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Small businesses represent big income and membership increase potential for credit unions. Every year, small businesses spend an estimated $353 billion on financial products. 1 With more than 24 million businesses in the U.S., 98% of which have annual revenues less then $10M, 2 the war is on to capture the small business banking relationship. And many of these “minor league” businesses just might be tomorrow's big league all-star.
Traditional thoughts and practices dictated that the small business relationship had to begin with the loan. However, small businesses need a full range of sophisticated on-and offline financial products and services as they look for ways to better manage their business and cash with minimal resources. With the average number of cash management services used by businesses projected to double from 3.5 in 2005 to 7 cash management services in 2009, 3small businesses can be a lucrative business unit for you.
After all, credit unions are known for their focus on member service and the ability to build relationships - consumers rank credit unions as a clear leader in customer advocacy when compared to other financial service institutions 4- making a credit union the ideal fit for a business owner who wants that personal touch.
Before you hang your Businesses welcome here' sign, start by taking inventory of what your credit union does internally - and make a list of what products, services and processes you may need to add.
Prepare Your Team
From rank and file senior management to in-branch retail staff, every one needs to be engaged and aware of the quest for an enhanced base of small business members. Senior management is a great place to start prospecting, a grassroots resource for connecting with small businesses. Tap into friends, partners and associates of top brass to forge new - and trusting - business banking relationships.
From there, make sure your member service team is well-organized and well-informed, with full buy-in at all levels of the organization from the top down, including:
So there you have it: your road map to business member acquisition. In the next two articles of this series, we'll delve further into what you need to build a small business member business base as well as how to manage the life cycle of your small business clients to maximize share of wallet and improve retention.
In the meantime, don't forget business leaders often share common expectations: improved money management, ways to save time and reduce costs, convenience, minimized risk, and robust yet simple and easy to use technology. A constant reassessment of how your credit union meets these demands is critical in order to meet the needs of today's business members.
1 The Small Business Market Survey, Aite Group, June 2006 2 The Small Business Market Survey, Aite Group, June 2006 3 The Small Business Market Survey, Aite Group, June 2006 4 Customer Advocacy 2006: How Consumers Rate Their Banks, Brokerages and Insurers, Forrester Research, May 2006 5 Small Business Survey; Edgar, Dunn & Company and Collective Dynamics, LLCN=203 U.S. Online Small Businesses, January 2005.
September 18, 2006
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