Banks Must Get Social with Small Businesses

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  • Former NFL player finds Twitter and Facebook help bring in four to six new loans a month. He has also found that having a light touch on social networks is quite effective at reaching consumers, as opposed to a harder sell.
    June 1

CHICAGO — Using technology to reach out to small businesses is often a challenge for financial institutions, and this difficulty is spreading to social media.

U.S. Bancorp's research around its social media strategy for small businesses revealed that the segment doesn't think much of their banks. And small businesses have reason to believe banks think they are unimportant — the companies are typically forced to use consumer banking platforms that aren't robust enough, yet unable to afford larger corporate banking and treasury management systems.

Business owners largely view banks as a venue for only transactions, as opposed to a partner, says Chris Swanson, vice president of small business internet strategy for the Minneapolis bank.

"Finance is viewed as an administrative task," said Swanson, who outlined his bank's strategy of using social media as a means to improve small business relationships during a session Wednesday afternoon at the BAI conference in Chicago.

The bank is using a Facebook page to operate contests in which business owners can post videos or messages on how well their business is performing or how good their ideas are, with cash prizes as the lure.

Another outreach involves YouTube videos on topics such as the "five basics for good credit," in which a small-business owner provides tips on how businesses can keep their finances in order.

The idea behind the strategy is less about selling specific financial services than it is about the bank lightening the mood between the institution and small-business clients, making the relationship more conversational and less institutional.

"We want to say that we're more than just a check processor," said Swanson. "There's this inherent judgment that goes with banks when it comes to small businesses," in that many business owners view banks as a possible barrier against getting a small business off the ground.

Using social media to present a "softer," more conversational message has made some headway in other sectors of financial services.

For example, New American Mortgage aggressively uses a mix of Facebook, Twitter and YouTube as a way to communicate its personality to mortgage borrowers. The company offers social media training to prospective realtors.

Only about 20% of what a lender puts on a social media site should be business-related, Casey Crawford, chief executive of New American Mortgage, said in an earlier interview. Lenders should opt to build sites dominated by the authentic voice of realtors and sales people. The strategy has helped the lender close about a half dozen new loans per month.

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