Small Business Online Payroll Payday for Everyone?

Transcription

1 Small Business Online Payroll Payday for Everyone? NACHA Payments Seattle, WA April 27, 2010 Rich Heller Director, Business Development SurePayroll Alicia Treadway First Vice President, Product Management Treasury & Payment Solutions, SunTrust Bank

2 Please turn off all cell phones or mobile devices Thank you to today s sponsors! This morning s refreshment break sponsored by The Royal Bank of Scotland All conference attendees will have free access to PAYMENTS 2010 conference session recordings. Attendees that registered onsite will receive details to access the session recordings within 10 days. Should you wish to purchase a CD-ROM, a special conference rate is offered to all conference attendees. Most of the education sessions at the conference can be counted towards your continuing AAP accreditation. If you are interested in becoming an Accredited ACH Professional (AAP), please stop by the NACHA & RPA booth. Please take a moment to complete session evaluations! Each evening attendees will receive an link to an online evaluation of the sessions offered that day. Anyone completing an evaluation is entered into a drawing for a chance to win a special prize!

3 Agenda Introduction Tremendous Growth in Online Payroll Opportunity Online Payroll Online Payroll Goals Research Market Analysis Focus Group Business Requirements Launch Pre-launch Marketing Marketing Plan Online Channel Lessons Learned 3

4 About SunTrust SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation's largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. Corporate Headquarters Key Locations As of December 31, 2009, SunTrust had total assets of $174.2 billion and total deposits of $121.9 billion. SunTrust operates an extensive branch and ATM network throughout the highgrowth Southeast and Mid-Atlantic states and serves clients in selected markets nationally. SunTrust provides clients with a full array of technology-based, 24-hour delivery channels, including Internet, PC, Automated Telephone Banking and Mobile Banking. 4

5 Tremendous Growth in Online Payroll Product growth almost doubles year over year Number of Online Payroll Clients Projected vs. Actual Number of Online Payroll Clients Q Q Q Q Q Q Q Q Q Q Q Q Initial Projected Actual Revised Projected Projections exceeded by 10% Client loyalty and Deposits increase 5

6 SurePayroll at a Glance Exclusively focused on small businesses (1-100 employees) The first 100% online full-service payroll provider The online payroll alternative to ADP and Paychex for small business Founded 1999, Chicago Headquarters Tens of thousands of small business clients $5+ billion in payroll funds managed in 2009 Pioneers in partner-driven, bank branded payroll business model Private label, co-brand and white label program options Selected payroll partner for many U.S. banks Award-winning products, customer support and financial performance since 1999 (PC Magazine s Editors Choice, American Business Award) 6

7 Opportunity Online Payroll Payroll is one of a handful of functions that all 16.5 million home-based business (HBBs) and 6.32 million small businesses (SBs) in the U.S need to do. However, many have been underserved by conventional payroll solutions. Online payroll services offer the benefits of payroll outsourcing services and the added advantages of control, visibility and reduced risk of errors at prices suited to small company budgets. Source: AMI-Partners 7 7

8 Under-Penetrated Small Business Payroll Market Payroll Company 20% Why they didn t outsource payroll In-house 64% CPA 16% 1. Lacked simplicity/ease of Use 2. Loss of Control and/or Oversight 3. Cost/Value Source: NFIB, Draft Worldwide 8

9 Traditional Payroll Options Payroll Option Decision Factors Do it Yourself Desktop Software (e.g., QuickBooks) Cost calculating and processing payroll yourself is generally the least expensive processing method Traditional Payroll Provider Time savings Service Features tax calculation/filing, direct deposit The worry factor you d rather pay a little extra to know that it s being done right Legacy it s the way we ve always done it, there s not a good enough reason to change Assisted Service (e.g., Bank Payroll Service or QuickBooks Online) Cost typically varies by number of employees, level of service, and payroll frequency, but still generally less than traditional Partial tax support most banks services will provide updated tax forms to assist you in making tax payments 9

