Norwest Scores Big with the Small Touches

Norwest Corp. is making a strong bid to change its image with small local businesses.

Using market segmentation approaches and an account package called Norwest Small Business Advantage, the Minneapolis superregional's Twin Cities Banking unit is out to dispel the notion - spread with some glee by smaller community banks - that Norwest was often a remote and out-of-touch presence.

Now Norwest has done what Scott A. Kisting, regional president, says large institutions will increasingly have to do if they expect to meet the growing demands of small companies.

"This was an evolution for us," Mr. Kisting conceded.

To signal its commitment, $67 billion-asset Norwest's lead bank started with a survey to explore the product needs and preferences of 100 businesses in its target market - those under $1 million in annual sales.

The result was the package called Norwest Small Business Advantage. It was augmented last week with Business Express/PC, which delivers sophisticated electronic banking services via personal computers.

"This business today is all about segmentation," Mr. Kisting said in a recent interview. "You really have to tailor your services to meet specific needs."

The survey revealed a significant desire for product simplicity and ease of access to banking services, and Norwest designed Small Business Advantage accordingly.

"They said keep it simple ... and it's a very simple product to understand," said Mike McHugh, senior vice president and regional manager of Norwest Twin Cities Banking.

It includes up to $100,000 in credit, business credit cards with a limit of $2,000, and no check fees.

An associated savings account offers a premium interest rate with no minimum balance requirement, and overdraft protection of $5,000 can be granted on the spot.

The Advantage package gives small-business owners free ATM cards and other access to account information - now also via PC - 24 hours a day. Cards can be issued to designated employees to make ATM deposits.

Norwest plans to add payroll services, cash management services, investment products, and other components over the next several months, Mr. Kisting said.

Business Express/PC is a step in that direction.

"For the first time, we're giving our smaller business clients the convenience of electronic banking from their PCs any time they want it," Mr. Kisting said.

Business owners with IBM-compatible machines can monitor account balances and activity, make check inquiries, enter stop-payment orders, reconcile accounts, transfer funds between accounts, print reports, and transfer data to spreadsheets.

Another feature allows businesses to provide employees with a direct- deposit option.

Business Express/PC banking costs $25 per account per month, on top of the software cost.

At least one small-business owner, who was present at the public unveiling of Small Business Advantage last month, sang Norwest's praises.

Small businesses "are an asset to society, and the larger banks really need to keep us," said Peggy Schatzlein of New Dream RCC Reynolds, a western clothing and tack store.

She said Norwest's attentions are likely to encourage her employees to bank there, too - a cross-marketing notion that Mr. Kisting said makes the small-business proposition especially attractive to bigger banking companies.

"This could be a very profitable segment," he said, noting there are more than 70,000 small businesses in the Twin Cities region.

"Our focus is to be customer-friendly and let them know we appreciate their business," Mr. Kisting said.

Norwest Small Business Advantage has been introduced only in the Twin Cities area but may eventually be expanded to other states and markets.

Ms. Panczyk is a freelance writer based in Chicago.

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