slide the travel club into the program. In the beginning we probably did about four or five trips. We slid it in there, invited CheckPlus customers on our first trips, and it just took off from there. Today, there are more than 10,000 CheckPlus customers.”
In a different wrinkle from other club programs, there is no minimum balance required for customers over 50, while it’s the customers under 50 years of age who must maintain a balance of $10,000 or more.
“We’ve been to Alaska, we’ve been to Ireland, we’ve been to Italy, and we do many, many day trips, and most of them are fully booked,” says Lovely. “In September, we’ve got 54 people going down to New York City to see the Red Sox play the Yankees.”
Dedham Town Treasurer Frank Geishecker, 75, and his wife have been on a number of trips with Dedham Saving’s travel club and, he says, all of them have been “outstanding.”
“We’ve been to Niagara Falls, Boothbay Harbor, and last spring we went to Washington, D.C. I hadn’t been in Washington for at least 25 years, when our kids were still in college. It was wonderful. I haven’t been on a bad trip yet,” says Geishecker, a former Dedham Savings board member for 30 years.
Dedham Savings’ President and CEO William G. Gothorpe is accustomed to hearing good things about the bank’s travel program, and not just from former board members: “We’ve been very pleased with the CheckPlus travel program. I’ve received many customer compliments about their travel experiences, and the excellent service our bank and travel personnel have provided.”
A Common Theme
If there’s a common theme running through the experience of all the bank travel programs it could probably be summed up in the plain-spoken observation of Ann Sherry, vice president of marketing for Medway Co-operative Bank, who is in charge of the bank’s fledgling Co-op Club, established only two years ago.
“It’s a great way to get to know your customers,” says Sherry.
Currently there are 199 household members with 292 individuals who are Co-op Club members, says Sherry, and while the bank does not limit membership to seniors over 50, the natural market segmentation cited by Bristol County Savings applies at Medway as well. Seniors tend to participate in the activities offered by Medway Co-operative.
“Most of our trips are day trips,” says Sherry. “Once a year we’ll do an overnight weekend, but we haven’t reached the point where we’re doing week-long events. Three days is the longest we’ve done so far. We haven’t done any foreign travel yet. At some point we might, but we don’t have any immediate plans for that.”
Framingham Co-operative Bank’s Club Advantage is another travel club that hasn’t been around all that long. It really got going in the millennium year 2000. But it has had the unique advantage of having a manager with nearly two decades of bank travel club experience, someone who reinforces Sherry’s axiom that the clubs provide an opportunity to really get to know your customers, and for the customers to get to know you. Rachel Stewart, marketing officer at Framingham Co-operative since 1999, ran a travel club at another bank for some 13 years before joining her current employer. When she moved to Framingham Co-operative some of her old travel acquaintances followed.
“I guess you could say I’ve developed a following over the years,” she says modestly.
Because of her extensive background in the field, Stewart has amassed not only a loyal following of bank customers but also an ample Rolodex stuffed with the names of reliable vendors that have served her well down through the years. With the help of “strong and vocal” club members, Stewart decides on the trips, then contacts her vendors and puts together a busy itinerary that this year included two visits to Mohegan Sun to take in Debbie Reynolds and the “Wunnerful Women of Lawrence Welk,” a lobster bake and a tour in Portland, Maine.
Carlo Lepordo, 72, one of Stewart’s loyal followers, says: “We go to places we ordinarily wouldn’t go. For example, I don’t like to go to Boston because you can’t find your way around the place anymore. But when Rachel organizes an event there you don’t have to worry. Everything is taken care of. We went to see Phantom of the Opera there a while ago, and we’ll be going into the North End for a tour and dinner. We go at least once a month with Rachel.”
Now if there’s any doubt why banks with travel clubs go to all the trouble, listen to Lepordo wax warmly about his experience at Framingham Co-operative: “You know, it’s almost like we’re one big family. I mean, all the people at the bank are like Rachel, very warm, very cordial. Why, they even say hello to you when you walk in the bank.”