Courting Commercial Customers

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How marketing should support business banking

By Becki Drahota

A few weeks ago Rhonda, the research director with Mills Marketing, came into my office with an article in hand. “You’d better read this,” she said. “It’ll make you crazy.”

It did. It detailed how one of the largest banks in America had a brilliant idea to deploy online banking specialists out in the field. However, more than four years before that article was published we knew a small community bank in Iowa that was regularly sending its on-site tech specialist to the bank’s top-tier business customers to help them better leverage its online banking services.

Innovative relationship building like this has been happening at the community bank level for decades, and is an example of how banks must continue to think—and act—to protect the most critical market segment they serve: small business.

What follows are 10 high return-on-investment tactics to help you and your bank do just that.

Tactic #1: Reallocate resources. Imagine two pie charts. The first, illustrating where revenues come from; the second, where marketing resources are allocated. They’d probably look a lot like the charts below.

According to the FDIC, community banks account for 14 percent of all banking assets in the United States and 46 percent of all small business and farm loans in the United States, but community bank marketing still predominantly focuses on retail sales.

In the future, bank marketing resources must more closely align with keeping and growing their commercial/small-business revenue, which is key to the future success of community banks.

Tactic #2: Use quarterbacks. Every commercial customer should have a relationships manager, determined by the scope and value of services each customer uses. A business customer that uses more services should be attended by a bank employee with more knowledge and greater relationship-management skills, as demonstrated in the table below.

Too often, deposit–only business customers become relationship orphans and opportunities for lucrative cash management and wealth management fee income go untapped.
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Tactic #3: Identify first-string clients. Create a profile of five to eight quantifiable commercial customer attributes (e.g., relationship-growth potential, referral value, profitability of current relationship) and rank each client accordingly. Allocate your bank’s retention and upsell resources based on the customers with the highest value and potential.

Tactic #4: Focus. Target industries that your community bank has the opportunity and capability to serve. Create specific value propositions and product specialization for these industries to lift your bank above the competition. Want to serve veterinarians? Chiropractors? Dentists? Go to a conference for their business managers. Buy research that details their most pressing operational needs and potential challenges. If your bank gets good enough at serving a specific niche, you can expand its services beyond the current footprint in this specific area because your bank is so good at what it does.

Your best customer is someone else’s top prospect. Act accordingly.

Tactic #5: Target business owners’ personal accounts. Mills Marketing’s research tells us that 40 percent of business owners do not have their personal accounts where they conduct the bulk of their business banking. Business owners are almost always profitable retail customers, so go after them. However, avoid trying to foist your bank’s current checking account menu on these folks. Offer them enticing, substantial retail benefits and rewards.

Tactic #6: Provide on-site service. Read the first paragraph of this article again. Then go reassign people-friendly IT specialists, put them in your bank’s vehicles and let them go build deeper relationships with your bank’s most valuable customers, one office manager at a time.

If you’re concerned about cost, think of what your bank is spending to support travel and social opportunities for its certificate of deposit-driven seniors club. The return on investment for on-site, practical support for your bank’s primary revenue drivers will be obvious.

Tactic #7: Look like a leader. Your community bank’s prospects won’t put your bank in their decision set if your bank doesn’t present itself as a serious contender for their business. This is not the time to create brochures with laundry lists of ubiquitous services and platitudes describing them. Provide a financial profile of your bank, identify the competitive advantages it offers and offer meaningful information about your bank’s team and expertise. Organize your bank’s business product information based on annual sales and industry profiles, so companies can go directly to products with a high propensity to be used.

Tactic #8: Say goodbye to your media bias. According to Raddon Financial Group’s 2012 Small Business National Research, here are the preferred methods companies use to learn about offers from another financial institution:

  • email—44 percent
  • direct mail—40 percent
  • your bank’s website—29 percent
  • personal contact—27 percent
  • newspaper—6 percent

The bottom line is that today it’s all about digital and direct mail, no matter what that senior lender who hates email says.

Tactic #9: Act like a leader. Recently we helped develop course content for a bank to teach soon-to-be chiropractors how to make smart start-up decisions when they open a new practice.

Think how important it is to get to know these young professionals early in their career and be seen by them as the expert who taught them the Five Cs of Credit, key financial ratios, funding options and more.

Tactic #10: Keep your eyes open. I live in a small town. There’s no Wells Fargo in sight, but my mailbox doesn’t know that. Every three to four months Wells Fargo sends me a pre-qualified line of credit offer, and since I’ve been in business 38 years, the offers have gotten pretty substantial. But the simple truth is, I get more information from Wells Fargo than I do from my local business banking relationships. Inertia may be enough to keep me from jumping ship, but it might not. Your best customer is someone else’s top prospect. Act accordingly.

There you have it. While I don’t advocate abandoning marketing support for retail banking services, I strongly suggest that community banks build a moat around their most prized competitive differentiator and key to future success: small-business banking.


Becki Drahota (beckid@millsmarketing.com) is president of Mills Marketing, a nationwide full-service financial marketing firm based in Storm Lake, Iowa.

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