Umpqua Bank is giving children all over the Pacific Northwest a taste of running their own business - and hoping to attract more entrepreneurs as customers in the process.
The Portland, Ore., bank has been handing out lemonade-stand start-up kits to kids throughout its markets all summer, even supplying the capital for supplies.
The message of the "Lemonaire" campaign is that no business is too small for the $8.1 billion-asset Umpqua.
"Umpqua Bank believes in encouraging entrepreneurs," print ads read. "Because a lemonade stand today may be a multi-national juice company tomorrow."
Umpqua is well known for its offbeat marketing. When it acquires banks in new markets, for example, it has employees travel around neighborhoods delivering ice cream or mowing lawns to get acquainted with customers.
At Umpqua branches, which it calls stores, customers and noncustomers can surf the Internet, drink Umpqua coffee, download music from local artists, attend poetry readings, or view exhibits by local artists.
Lani Hayward, executive vice president of creative strategies for Umpqua Holdings Corp., said, "You really have to find new ways to get people's attention these days."
Since the end of June the bank has distributed 2,100 of the starter kits to kids in Oregon, Washington, and northern California. Each kit contains a tablecloth, napkins, cups, $10 for additional supplies like lemons and sugar, and a "Guide to Starting Your First Small Business," which includes financial literacy lessons and gives suggestions on pricing lemonade drinks, advertising the stand, and storing cash.
Jim Nalen, creative director for Creature, a Seattle agency that developed the campaign, said it wanted a departure from the typical "very dry" bank ad.
Ms. Hayward said the campaign has piqued the interest of hundreds of small-business owners who have logged on to www.lemonaire.com or responded to the bank's e-mails about it. (The site features a video of a 7-year-old applying for a loan for a lemonade stand.)
E-mails directing people to the Web site and sent under the names of local business development officers have been particularly effective at generating leads, Ms Hayward said. Of the 13,000 e-mails sent to prospects through mid-July, 2,500 were opened. Five hundred prospects visited the Web site, and 120 sent replies to the business development officers, Ms. Hayward said.
The "Lemonaire" campaign is part of the "Main Street" small-business campaign Umpqua kicked off in May. It recently rolled out a merchant-funded program in its Washington and Oregon markets that gives customers cash back for shopping at local businesses using their Umpqua debit cards (the program will expand to California next week).
Umpqua gets interchange income through the debit program, which is administered by Rainbow Rewards of Denver, but its main objective is to make customers of the companies whose business the program is steering its way, Ms. Hayward said.
In 20 of its markets, Umpqua has started holding "Business Therapy" workshops where small businesses can network and get tips on running their companies.
The "Main Street" campaign aims to generate $100 million of business deposits, Ms. Hayward said. Though 70% of Umpqua's deposits were core deposits as of June 30, it could always use more no-interest demand deposits to improve its net interest margin, which fell to 4.34%, from 4.68% at midyear 2006. Its profit rose just 2%, to $19.9 million.
"Low-cost deposits is what it's about, but at the end of the day, we really want their whole relationship," Ms. Hayward said. The bank also hopes to make more commercial and industrial loans, which were about 22% of its portfolio at midyear.
Dave Martin, a banking consultant at NCBS, a SunTrust Banks Inc. subsidiary, said small-business owners are often bombarded with advertising and sales pitches, and banks need to break through the clutter. The lemonade campaign has "a better-than-average chance of actually capturing the attention of folks," he said.
Ms. Hayward said Umpqua has a reputation to live up to - it almost has to come up with quirky campaigns.
"This is about the only way we can do spots now, or else people will wonder what's up," she said.
