Vertical IQ recently hosted a webinar on how advisors of small businesses can become experts on local economies. It featured our CEO and cofounder, Bobby Martin, as well as our partner, Jack Hubbard, chief experience officer at St. Meyer and Hubbard, Inc., a leading bank sales and coaching firm.
Why is it so important for bankers and other advisors to understand the nuances of their local economy as well as the economies of the places where their clients are doing business? In part, it is because many small to medium-sized businesses (SMBs) are currently in a situation where they are considering switching banks, making this a crucial time for bankers to add value to retain or grow their client relationships. And Vertical IQ’s Local Economies section can help.
Use local market data to focus business development
There’s no doubt it is a challenging time for both business owners and their bankers. Jack explains that bankers have been overwhelmed by the work created for them by the pandemic and the tumult of the PPP process. They have seemingly endless paperwork to do for this government loan program.
Bankers also are trying to determine who among their clients and prospects they should be reaching out to and how. They know they need to lead with empathy, but they also want to be certain they are spending their time and energy on companies within industries that are going to weather this storm. Reviewing the Local Economies section of Vertical IQ can help you target the right industries for your business development efforts.
Educate SMB owners about their local economy
How can knowledge of local economies help bankers overcome the hurdles of today’s volatile business environment? Well, as Bobby notes, most SMBs are local in nature, so having a banker with expertise on the dynamics at play in their local economy is a tremendous asset to a business owner, especially during turbulent times like these.
Let’s say a banking client asks you, “What are you hearing out there?” It’s a common query from SMB owners because they expect that their banker will be dialed into the undercurrents of their local area — and more important, how those economic trends might impact the client’s business. These types of insights will elevate your status as a value-added advisor to that SMB.
But, as Jack points out, most bankers just don’t have the time or resources needed to do all of the research on things like local housing prices, income and employment rates, and home price and rent forecasts. That’s where Vertical IQ’s Local Economies section comes into play, providing all of this data and more at your fingertips to keep you apprised of what is happening in your area so you can in turn share that knowledge with your client.
Share local economic reports with clients that are growing
Bobby points out that another common topic that clients will consult their banker about is their plan to expand to a new location. This is a big decision for any business owner — one with major financial ramifications and one that should be informed by good data.
A banker can add value to this conversation by sharing details about the economy of the target location, and perhaps even drawing useful comparisons (or contrasts) to the client’s current location. The Local Economies information on Vertical IQ offers these key insights on over 3,400 cities and counties across the U.S.
Another scenario that bankers may experience is when a client is offering you their financial projections. Maybe they are about to make a big capital investment, and they want to know how their financials align with their local economy.
In this situation, the bank will of course do projections to determine if they think the business will be able to pay their loan back, but the SMB owner also wants data to verify that those projections are accurate and it’s a good business decision for them. Local economic data on factors like income and employment can boost the business owner’s confidence about making that investment.
Using local economic data to choose a niche for yourself
Another key topic broached during the webinar was about a question bankers ask themselves: Which industries should I specialize in for my local market?
Most bankers do, of course, have to be generalists, but as Bobby points out, “The most successful bankers have two, three, or four niches where they’re really good at helping those particular industries.” But to choose these specialties wisely, you need to know which industries have potential in your particular city or county.
Jack adds that this is all about targeting and focusing. Bankers only have so much time in their day to actually make sales. Since there are some industries that will have longer recoveries than others right now, it makes sense for bankers to spend the bulk of their time focusing on industries that are going to rally quicker — or are even thriving amid the pandemic. Targeting these industries in a particular market by using good data is crucial.
Informing bank decisions with local economic data
Banks want to ensure they have a balanced, healthy loan portfolio, especially in today’s unstable market. Knowledge of their local economy and how it is being impacted by COVID-19 and other factors is key to making good lending decisions.
“Banks have to pay close attention to things like unemployment and home prices — anything that drives the value of the loans and whether or not those loans are going to be repaid,” explains Bobby.
Using other tech resources alongside Vertical IQ
Jack shared some great tips and tricks on using LinkedIn to engage with your bank clients too. He explains how to use the “engagement pod” functionality to communicate to a group of people with similar interests. This is a great way to share ideas and data about your local economy, as well as solicit insights from clients and prospects in your local area.
Jack also suggested joining LinkedIn groups that pertain to your local economy — county economic development associations, for example. These groups are a good way to keep your finger on the pulse of your local economy, but they also give you the opportunity to become a thought-leader on banking within those forums.
A few other resources and tools that Jack recommends:
- Smartbrief allows you to sign up for free daily newsletters with links to relevant news articles on topics of your choosing. These industry-focused articles are great to share with your clients within that industry.
- Feedly is another free news aggregator that allows you to target concepts such as marketing, sales, or leadership, among others. It sends you articles related to your topics, which, again, you can forward on to your clients.
- RelPro, a sales intelligence tool, also offers the ability to target individuals within an industry. You’ll get a notice if that person posts new content.
Bonus: Vertical IQ Local Economies site tour
If you’d like to see a brief site tour of the Local Economies section of Vertical IQ, you can jump to the 19:40 mark in the webinar. Bobby shows you some simple tips and tricks on using this section and how to effectively share the data with your clients and prospects or use it to select a target niche.