Barnett Banks Inc. is preparing for a big push into the small-business market that is expected to reach full tilt in early 1993.
Until now, Barnett's forte had been marketing to large corporate customers, said Douglas K. Freeman, the Florida-based holding company's newly recruited chief corporate banking executive.
"Elephant hunting" was the euphemism: "It was easy to spot one. And if you hit one, you could feast for long time," Mr. Freeman said.
But elephants in the Florida business world are in short supply. The $32.9 billion-asset Barnett enjoyed a big market share of a small audience, but only a small piece of a big audience.
The bank used to boast that it did business with 42% of Florida companies with sales of over $50 million and 30% of those with sales from $5 million to $49 million. But it snared only 11% of small-business customers.
That's a minuscule share of a Florida-Georgia market that includes 450,000 businesses with sales of less than $5 million.
With 89% of Barnett's market available for fishing, Mr. Freeman noted, "the ocean is pretty big for us."
Mr. Freeman rode into Barnett recently from California's Wells Fargo & Co., where he built a reputation for energetically - and profitably - building a small-business sector.
Moving Down the Scale
Analysts are applauding the new initiative. "This is a very good strategy for Barnett," said Richard Stillinger, an analyst at Keefe, Bruyette & Woods Inc. "The trend in banking is to move down the scale for potential business borrowers."
Nancy A. Bush of Brown Brothers Harriman & Co. calls Barnett's new focus "a very wise strategy," because "Florida is not a big business state."
Steven D. Hickman, Mr. Freeman's designated director of the small-business thrust, emphasized the "possibility" of seeking a market share as large as Barnett once had in corporate banking.
Playing catch-up, however, will not be easy. Ms. Bush predicts "a lot of competition from First Union Corp.," which recently purchased Southeast Banking Corp. and earlier bought Florida National Banks of Florida.
Barnett's network of 600 branches, Ms. Bush said, is "a very formidable weapon."
Ms. Bush said the bank will succeed if Mr. Freeman can impose the Wells culture on his Florida subordinates. The key will be converting Barnett's historical emphasis on deposit gathering to broader business relationships.
"Wells is the best in the business in bringing the sales culture to the branches," Ms. Bush said.
Barnett has developed a comprehensive training program for branch employees.
Mr. Hickman said it focuses "on teaching our people to bring the business to the bank, rather than waiting for it to come through the door.
"We intend for our people to go out and kick some tires with their customers," he said.
Barnett also intends to try a direct-mail campaign and is "batting around the idea" of delivering marketing messages to the personal computers of small-business owners, Mr. Hickman said.
"We are not putting some bells and whistles on a product which large corporations use and then marketing it to the small-business customer," Mr. Freeman said.
Barnett last month rolled out two flat-fee checking account packages for the small-business customer. Most competitors charge fees for each check written or deposited, Mr. Hickman said. Barnett believes that small business operators "don't want to fool with single-item fees because they want to predict the monthly cost of maintaining an account."
Earlier this year, Barnett introduced a software package that links small-business customers to the bank via computer and modern for funds transfers, balance and transaction reporting, and account reconciliation.
"We will have a wide variety of different credit products which will provide flexibility for the small-business customer," said Mr. Hickman. He promises loans with various permutations of "pricing, structure, maturity, and collateral."
The company's international division and Ieasing division also are working with Mr. Hickman's unit on products for the small-business customer.
Underwriting Made Easy
"We have made underwriting easy for our employees and our small-business customers to understand," Mr. Hickman maintains.
Barnett is promising a 48-hour turnaround for loan approvals, compared with up to a month in the past.
Neither Mr. Freeman nor Mr. Hickman will discuss the cost of the new small-business effort. But they expect to adapt the infrastructure for product development and technology operations that has already been developed for big corporate customers.
"We are making much more than a lip-service commitment to this market," Mr. Hickman said. "We intend to be the bank for the small-business customer."
Ms. Adkins is a freelance business reporter based in Chicago.