10 More Banks Adding Online Payroll Payroll is one process that is clearly viewed as a pain point for many businesses. While many banks have offered proprietary or vendorbased payroll solutions to their clients for years, some banks have come to recognize the need to bring a simplified payroll solution down market to the small and micro businesses. A few banks lead the charge as trendsetters by fully integrating a low cost, automated payroll solution with their small business online banking platform. But, the competitive landscape is changing rapidly as more and more banks are adding (branded) online payroll to their suite of small business products. Source: Barlow Research 10

11 Small Businesses Want Online Payroll Understanding the Online Payroll Need Businesses want integrated payroll systems that will be easy to use, accurate, cost effective, Internet based and will work seamlessly with accounting programs and human resources. Source: 2008 Barlow Business Internet Banking Research Target Market: 97% of all U.S. Businesses have employees Desired Solution: Simple, user-friendly and feature-rich payroll application Tax calculation, reporting, and filing Affordable price Easier for small businesses to do payroll and bank with SunTrust U.S. SBA statistics 11

12 Building the Online Payroll Value Proposition Payroll Solution for Business with < 100 Employees Acquisition Build relevant small business product set Simplified payroll process Affordable alternative to traditional providers Integrated online banking experience Utilize branch network for product marketing Augment online offering High small business traffic Product Development Increased client stickiness Healthy revenue stream Profitable market segment Untapped source Cross - Channel Marketing 12

13 SunTrust Focus Group Purpose Conducted a focus group and telephone surveys of small business online banking clients to facilitate product development, and studied: General concept attitudes and behaviors toward online payroll Importance of online payroll features Findings 50% of clients handled payroll internally, 50% outsourced to a payroll provider or CPA New concept for small business owners Initial lukewarm enthusiasm and apprehension about their bank handling payroll Reinforced need for extensive training and communication Clients currently paying a CPA were most interested in the product 13

14 14 Key Business Requirement Alignment

15 How SunTrust Online Payroll Compares Payroll Option Do it Yourself Desktop Software (e.g., QuickBooks) Traditional (e.g., ADP, Paychex) Assisted Service (e.g., Bank Payroll Service or QuickBooks Online) Decision Factors Cost calculating and processing payroll yourself is generally the least expensive processing method Time savings Service Features tax filing, direct deposit The worry factor you d rather pay a little extra to know that it s being done right Legacy it s the way we ve always done it, there s not a good enough reason to change Cost typically varies by number of employees, level of service, and payroll frequency, but still generally less than traditional Partial tax support most banks services will provide updated tax forms to assist you in making tax payments How SunTrust Online Payroll compares Fully automated spend less time managing payroll and more time on your business Stay protected against costly payroll fines Less than half the cost of most traditional providers Process payroll and make any updates to payroll information when it s convenient for you Affordable price easy to understand and no hidden fees Full tax support all tax calculation/filing is done for you Includes value-added services direct deposit, employee online access, and HR Advisor package at no extra charge 15

16 Pre-launch Marketing Efforts Introducing the Concept Lead Capture Form 16

17 Online Channel Leverage online banking application for increased stickiness 17

18 Ongoing Marketing Efforts Online Payroll is a key component of SunTrust s marketing campaign focused on helping clients save time and money 18

19 Results Exceeded revised projections Positively impacted deposits Augmented marketing campaign Served as a best practice for future product rollouts CLIENT TESTIMONIAL SunTrust Online Payroll is one of the best additions I have ever made to my company. My company almost runs itself; they take care of anything that has to do with payroll and this frees me up to do the things that keep the jobs going. You cannot go wrong with this service with direct deposit for my employees my payroll takes less than two minutes a week, how much easier does it get? - Kenneth E. Witt, Kenneth E. Witt Carpentry, Inc. 19

20 Lessons Learned In-house vs. vendor solution always a tradeoff Vendor solution pros and cons PROS CONS Speed to market Loss of control Low up-front cost Coordination challenges Subject matter expertise Reputation risk Estimate ramp up period Training 20

21 21 Q&A