What's in a name? Quite a bit, according to small-business owners.

In a survey conducted for American Banker by Financial Institutions Consulting, 67% of entrepreneurs said their financial service provider's brand identity was as important to them as the names on consumer products they buy.

The business owners said they associated strong identities with convenience and reliability.

"We know that with a brand name, someone will be held accountable if anything goes wrong," said John Wilson, who operates Dandy Laundry Service, Laguna Hills, Calif., one of about 350 respondents.

The survey found the largest businesses-with $2.5 million to $4.99 million in annual sales-held brand names in the highest esteem.

Small businesses' preference for strong brands shows they can be swayed by well-funded advertising campaigns, said Charles Wendel, president of New York-based Financial Institutions Consulting.

"This shows the effect of the media and direct marketing," he added. "Big companies-American Express, Fidelity, Merrill Lynch-are causing this."

The survey's findings echo the results of one conducted earlier this year by Landor Associates, a San Francisco consulting firm. Landor found that big banks with large advertising budgets scored highest with the 800 senior business executives interviewed.

This emphasis on branding can be good news for banks that have marketing initiatives aimed at improving their image with small-business customers, Mr. Wendel said.

But the trend could go against banks whose identities or product lines are murky in the minds of customers, and that tends to be the norm, the survey showed.

Among small businesses that rely on nonbanks for financial services, nearly a third said they were doing so because their banks did not offer similar services, such as equipment leases, insurance, or investment accounts.

"The banks have been pigeonholed as being good at simple things and not good at complicated things," Mr. Wendel said.

Banks also appeared unwilling to cross-sell their complete product line to small business customers, or ineffective at it.

Of the small-business owners polled, 63% said they would be willing to move their personal accounts to the firm's bank, but no one had ever asked them to.

Some banks, such as First Union Corp., are trying to reverse that trend. First Union, of Charlotte, N.C., launched a marketing campaign last month designed to teach customers about available products. First Union bankers plan to call or visit each of its 750,000 small-business customers by mid- December.

"We hear so many times that, 'gosh, I didn't know you sell insurance,'" said Martha Hayes, head of First Union's small-business banking division.

The survey also found that microbusinesses-with $100,000 to $1 million in annual sales-purchase few products from banks yet demand expensive and frequent attention in branches.

While microbusinesses represent 80% of all small businesses, they may be the least profitable for banks.

Mr. Wendel suggested that banks attempt to sell additional products to these entities. Otherwise, he said, "you don't make any money on them."

Only 5% of the microbusinesses surveyed had signed up for PC banking and only 16% used ATMs for business purposes. Meanwhile, 26% of the largest businesses in the study used PC banking and 20% used ATMs.

Community banks, which tend to specialize in offering personal customer service rather than the latest in high-tech delivery systems, are the perfect match for many microbusinesses, Mr. Wendel said.

However, law firms, medical practices, and consulting firms in the microbusiness category are an exception to this rule. The survey found they are more likely to use PC banking, sweep accounts, and other sophisticated products. Professional practices are also more inclined to leave a bank over pricing issues and to view a diversified financial company as having higher-quality products than a bank, Mr. Wendel said.

Banks have to use special marketing techniques to promote themselves to these professionals. "The profit dynamics are very different," Mr. Wendel said.

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