Banks Seek to Leverage Surveys to Build Small Businesses Engagement

In recent weeks, a range of leading national and regional banks have carried out small business surveys, many of which were timed to coincide with 2017 National Small Business Week (April 30-May 6). These include new surveys from Citizens Bank (Small Business Pulse) and Fifth Third Bank.

These surveys are designed to:

  • Generate brand awareness among small business owners
  • Underline the bank’s commitment to this market
  • Position the bank as a thought leader in the small business space
  • Promote the bank’s small business solutions

The following are six approaches that banks are using to leverage small business surveys to drive engagement with their small business clients and prospects:

  1. Establish a branded index.  Many banks measure small business optimism via an index. This enables them to both track this metric over time, as well as generate general business press attention. Citizens recently-published survey includes the Citizens Business Pulse Index, which is its measure of the small business climate. Other indexes include the Wells Fargo/Gallup Small Business Index and the Capital One Small Business Growth Index.
  2. Create a recurring survey. Many of the leading banks now conduct surveys on a quarterly, biannual or annual basis, which enables them to track small business metrics over time. Capital One has been tracking a Small Business Confidence Score consistently since 2008.
  3. Survey topics of interest. Most surveys focus on small business optimism and outlook. However, surveys also look to differentiate by covering other issues that should be of interest to small businesses. The U.S. Bank Small Business Annual Survey studies small business owners’ personal satisfaction as well as the desired attributes they want from their business bank.
  4. Use infographics to summarize survey findings. Presenting key findings from the survey (which will typically include a series of statistics) in a visually-appealing format allows readers to quick grasp important points the bank wants to make. Wells Fargo published a lengthy survey report, but it also created a one-page infographic that summarizes key takeaways.
  5. Version the survey for target marketsBank of America creates versions of its Business Advantage Small Business Owner Report for 10 target markets (Atlanta; Boston; Chicago; Dallas/Fort Worth; Houston; Los Angeles; New York; Miami; San Francisco; and Washington, D.C.). Similarly, PNC publishes its Spring Economic Outlook Survey findings for 10 regional markets.
  6. Position the bank (subtly) as a small business solutions providerFifth Third’s recent small business survey included findings on funding growth, while also positioning the bank as “committed to the development of small businesses throughout the Bank’s footprint.

Six Tips for Banks to Develop a Small Business Content Program

In a recent EMI blog post, we discussed ways that banks could re-engage with the small business market.  One of these ways was to develop content of interest to small businesses.  The development and distribution of targeted content can enable banks to re-establish credibility, act as a proof point of banks’ commitment to small businesses, and reposition banks as a key source of advice for small business owners.

The following are six tips for developing a content program aimed at small businesses:

  1. Conduct due diligence.  Survey small businesses and company stakeholders to develop insights into what content topics small business owners are interested in, how they consume content, and how they perceive banks as content providers.  In addition, banks should study competitors’ content development to identify best practices as well as approaches to avoid.  And banks should also assess content topics and styles deployed by dedicated business media, such as Inc. and Entrepreneur.
  2. Develop a content portal.  Large banks—such as Bank of America (Small Business Community), Capital One (Spark Business IQ), JPMorgan Chase (Chase for Business Resource Center), U.S. Bank (Connect), and Wells Fargo (Wells Fargo Works for Small Business)—have all developed small business portals.  These portals publish a regular stream of small business-related content, which aim to drive small business awareness, interest and engagement.  Establishing content templates and guidelines—covering content length, styles, colors, fonts, logo treatment, images and graphics, and approval processes—facilitate timely content development and publication.
  3. Focus on topics of interest to small businesses.  Content developed for small business owners tends to be focused on key business life stages (e.g., starting a business, growing, selling), and related business challenges and financial needs.  Such content positions the bank as a trusted advisor for small businesses at different stages of evolution, and can act as a catalyst for small business engagement.
  4. Utilize a range of content types.  Banks have a range of different content types at their disposal, each of which offers specific advantages in terms of developing and presenting content.  These include articles and blog posts, case studies and success stories, podcasts and webcasts, videos and infographics.  Wells Fargo has a dedicated “Wells Fargo Stories” section on its website, which include thumbnail summaries, which link to additional detail, including video.   Content should be presented in easy-to-consume formats for small business owners who are bombarded with information on a daily basis.
  5. Promote content across multiple channels.  Banks should aim to present this content across a number of channels, including social media (in particular LinkedIn and Twitter), the company website, small business media, and small business-oriented events.  In addition, this content should be adapted for use by the bank’s small business bankers in branches or on the road.  Some banks that maintain small business content and advice portals extend this branding into social media.  A standout example here is the @WellsFargoWorks Twitter handle, which mirrors the bank’s Wells Fargo Works for Small Business portal.
  6. Carry out small business surveys.  Many of the large banks now conduct and publish regular (annual, quarterly or even monthly) surveys that track business sentiment and key challenges.  These surveys help demonstrate the banks’ commitment to the small business market.  And findings from the surveys provide fodder for content development that can be used across a range of channels.  Many of these have been in place for more than a decade (PNC has published a semi-annual PNC Economic Outlook since 2003), and some include a metric that is tracked over time (e.g., the Bank of the West Small Business Growth Index).  A number of banks create market-specific versions of these surveys (U.S. Bank publishes versions of its annual small business survey for 11 markets in its footprint), which help raise the bank’s profile in these markets.  Banks have also conducted one-off surveys of current hot topics (e.g., the TD Bank EMV Survey in November 2015) or focused on targeted segments (the August 2016 Bank of America Women Business Owner Survey).

