Prove you’re small business friendly. Chart your lending record.

Community banks have had a reputation as being lender friendly to small business. And, that reputation continues as big banks hold on to their lending dollars. Perhaps it’s in your community bank’s interest to point out your lending record to prospects. . . especially if you have one to crow about. Don’t just talk about it. Demonstrate it. Chart it. Put a graphic to it. Post it to your website. Then use it as part of your presentation to small business. Show you are a friend to small business.


The New Rules Project, a program of The Institute for Local Self-Reliance, did some charting of their own. They examined large, mid and small sized banks and contrasted their share of assets to their share of small business lending. As expected, small banks. . . those under $1 billion in assets. . . carry the lion’s share of small business lending.


The New Rules Project went further and compared the amount of actual commercial loan dollars that went to small business. Again, community banks catered to smaller enterprises.

Do your own chart. Create a graphic depicting your share of lending to the small business community. Then, show how you compare with the big boys, as well as your community bank competitors. As they say, a picture is worth a thousand words.

FOOTNOTE:
Large banks rebrand themselves as “community” banks.

Now in an attempt to turn their stingy reputation around, big bankers Citibank and Wells Fargo have recrowned themselves as “community banks.” A Huffington Post article, Big Banks Want You Back, notes that a revamped portion of the Citibank website makes “conspicuous use of the words ‘local’ and ‘community’," And, the online publication reported that Wells Fargo with its 10,000+ locations and $1.2 trillion in assets described itself as "the nation's leading community bank" during Olympic Games ads.

In a biting response to the commercials, Camden Fine, head of the Independent Community Bankers of America, warned, "Wall Street mega-firms better be careful what they call themselves lest they be confused with actual community banks that regulators allow to fail."

It's no surprise that big banks are grabbing onto words like "local" and "community," says Tim Pannell, president of Financial Marketing Solutions, which develops branding and advertising for banks. "Big banks understand that those are the key words that are creating success for a lot of community banks," said Pannell.

Do customer relationships affect your bank’s mortgage and home equity sales?

This past week the Raddon Financial Group posted two interesting charts, especially in light of the mortgage mess that hit the U.S. this past year. Where would customers look for mortgage and home equity products? In their online Raddon Report, the financial consumer research and database company answers that question.

Positive vs. negative. . . there are two sides to this coin.
Looking at the numbers in a positive light, bank marketers would say customers look first to their existing financial institution for either mortgage and home equity products. Sounds good, especially in terms of relationship building. But. . .

View the numbers from the other side of the coin. Then you’d say that roughly 70 to 75% of the population is open to jumping ship and looking elsewhere for these services.

Where to go for a mortgage loan.

When consumers were asked what type of financial institution they’d consider for a future mortgage, 31% responded that they’d turn to their primary financial institution. This was followed by 27% who would look to a bank. And, 17% would go to a mortgage broker.

Where to go for a home equity loan.


When consumers were asked their choice of institution for a home equity product, 26% would march through the doors of their primary financial institution. Eighteen percent would search for a bank and 9% would head down the street to a credit union.

In either situation, banks seem to have the lead as a second choice over other alternatives.

What does this means for bank marketing strategies?
Well, this depends if you’re a “glass half full” or “glass half empty” person. It seems that bank marketing departments have an opportunity here to build on their customer relationships. As the charts show, there’s definitely a consumer tendency for people to be drawn to their own financial institution first. The Raddon results, therefore, demonstrate that bank relationships are important. But with the current image of banks lacking, there’s definitely some fence mending needed to boost those numbers.

HELOC features that are preferred by consumers.

In a related study, Raddon tallied 1,155 survey responses to determine what home equity credit line features consumers preferred. Over eight out of 10 (84%) indicated that it is important that a line of credit not have any early closing costs. Eighty-four percent also reported that it is important that a HELOC should not have upfront fees. In contrast, only one-fifth (27%) indicated that it is important that a lender offer credit card access to their product.

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Bank markets to small business with educational webinar.

Nevada State Bank made a smart move. They tapped business and sales guru Jeffrey Gitomer to conduct an online webinar for small business clients and prospects. In the approximately 1-hour webcast, the animated Gitomer flailed his arms as he presented point after point of solid sales strategy for the rough upcoming year. Gitomer, who has authored a number of sales-oriented books, is a draw for any marketing event, but that’s not what’s unique about Nevada State’s strategy. What’s unique is the bank’s awareness of stepping up to the plate and offering businesses a hand. . . or in this case, the knowledge to work their way out of recession.

This isn’t the first foray, or even the last, into online “education” for Nevada State Bank. They have been doing it for the past year. Their 30-45 minute webinars complete with additional 15-minute live Q&A opportunities have been monthly events for the Nevada-based bank. Past archived webinars include a Stephen Covey presentation, insights from publisher Darren Hardy of Success Magazine, an SBA lending event and economic forecasts.

Tom Sweet, Vice President of Marketing at Nevada State Bank, introduced the webinar concept to his bank’s marketing department. He previously used the same format at a Los Angeles bank. In a phone interview, Sweet said that they’d “originally started the webinars to build awareness for who we are and add credibility to some of the services that we offer and provide value-added to clients and prospects.

“The results have been huge,” he explained. “Different subjects draw different size audiences. They generate a lot of goodwill and a lot of good word-of-mouth feedback and interest. The smallest audience was approx. 500 to up to thousands.” The Gitomer presentation proved more popular. Sweet credits the webinars with increased business for the bank.

The marketing veep remarks that he hasn’t seen a consistent, on-going webinar program in other banks’marketing plans.

Promoting to small business.
Gitomer wrote about his preparation for the Feb. 24th webinar in his popular Sales Caffeine email newsletter saying he spent more time preparing for this event than his regular live seminars. Gitomer, who has his own large following, promoted the event on his blog, Facebook, Twitter, and LinkedIn pages. From there it went viral. Nevada State Bank’s marketing department added email, offline and online advertising including biz journal ads, bellybands on newspapers, direct mail and online banners to the promotion mix for their webinar series. A microsite on the bank’s website also promoted the free webinar along with event registration.

From a “budget stand point, it’s [the webinar series]not huge, noted Sweet of his marketing budget for his 57 bank offices. “ It’s an important component , but it’s not everything.” Nevada State Bank has used outside technology resources to pull off the events; although the more savvy the bank marketing staff has become, the more they are able to handle themselves.

Stepping up as a small business leader.
I’ve been a long-time proponent of bank marketing departments looking beyond traditional advertising to reach their audiences. It would be a huge facelift for more of the banking industry to step up and change the image of banking. . . from self-serving to customer-service. Small business is especially in need of a helping hand. Perhaps the conclusion of the Gitomer webinar says it best. He endorses the bank’s efforts at the end of his online presentation, stating that Nevada State Bank “gets it” and that they’re “the only bank in the country who understands the real state of the economy.” From Gitomer’s loyal fan-base, this definitely is a seal of approval.

What this means for Community Banking:
No matter what your bank’s marketing budget, you can recreate your own online version of this same educational strategy. Don’t be intimidated by the Gitomer and Covey names on this webinar’s roster. Tap into your community and business leaders as expert presenters and create 2 to 5 minute low-cost, no frills video and post it to your website, deliver it via email to customers and make it available to small business prospects. Be pro-active and set your community bank up as a small business promoter worthy of their loyalty.

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