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Relationships Still Matter in Business Banking

Posted October 20, 2020 by Bobby Martin

Barlow Research Associates is probably the most well-known, and certainly the most accomplished, banking research company, especially with regard to gathering insights on how businesses view their banks.

I was reading a recent Barlow article about the reasons why small business banking customers stay with their existing bank — and the reasons why they opt to leave. In this article, there was one statistic in particular that jumped out at me. Barlow found that, "72 percent of small businesses stated ‘personal connection with their Account Officer’ is one of the main reasons they stay with their primary bank. As one customer said: ‘The personal relationship. Knowing that there is a face and a person who cares about your business.’”

The more I thought about that Barlow statistic, the less surprising it was to me that the figure was so high.

With the advent of technology, it may seem like small business customers would place a higher importance on so-called “fintech” capabilities and having seamless online interactions with their bank. But as we saw proven out during this year’s Paycheck Protection Program (PPP) process, businesses are still doing business with banks personally.

Small businesses relied heavily on their account officer to help guide them through the PPP process and complete their paperwork. Indeed, banks haven’t created a robotic method to deal with these types of ongoing and uniquely complex financial needs.

The value of good advice

When the Barlow article points out that business banking customers value the “personal relationship” with their account officer, it got me thinking: What do small business banking customers actually mean when they talk about a “relationship” with their banker?

In my opinion, in a business-to-business environment, a relationship is not only about someone you can call to get an answer on a bank question or learn about a financial product. It also must encompass some element of value-added advice.

For a small business owner, a relationship with their banker based on value-added advice can mean a lot of different things. But most business owners want a banker who can help their business succeed —  not just someone to know them personally. 

A partner for value-added advice

When it comes to relationships with small business banking clients, the proof is in the pudding. It’s no surprise that Barlow found that 72 percent of business banking customers are looking for a relationship that includes value-added advice from their account manager. And Vertical IQ can make it simple to learn about — and share — these key industry insights with your small business customer.

  • To act as a de facto CFO for your small business customers look at the Industry Trends, Industry Forecast and Credit Underwriting and Risks chapters of the Vertical IQ Industry Profile to learn about financial challenges and opportunities within the customer’s niche.
  • To understand your customer’s business well enough to recommend solutions to their capital needs… study the working capital and capital financing chapters of the Industry Profile for your customer’s business.
  • To interpret financial statistics and offer salient advice… examine the Financial Benchmarks chapter of the Industry Profile and show how your customer compares to others in their industry.
  • To come up with good ideas on how to improve your customer’s business operationally… offer guidance on how other firms in the customer’s industry are operating by reviewing the How Firms Operate chapter of the Industry Profile.
  • To act as a good listener so the customer can extrapolate their own solutions by talking through options… review the Quarterly Insight to have a good understanding of the latest goings on within the industry, and use the Call Prep Questions to keep the conversation going.
  • To notice trends and challenges with similar companies and offer new ways of doing things read the Industry Trends and Credit Underwriting and Risks chapters so you will be on top of the latest industry developments.

Note: These Industry Profile chapters can be printed out and shared with your customer as an additional value-add.

A personalized relationship

Vertical IQ helps you offer small business customers the industry insights that they may not have the time or resources to acquire on their own. When 72 percent of small business owners say they want a personal connection with their Account Officer, this is exactly the type of partnership they are often looking for. 

By integrating Vertical IQ into your relationship management processes, you can provide both the value-added advice that small business customers need and the consultative, personal relationship they want.

>> Start sharing valuable industry information with your small business customers and prospects. Visit https://verticaliq.com/ to get started for free today!

 

Tags: banker, economy, small business owner, small business, business banking, advisor, prospects, industry intelligence, COVID-19

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