Financial Outlook of Small Business Banking Customers

Data from the 2014 J.D. Power Small Business Banking Satisfaction Study finds that small businesses are feeling more positive about the financial outlook of their business and the American economy. However, there are significant differences when analyzing results by business size. As displayed in the chart below, small businesses with sales volume of $100k-$249k are less confident about their business outlook and the outlook for the American economy.

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Study data also finds that businesses with sales volume of $100k-$249k are significantly less satisfied with the service they receive from their business banking institution. More specifically, these customers are less satisfied across multiple aspects of the business banking experience including Product Offerings, Fees, Credit Services and Problem Resolution.

Banks may have a tendency to overlook business clients of this size and focus on those with larger sales volumes. However, it is important to consider how the current level of dissatisfaction amongst small businesses with sales volume of $100k-$249k may impact bottom-line performance.

For starters, business banking customers that are dissatisfied with their current institution are more likely to attrit and initiate a relationship with a new business banking institution. Additionally, approximately 3/4ths of business customers with sales volume of $10ok-$249k also have personal banking accounts at their business banking institution. Therefore, by failing to satisfy the needs of business banking customers, banks are not only risking the loss of small business relationships, but also the personal relationships that small business customers may also have with the institution.

 

 

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