Barnett Banks Inc. of Jacksonville, Fla., has gone after small businesses by offering cash management, a service that is usually associated with large-corporate banking.

The $38 billion-asset banking company is selling a PC-based system, called Barnett Connection, to businesses with annual sales of less than $1 million.

Before committing to the task of using technology to extend its corporate banking reach to the lower end of the market, Barnett execufives tested the waters carefully. "We surveyed our customers, we conducted focus groups, and we purchased research from vendors," said Douglas Freeman, chief of coqoorate banking. "We wanted to know what type of technology our customers would or would not use and why.

"Our strategy is to penetrate the small-business market and to provide the business owner with new tiers of access to the bank," Mr. Freeman added. "That way they can accomplish on site what they previously would have had to come to a branch to do." Launched in 1992, the Barnett Connection is a DOS-based program that a small-business owner installs on a PC. It enables the business owner to call into the Barnett mainframe m any hour of any day for account information.

The software enables a user to move funds between accounts, check recent lransactions, and perform status inquiries on checks and deposits.

In addition to these features, the software comes with an automated check-writing capability and account register that records transactions in categories defined by the user as soon as a check is written. The system also performs basic account reconciliation, and updates transactions daily.

If a small business does not have a computer, Barnett offers its corporate volume discount on IBM PS/1 hardware.

Barnett Connection was developed by Harbinger EDI, an Atlanta-based company that specializes in develop'mg software and resellmg it to banks. Harbinger has sold its small-business cash management product to more than 25 bank holding companies around the country. Some banks stay with the Harbinger name, InTouch Cash Manager, while others, like Barnett, take the "private label" approach.

"The product really has the small-business owner in mind," said Michael Tarpley, president of Michael D. Tarpley & Associates, a medical supply firm in Orange Park, Fla.

"I don't understand why everyone doesn't use it," said Mr. Tarpley, one of the first to sign up for Barnett Connection when it was introduced in 1992. "I use it to track my payments and receivables. If I'm working late, I can access my accounts at any time."

According to John Sunderlund, a principal at First Annapolis Consuiting in Maryland, successfully wooing a small-business proprietor like Mr. Tarpley is no easy feat.

"The midsize and community banks have been effectively doing it for a long time," the consultant said. "For the most part, large banks haven't figured out how to deliver services. In many respects small businesses will pay a premium for their banking to be made as easy as possible."

Barnett is in the unique position, though, of having a community bank "feel" at the local level, backed by the resources of a superregional parent. Each of 31 subsidiary banks operates separately, relying on the parent company for marketing materials, direction, and other support.

For example, Barnett Banks decided that National Small Business Week created an important opportunity to reach out and recognize small-business owners throughout Florida, and a chance to make promotional points about Barnett Connection.

During National Small Bus'mess Week, which took place in May, each of the 31 Barnett Banks devised its own strategy on how best to tap the small-business market. The parent company provided advertising and marketing support.

According to Mr. Freeman, one bank organized a weeklong series of events that featured speakers on topics such as "how to start a small business" and "the impact of the tax law on small-business planing."

The speakers' series was cosponsored by the local chamber of commerce. At each event, the Barnett Bank had a booth set up to introduce attendees to the Barnett Connecfion and other banking products and services.

Promoting the Barnett Connection hasn't always been so easy.

"Training our staff was the biggest challenge in getting this program off the ground," said Mr. Freeman. "Anyone who has contact with a small-business customer in a branch is a potential representative of the product. We took care and lime in acquainting our employees with both the technology and the thinking behind why it was be'mg offered."

The training took a variety of forms, including on-site study with the vendor. Barnett employees also participated in role-playing exercises where they'd act out concerns and questions a small-business owner might have about the technology. "We're meeting our goals," said Mr. Freeman. "Before the Barnett Connection, many of our smallbusiness customers were handled by the [branch] office network. Thanks to technology and sound marketing, that' s changing."

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