With big banks directing traffic to the information superhighway, barbershop owners, antique dealers, and motel operators are detouring to community banks, thrifts, and credit unions, according to study.
About 11% of the nations eight million micro-market businesses those with $50,000 to $999,000 of revenue switched their primary business accounts to a smaller institution between 1998 and 2000, says Informa Research Services Inc. concluded that of Calabasas, Calif. 
The primary reason, according to Mike Marselli, the business markets analyst who supervised the study, is that most mom-and-pop shop owners still prefer human contact.
While large bank holding companies have focused their energies on reducing channel costs through expanding online capabilities, micro-market companies have quietly shifted their relationships elsewhere, Mr. Marselli said.
Informa surveyed more than 1,000 micro-market companies for its survey, which was released this week.
Thrifts and credit unions captured some of business that shifted from big banks, but the lions share went to banks with assets of $500 million or less. They now control 36% of the micro market, the study said, while banks with assets of $50 billion or more serve 33%.
If you read what comes out of [other research groups], you would think online banking is going to change the world, Mr. Marselli said. There is so much self-promoting hype in what people throw out to the media, but the market and the customers are saying, We dont care.
Charles Wendel, president of Financial Institutions Consulting, a New York research firm, said the study has important implications, because these companies make up about 95% of the U.S. marketplace. More important, he said, many will grow into midsize or big companies, so a banks success or failure in retaining them can affect growth prospects.
Mr. Wendel said his company had reached the same conclusions as Informa. A year ago or maybe 18 months ago, everyone was so focused on the Internet that they neglected everything else, he said. Now were realizing that it hasnt done everything people fantasized it would.
Betty J. Riess, a spokeswoman for Bank of America, said it offers its nearly two million small-business customers a variety of options for when, where, and how they access the bank.
In addition to online banking, Bank of America has three calling centers and 700 relationship managers dedicated to small businesses, which it defines as companies with annual revenues of $10 million or less.
Mr. Wendel said big banks have legitimate reasons for steering their small-business customers to the Internet mainly the need to trim operating expenses. And he acknowledged that most of the customers even small-business ones who try Internet banking like it.
The problem is that banks often do a poor job of selling the service, he said. They havent told their customers why online banking is a good value proposition and how its going to make their life easier.
Charles Howard, the president and chief executive officer of $515 million-asset Mahaska Investment Co. of Oskaloosa, Iowa, a holding company for four banks, said it plans to roll out a suite of new online features for its commercial customers later this year.
Nevertheless, he did not dispute Informas conclusions. To base an entire relationship on electronic media is going to be unsatisfactory to a lot of customers. People still want to talk to their banker.
C. Hunton Tiffany, president and CEO of $262 million-asset Fauquier Bankshares in Warrenton, Va., said his company has picked up several new small-business customers who objected to the Internet strategies their former banks were pursuing.
We appreciate the frustrations small-business people go through when they have to talk to an unfamiliar person and explain their situation over and over again every time they call their bank, Mr. Tiffany said.
Mr. Marselli said Informas study highlights the importance of assigning a relationship manager to each business, even small ones. We asked business owners whether they would follow their relationship manager if he or she moved to a new bank, he said. And 17% said yes.
Of course, providing individual managers to each of their small-business customers could be an expensive proposition for big banks, so Mr. Marselli and Mr. Wendel suggested designating less-costly telephone customer service agents instead.
Touch is a very important aspect of service, whether it occurs at a branch or over the phone, Mr. Wendel said.
