In Part One of this series, we explored the lucrative small business opportunity facing credit unions -- of the more than 24 million businesses in the U.S., 98% of them have annual revenues of less than $10M. 1
Before jumping into the small business market, a credit union needs to assess how prepared it is to do so. Does the institution offer products and services that can deliver value? Can it help the business member better manage money, minimize risk, or save time and money? Business members expect robust, easy-to-use technology (close to 60% of small businesses now banking online), 2so having the right online and offline offerings, and synergy between these channels, is paramount.
Once you are confident that your credit union can provide what small businesses demand, you're ready to acquire business members.
Mine Current Account Holders
Small business members may already be doing some of their business banking with you. The goal is to transition that “some” into “all.”
• Analyze account usage profiles. Segment prospects either by number of employees, type of business or geographic location. Parse out membership by number of accounts, number of transactions and types of transactions. Find out what checks have been written, who were the deposit account holders, and their history of funds transfers and wire transfers. This review of activity history will help you understand their behavior and how to market to them and their peers more effectively.<
• Look beyond size. A business may only have $500K in annual revenue but may be transferring millions of dollars in wires every week and employing some fairly sophisticated banking tools and services. Some behavioral indicators of a small business in need of cash management services include:
- Frequent deposit activity or consistently large deposits
- Repeated cash or credit requests
- Existence of multiple accounts
- Repetitive use of bank services like direct deposit, overdraft protection, ACH and wires
- Significant loan activity
Once you've mined your existing membership, implement a systematic approach to track potential business members going forward.
Identify Local Prospects Outside Your Membership
- Check business license listings . Most counties provide access to this data, helping you identify to whom and where to target your outreach.
- Take advantage of the Chamber of Commerce . If you are not a member, become one. Appoint a representative from your credit union to attend meetings and get involved in local business-to-business events.
- Network on your home turf . Schedule friendly “meet and greet” sessions at your branch to learn about the needs of businesses and to let them know how your credit union can meet their demands. Consumers rank credit unions as a clear leader in customer advocacy when compared to other financial service institutions 2 ¯ making a credit union the ideal fit for a business owner who wants that personal touch.
Market and Sell
Once you've determined the needs of prospects and are ready to sell and cross-sell deeper into each segment, it's time to assess and implement your marketing tactically.
Traditional tactics that work for retail promotions are equally effective for business marketing:
• Try buttons on tellers' shirts promoting your tax services, easy-to-use payroll services or other business-oriented products.
• Use a window painting campaign. This attention-getting tactic might include online banking promotion, citing how banking online helps businesses consolidate, gain greater control, increase productivity, and augment growth.
• Create colorful and clearly worded kiosks. This forum might be used to promote basic, intermediate, and advanced service offerings with a reference to how the online channel has options for each.
• Consider radio. A radio advertising message positioned in “drive time” ( 6-10am and 2-6pm, when radio stations traditionally have their highest listenership) is a traditionally sound way to reach business prospects.
Online marketing messages should also be a part of the tactical marketing mix. Your online technology provider should be able to help you market business products and services online.
In the upcoming Part Three of this Ramp Up for Small Business Success series, we'll discuss how to manage the life-cycle of small businesses, including how to increase share of wallet, find out what products and services you might still need to add via focus groups and other feedback, and how to expand your footprint in the profitable small business marketplace.
1. The Small Business Market Survey, Aite Group, June 2006
2. Small Business Survey; Edgar, Dunn & Company and Collective Dynamics, LLCN=203 U.S. Online Small Businesses, January 2005