NEW ORLEANS - Behind all the upbeat sessions at this year's Consumer Bankers Association small business banking conference was a somber message for those reluctant to change their lending methods.

The message: If you're not already on the road to automating and centralizing your small business operations, you're probably losing your best customers to those who have.

Even worse, it will take more just to catch up with your competitors. No longer will an investment in technology to speed underwriting be enough to make you competitive. It requires a combination of technology, product development, personnel, and sales management to keep competitors from taking your best customers.

One banker at the conference, who admitted to losing out to Merrill Lynch & Co. on three deals already this year, said his goal is to own a relationship with his bank's customers impenetrable to competitors. To accomplish this, he said, his bank is changing the structure of its sales force.

"If the name of the game is share of wallet, then we have to look at the profitability of every product we can sell to small businesses and the small-business owner and share that profit with the sales force through commissions," he said.

The resulting commission system at his bank is designed to foster improved cross-selling efforts to let the bank get a larger slice of revenues from its small-business customers. So far, it seems to be working. The bank is averaging more than three products sold to each customer, beyond the traditional loan and checking account.

But just as important to the effort is giving the sales force the right leads. And this is where most of the technology focus seems to be headed.

Many banks already are committed to streamlining the back office, and many also are looking at ways to prescreen customers for everything from strong credit to determining what their needs are before approaching them. The idea is to use technology to streamline a sales process that seems to be focused on large groups of customers that cost the most to serve.

For these customers, the answer may be to offer a choice. In the conference's opening session, Robert Hall, chief executive officer of the Dallas-based consultancy ActionSystems, suggested offering customers a choice between low-service products at a lower cost or a high level of relationship service in return for higher fees.

By doing so, Mr. Hall said, banks would spend less time on unprofitable relationships and have less risk of losing profitable ones.

Compounding the problem is the fact that few banks even know how profitable their small business banking efforts are.

In interviews and responses to an American Banker survey at the conference, bankers overwhelmingly said they are only now able to estimate overall profitability of such relationships.

However, when asked about the return on assets of specific products - from term loans to cash management and business credit cards - a few made guesses. Most left the answer blank or wrote a question mark. On one response, a banker scrawled this honest but telling response: "No one in bank knows."

One thing that bankers do know is that a popular product - the SBA- guaranteed loan - is facing increased pressure from Congress. With federal budgeting just beginning, John Cox, associate administrator of the Small Business Administration, told bankers not to expect a resolution until late in the session.

"This is going to be a battle right down to the very end," said Mr. Cox. "I don't expect a budget until late in September."

While the agency is looking for all the support it can get during this period, Mr. Cox warned against bankers' and trade groups' preaching to Congress about the value of SBA programs.

"What works is the small businesses themselves telling their stories," he advised.

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