-
Small-business owners are generally satisfied with their access to funding and about one in five plans to apply for a loan in 2013, according to a new survey from Bank of America (BAC).
May 29 -
The long-held notion that community banks, by definition, provide exceptional customer service is getting debunked.
May 28 -
Online lenders threaten to seize dominant control of the market for small loans to small business.
May 23
In America, everyone recognizes the value of small businesses. Small businesses are the economic foundation of towns and neighborhoods, driving job growth and bringing energy and vitality to communities. With their local roots, relationships and market knowledge, community banks ought to enjoy a competitive advantage in providing banking services to local businesses. Yet, large banks account for about three-quarters of the small business banking market.
Community banks have yet to fully tap the small business market. Taking productive steps to develop strong and lasting relationships with local businesses should be an essential part of a community bank's strategy to increase their market share, revenue and profitability.
Today, small businesses make up on average about 10% of a bank's customer base and 35% of the revenues, as measured by number of accounts according to
Customer opinion surveys clearly show that the most powerful first step community banks can take to increase small business customer satisfaction and retention is to focus on developing strong, personal relationships with local small business owners. It all begins with saying hello and getting to know their needs.
A November 2012 J.D. Power and Associates
The J.D. Power
A separate
Several easy-to-implement procedures can have a rapid and measurable payback for community banks. First, financial institutions need to find out who the potential small business customers are and develop plans to get to know them. Most importantly, bank associates need to greet customers by name when they visit the branch. Financial institutions should also implement training and monitoring programs that will increase consistency across all branches and make sure that relationship-building techniques are practiced successfully branch to branch.
Banks must also identify the most valuable small business customers and assign motivated account managers to the top accounts. The stakes are highest with these relationships and community banks cannot afford to lose their high-performing accounts to competitors.
Just as small businesses are the growth engines for cities and towns across the country, they can also contribute to the growth and stability of local banks. Banks that, in addition to providing loans and banking services, also develop strong, personalized relationships with small business owners will generate mutual sustained value. The banks that do so will have their small business customers at hello and beyond.
George Noga is the senior vice president of revenue enhancement for Fiserv.