The Plight of Small Business Banking

Everyone probably remembers that one kid in school who just never fit in or was not accepted by the other kids in the class.  Maybe he was too smart…or shy…or short…or tall.  But whatever the reason, he just didn’t fit in.  Gym class was the worst, of course. When it came time to choose up teams, the kids would fight over who would have to take him onto their team.  For the last kid chosen, the gym teacher would often have to assign him to one team or the other while the other kids groaned or complained how unfair it was.  Childhood is a painful time and not knowing how or where you fit in can be a troubling feeling that creates stress, sadness, confusion and frustration.

That situation is typical of what Small Business owners go through with their banks.  It often starts off well enough, with the Customer Service Rep making the customer feel like the bank values his business.  He gets introduced to the staff and even has a wonderful bank calendar for the office!  Life seems great, at least until something goes wrong, or questions arise….maybe the first statement arrives with a few surprise fees.  He calls the 800 number on the statement but gets transferred around because it’s ‘a business account’ and the agent cannot access those accounts. After several frustrated calls, the customer soon discovers that Small Businesses often get lost in the banking ‘abyss’.

What’s going on?  Many banks lack a strategy on how to handle the Small Business owner. He may be assigned to the Mid-Market or Commercial Division, in which case his $2M annual sales is a rounding error compared to average accounts in Corporate.  Or he is assigned to the branch, but his needs are more complex than the average consumer and the branch staff lacks the focus, time or capacity to take the time to understand his needs.  In other words, no one wants to choose the Small Business owner for their team and the gym teacher ends up assigning him to a team by default.

As this chart shows from J.D. Power’s 2011 Small Business Banking Study, only 2 out of 3 High Tier customers with revenues over $2.5M are assigned an account representative. This leaves the other customers hunting around for someone who cares enough to answer questions, address needs and resolve problems.

Banks have to decide what their strategy will be to meet the needs of Small Businesses and then execute against it. Train and assign frontline staff on how to identify and meet the needs of Small Business owners. While businesses with greater annual sales typically need a branch manager or business banker, smaller firms just need a face and name of someone who tries to align products and services to their needs. But mainly, the Small Business owner just wants to know that they are part of someone’s team and that they were chosen and not assigned by default. Don’t let your Small Business customer be that kid in school who is left frustrated and confused!

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Data source:  J.D. Power and Associates 2011 Small Business Banking Satisfaction Study


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