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.

Related articles in Bank Marketing:
Use refi promotions to strengthen relationships and cross-sell. . . before your competition does.