Deluxe's Business Segments

Deluxe Corporation is the largest provider of checks in the United States, both in terms of revenue and number of checks produced. We design, manufacture and distribute a comprehensive line of printed checks. In addition to checks, we also offer checkbook covers, business forms, address labels, self-inking stamps, fraud prevention services and customer retention programs. Our checks and business forms are compatible with nearly all of today's off-the-shelf accounting software packages. We provide check printing services for more than 8,000 financial institution clients nationwide, including banks, credit unions and financial services companies. We also market products directly to consumers and small businesses through direct response marketing and the Internet.

We operate three business segments: Financial Services, Direct Checks and Business Services.

Our employees are guided by five key business objectives: revenue growth; customer loyalty; talent and diversity in our workforce; cost management; and transformation. The key strategies to accomplish these objectives include pursuing acquisitions which leverage our core competencies, are accretive to earnings and generate cash from operating activities; strengthening our leading position in the markets in which we compete; and expanding into closely related or adjacent products and services.

Revenue growth. We intend to pursue new clients and customers for our existing products and services, as well as sell additional services and new product offerings to our existing clients and customers. We plan to accomplish this objective by pursuing acquisitions and developing and executing effective marketing offers and programs in existing and new channels. We also plan to increase revenue from new and existing customers by using selling strategies that maximize the revenue generated from each order.

Customer loyalty. We intend to strengthen our relationships with customers by providing new and enhanced products and services, as well as continuously improving our processes and tools to deliver increased customer satisfaction.

Talent and diversity in our workforce. We invest in our employees to attract and retain those who have the skills and motivation to deliver on our commitment to customers and support our strategic initiatives.

Cost management. We invest in technology and processes that will continue to lower our cost structure. Past initiatives to reduce costs and improve efficiency include developing proprietary print technology, consolidating facilities, implementing more efficient manufacturing processes, selectively outsourcing non-core activities and increasing the use of electronic channels for order placement. Our operational excellence is a contributing factor to our ability to successfully execute an acquisition program.

Transformation. We intend to develop or acquire products and services that will generate revenue not entirely dependent on the number, size or frequency of check order transactions.

Competition

The payments industry is highly competitive. We face considerable competition from at least six other check printers and expect competition to intensify as the check printing portion of the industry continues to mature and decline. We also face competition from alternative payment methods, including automated teller machines, credit cards, debit cards and electronic payment systems, such as electronic bill presentment and payment. As we expand our e-commerce presence, we face competition from check printing software vendors and from Internet-based sellers of checks and related products.

Deluxe Corporation: Segments, Products, and Services

Deluxe Corporation operates primarily through three distinct segments: Financial Services, Direct Checks, and Business Services. Each segment offers a diverse range of products and services tailored to meet the specific needs of consumers, financial institutions, and small businesses.

Financial Services

Deluxe Financial Services is a leading supplier of checks and related products for financial institutions. Some of the key aspects of this segment include:

1. Check Production and Merchandising:
- Deluxe specializes in producing a wide variety of checks, including personal checks, business checks, and specialized check designs. The company collaborates with financial institutions and offers licensed designs featuring popular brands such as Disney®, Warner Bros®, NASCAR®, Harley Davidson®, Coca-Cola®, and Laura Ashley®.
- The segment provides comprehensive merchandising services, which help banks and credit unions enhance customer satisfaction and engagement related to their checking products.

2. Enhanced Services:
- Financial institutions benefit from an array of value-added services such as customized reporting, a tailored file management system, expedited account conversion support, and advanced fraud prevention measures. These initiatives promote stronger customer loyalty and increased operational efficiency.

3. DeluxeSelectSM Program:
- This initiative enables financial institutions to enhance their service offerings by providing clients with detailed information regarding checks and check-related products. By leveraging call centers, advanced internet capabilities, and point-of-sale support, this program cultivates a deeper connection between consumers and their respective financial institutions.

Direct Checks

The Direct Checks segment focuses on direct-to-consumer sales of checks and related products under established brands like Checks Unlimited® and Designer Checks. Important aspects of the Direct Checks segment include:

1. Product Offering:
- This segment provides a comprehensive range of personal and business checks, along with complementary products like labels and accessories.

2. Marketing Strategy:
- Utilizing direct response marketing, Deluxe has maintained a strong focus on digital strategies and e-commerce. Although the company has a long history in direct mail marketing, it has increasingly turned to online channels to attract consumers and process orders, with a significant portion of sales generated through e-commerce platforms.

3. Challenges and Adaptations:
- Faced with a decline in check usage and changes in consumer behavior, Deluxe has adapted its marketing approach to include digital channels, aiming to streamline the customer acquisition process and improve response rates.

Business Services

Deluxe Business Services targets small businesses and home offices with a dedicated suite of products and services. Noteworthy elements of this segment include:

1. Products and Services:
- The segment offers laser checks, manual checks, business forms, cards, stationery, and various business-related accessories. Deluxe has developed software-compatible solutions that integrate seamlessly with popular accounting software, enhancing user convenience.

2. Customer Acquisition and Support:
- Driven by collaboration with financial institutions, Business Services leverages a referral model, where new small business customers are directed to Deluxe at the time of account opening. A personalized onboarding experience helps businesses identify their needs and select appropriate products.

3. Fraud DefenseSM Service:
- The introduction of the Fraud DefenseSM service underscores Deluxes commitment to safeguarding its business customers against check order fraud and identity theft, providing an additional layer of security in the check ordering process.

4. E-commerce Initiatives:
- Deluxe has invested in online platforms that allow small businesses to access products conveniently. The website dedicated to business forms has become an instrumental part of the order fulfillment process, providing customers an easy way to browse and place orders.

Conclusion

Deluxe Corporation continues to adapt and innovate within each of its segments, focusing on enhancing customer experiences, expanding product offerings, and leveraging technology to meet the evolving needs of its clients. By integrating robust services across Financial Services, Direct Checks, and Business Services, Deluxe remains a formidable player in the checking and business products market, poised for future growth and customer satisfaction.