Everything was going fine between banks and their customers for years. Sure, things became routine and each took the other for granted at times, but that happens in relationships. In recent years, however, the “twenty-first century itch” set in when something irresistible strutted onto the scene; they called it digital technology. It had everything – intrigue, discretion, and convenience – and from that point on, banks and their customers wanted to try new things.

Deluxe Corporation found itself in a precarious situation as digital technology continued to turn heads. Since they had invented the first personalized flat-pocket checkbook in 1915, they had grown into one of the largest bank check suppliers in the U.S., but the demand for their flagship product was steadily eroding.

Lee J. Schram was new to Deluxe when he was named CEO in 2006. On his first day, he held a management meeting and asked for the financial report to be presented to the team. The monthly recap was not good; they were off 9-cents a share and the forecast for recovery in coming months was dismal.

After the CFO delivered the news, an awkward silence filled the room. Think cricket chirps. Or, Schram puts it a different way.

“It was the longest ‘Jeopardy’ moment I've seen,” he said, referring to the classic tune played during the game show’s final round that poses the most difficult challenge to the contestants.
It was at that moment, Schram saw that his team lacked accountability and though he was disappointed, he was not disheartened. Armed with his background as controller turned CFO of NCR Corporation, and having run a few tech businesses, he set out to direct the future of Deluxe by using digital technology to transform two major business units, financial services and small business.

Five Phases

The close of 2016 marked the seventh consecutive year of revenue growth for Deluxe with the trend expected to continue throughout 2017. “On our cash flow, which is important to investors and to people that want to invest in the stock and the company, 2016 is our eighth consecutive year of growth,” said Schram.

Often asked about the company’s transformation, Schram describes it methodically, much like his approach to leading the company. He packages the journey as the Five Phases.
The first phase, Assess and Act, began immediately in 2006 with an evaluation of Deluxe's processes, products, and services to determine the company’s strengths and weaknesses. The Strategy and Focus phase followed.

“I tell the story of who wanted to come to a dying check company other than me. Not a lot of people. And so, I had to create a strategy to focus on what we were all about – the idea that we were a growth engine for small businesses and financial institutions which today still is our vision,” said Schram.

Phase 3 Concentrated on Leadership and Culture, and Schram recruited a management team that is still intact today with little turnover. By 2010 they were ready for Phase 4, Revenue Growth, and since 2013 and through 2018, Phase 5, Transformative Revenue Growth has been in full swing.

Financial Institutions

As Deluxe challenged itself to create innovative digital solutions for financial institutions, they also had to figure out how to get banks to listen to what they had to offer. In a new technological era, why would banks think that their traditional check printer could also provide online banking services? Tough paradigm to shift. But Deluxe stayed on point and developed a suite of services to help banks attract, acquire, and retain customers. Company acquisitions strategically and consistently made over the years have played a major role in providing these services.
At the close of 2013, Deluxe acquired Destination Rewards, a leading provider of customer rewards and loyalty programs. Today, these programs have not only been embraced by banks, they have also helped Deluxe enter other markets.

“Our largest company on the bank side is Citi, and we have a program with them that allows Citi customers to get rewarded from everything from using their debit or credit card, opting to recieve electronic statements, and other services that help consumers and Citi with efficiency. These are all online digital rewards that we’ve come up with for them,” Schram said, adding that Deluxe has also developed programs for Verizon, Allstate, and AARP.

In 2015, Deluxe acquired Datamyx, a provider of integrated information, technology and analytics to help financial institutions target loan candidates. And, with a proprietary product called SwitchAgent, Deluxe makes it possible for consumers to switch banks electronically.

To date, Chase Bank, Citi, and U.S. Bank rank as Deluxe’s largest banking customers, and since Schram has been at the helm, Deluxe has made some 20 acquisitions to support their overall strategy.

Small Businesses

While financial services were evolving, an equal effort was fueling the transformation of Deluxe’s small business unit which traditionally provided customers with checks and forms. Through surveys and other touch points, Deluxe learned that business owners were struggling with areas of branding, promotion, and selling, so Schram decided to test-drive these services. And found a favorable response from customers. Company acquisitions followed and included businesses that provided logo design, website design services and hosting, email marketing, and search engine optimization and marketing.

“Think of all digital services that are helping small businesses brand themselves, promote themselves, and sell to their customers. That was our initial focus,” said Schram, adding that Deluxe currently works with 4.5 million small businesses, and hosts over one million websites.

Amanda Brinkman, who joined Deluxe in 2014 as chief brand and communications officer shared her perspective.

“We’ve helped small businesses operate their business for over 100 years, and about ten years ago we wanted to evolve those offerings. We saw that they were struggling with the marketing side of their business. We wanted to give them the opportunity to have that one-stop service partner that can help them operate their business with things like payment solutions, checks, and other services, but also help them market their business because we see how important that is and it can make such a difference in the success of small businesses.”

Brinkman has been instrumental in directing Deluxe’s own rebranding effort using content marketing. With rich stories told through Brinkman's brainchild, the Small Business Revolution, Deluxe is forging relationships with small business owners online and in person by providing an innovative learning platform. The initiative is shifting the perception of Deluxe from a has-been to a company to watch.

“For us, we were really struggling with brand awareness. People either haven't heard of Deluxe, or when they have heard of us they know us just as a check printing company. We're so much more than that,” said Brinkman. I was very proud that this idea could advance business goals of raising awareness about Deluxe, but do it in a very genuine way.”

According to Schram, one of Deluxe’s leadership principles states, “It’s hard to look smart with bad numbers.” Considering their consecutive years of growth and future projections, the St. Paul, Minnesota based company is looking quite bright.