Bank C&I lending advances, small business lending lags

The NFIB recently published first-quarter 2012 data on U.S. commercial banks, which shows strong growth in commercial and industrial (C&I) lending, but continued decline in small business loan portfolios.

Overall, C&I loan portfolios at the end of 1Q 2012 were up 15% year-over-year (y/y).  The growth was driven by the larger banks; banks with more than $1 billion in assets grew C&I loan portfolios rose 20%, while banks with less than $1 billion in assets increased C&I loans by just 2%.  Most of the leading U.S. banks reported C&I loan growth rates of 20%+.  American Express grew C&I loans 13%, indicating that its spend-centric approach is beginning to stimulate growth in business card outstandings.  C&I growth was 2% between 4Q11 and 1Q12.

Small business loan portfolios (defined as C&I loans of less than $1 million) continued to decline, falling 1.6% y/y.  However, banks with more than $10 billion in assets grew small business loans by 4.6%, indicating that these banks have increased their share of small business loans.  However, the smaller community banks (with less than $100 million in assets) were the only bank-asset category to grow small business loans between end-4Q11 and end-1Q12.

Our analysis also looked at loan intensity–C&I and small business loans’ share of overall bank loan portfolios.  As expected, the larger banks have a higher C&I loan intensity, with this ratio declining steadily for smaller bank-asset categories.

For small business loan intensity, we see the opposite trend.  Smaller banks tend to have highest ratio of small business loans to total net loans, underscoring the importance of small business relationships to community banks.

Say “No” to the Third Helping of Meatballs: The Strategy and Pursuit of Trigger Campaigns

Launching a trigger email is a little like going back for seconds and thirds at an all-you-can eat buffet: just because you can doesn’t mean you should. The temptation to launch a trigger campaign becomes stronger in light of the steady drum beat of email marketing experts who tell you it’s the right thing to do. However, what all this talk of email marketing “best practices” loses sight of is that, like any marketing tactic, trigger campaigns should be a logical response to a strategic problem.

The good news is that there are trigger campaign approaches that align with many common issues — you just need to figure out which campaign matches your strategic need. For example, let’s say you are a company that has made or will be making a commitment to content marketing as a driver of customer and prospect engagement. Your business model requires you to nurture contacts over a period of time until they are ready/have the need to buy. During this interval, you need to keep your company and products top-of-mind, but your response data suggests that you are not maximizing your potential to engage your audience.

In this scenario, the best application of a trigger campaign is to use your target audience’s responses to drive deeper engagement. Leveraging your available content, you can create a collection of emails triggered by a range of positive responses — clicking on an email, downloading a white paper from your website, visiting your booth at a conference — that offer the recipient “next steps” or additional information. The keys to making this kind of trigger successful are:

  • Clean data: Make sure that the email address to which you are sending the triggered email is the email address of the person who took the positive action.
  • Low friction: Make the featured content easy to consume to lower barriers to incremental engagement.
  • Timeliness: Deploy the triggered email within a day or two of the positive action to ensure that whatever spurred the initial engagement is still fresh in the target’s mind.

In our experience, triggered campaigns targeting those with a positive recent response have delivered view rates in the 60-70% range and engagement rates as high as 20%.

Visa U.S. credit card volume growing faster than debit card

Visa Inc. published its 4Q11 and full-year 2011 financials and related data yesterday, which included a good deal of information on payment volume trends.  One of the most notable trends was the relative growth rates of U.S. credit card and debit card volume over the past five quarters.  These two growth rates reached an inflection point in the most recent quarter, with the credit card year-on-year growth rate moving ahead of debit card.

It is notable that the patterns of acceleration of credit card volume growth and deceleration of debit card volume growth have been in place for some time.  Forces that have contributed to these trends include:

  • Banks’ imposition of debit card fees and elimination of debit rewards, largely due to new debit interchange structures
  • Consumers and small businesses changing their perceptions of the credit card, not just as a means to access credit, but also as efficient and convenient payment vehicle (credit card volume growth is much stronger than outstandings growth)
  • Issuers aggressively promoting credit card spending with large bonus offers