Developing relevant and engaging content across multiple media enable banks to position themselves as aware of small business ambitions and needs, and committed to partnering with small business owners to develop pathways to business success.

Five Ways to Reinvent Bank Branches

Recent banking industry news continues to highlight growth in self-service channel usage, and an ongoing shift away from branch channels.

  • The latest data from the FDIC shows that there were 96,684 domestic branches at the end of March 2014, a net decline of 672 branches from the end of March 2013.  While the y/y decline is less than 1%, the number of branches has been steadily declining in recent years.
  • In a recent presentation, Regions reported that branch transactions fell 8% in 2013, while mobile banking interactions rose 59%.
  • A report by Bernstein Research found that Fifth Third could close nearly 600 branches, based on their deposit levels and proximity to other branches.
  • Bank of America has continued selling off portions of its branch network, with recent sales of 13 Tennessee branches to First Horizon, as well as 13 branches in Michigan to Huntington Bank.

These trends point to a need for a significant reinvention of the branch channel if it is to remain relevant for consumers, and strategically important for banks.  Here are five areas that banks can focus on in order to achieve this:

  1. Avoid both inertia and “following the crowd.”  There is a danger that banks avoid making necessary changes to their branch networks because of internal resistance and a cultural predilection to carry on as before.  Equally, banks may be inclined to close a significant portion of their branches because they perceive that it the prevailing industry trend.  Both of these tendencies should be avoided.  Decisions on branch numbers, density, design, staffing and support should be based on strategic analysis of market trends, competitive threats and overall company objectives.
  2. Don’t make branch decisions based solely on cost.  Branches represent a significant cost for banks, and with declining branch usage as consumers gravitate to other channels for everyday banking transactions, the tendency will be to cut branches.  However, this is a narrow view that does not take into account the sales, service and branding roles that branches play.  Although Regions reported an 8% decline in branch transactions in 2013, it also claimed that 80% of sales came through the branch.  And while Bernstein Research claimed that Fifth Third could close 47% of its branches, a Fifth Third spokesperson said that the branch remains the most visible brand identifier in their communities.
  3. Test different branch formats.  Some of the leading U.S. banks have been piloting different branch formats in their markets.  In February 2014, Capital One opened a new Capital One 360 Cafe in Boston (these cafes raise awareness of Capital One’s online bank unit).  In May, PNC opened a pop-up branch in Chicago, and SunTrust opened an innovation branch in Atlanta.  And banks like Bank of America and Citibank have opened flagship (or “destination”) branches.  Banks are looking at these new branch formats not only to assess how they resonate with different customer segments, but also to determine optimal staffing levels and the impact of these branches on overall branch density within markets.
  4. Overhaul branch staffing.  Changes in average branch size and format, as well as in the role of the branch, have important implications for branch staffing.  Smaller branches require fewer staff, and staff activities will shift from handling everyday transactions to selling and providing specialized service and advice.  This has important implications for recruiting, training, compensation, support and internal communications, and banks need an integrated branch personnel strategy with input from multiple functions within the bank, including HR, sales, service, marketing and product.
  5. Leverage branches to build beachheads in new markets. Traditionally, branches have marked a bank’s footprint within defined geographies.  Now, some banks are moving beyond these geographic constraints to open branches in out-of-footprint markets to focus on specific segments (such as commercial, private banking and wealth management clients).  BBVA Compass has been opening loan-production offices along the East Coast.  BMO Harris opened a corporate banking office in Atlanta, well away from its traditional Midwest footprint.  As these branches do not target the mass market, product expertise and service quality are more important factors that having strong branch density in a market.