7 Communications Tips for Banks in Developing an Effective COVID-19 Response for Small Business Clients

Now that Congress and the Administration have agreed on a $310 billion deal to replenish the Paycheck Protection Program (PPP), banks are scrambling to help small businesses apply for this additional funding. At the same time, banks are providing information to small business clients on direct reliefs and channel availability, as well as tips to deal with the COVID-19 pandemic.

The enormity of the challenge facing small businesses and the economy as a whole defies description. No communication can overcome this burden. But silence is not an option and messaging matters. It’s critical to communicate effectively with small business clients during this pandemic.

Develop a multi-faceted response. The PPP is vital for many small business owners, but many banks have only been providing information on how to apply for PPP. This means they are missing other opportunities to engage with and help small business owners, many of whom are struggling with day-to-day operational issues. Consider offering additional information on supports available to small businesses, and advice on how to navigate through the pandemic.

  • Best practice: PNC has developed a range of content to help small businesses deal with the crisis, including “Four Ways Small Businesses Can Navigate During Times of Uncertainty” and “What to Do When Cash Flow Slows.”

Create a connection. Messaging on coronavirus response must be both clear and empathetic. This is particularly important in headlines and topline statements on how the bank is supporting its small business clients.

  • Best practices: Citizens Bank and KeyBank both use the theme of “We’re in this together” for their coronavirus information.

Communicate information clearly. To ensure that small business clients are directed to key information and not overwhelmed by detail, focus on strong copywriting and editing, as well as using layout and navigation tools to help readers quickly find what they need.

  • Best practice: Santander Bank uses red type, spacing, headings, and bullet points to effectively organize its COVID-19 response information.
  • Best practice: TD Bank uses tabs on its website to direct small businesses to information on its own customer assistance program, SBA PPP Loans, and other relief options.

Provide guides and tools. Many banks have developed tools (such as online forms, FAQs, guides and checklists) to aid small businesses in understanding support and options available to them,and to apply for funding

  • Best practice: Huntington Bank has published a series of FAQs to address various aspects of the PPP program, including general questions, eligibility and application information.
  • Best practice: Umpqua Bank integrated a well-designed application form into its CARES Act Paycheck Protection Program information page.

Consolidate all information into a single resource center. Develop standalone portals or resource centers to retain all coronavirus-related information in a single location. This enables you to maintain a consistent tone in coronavirus messaging, avoid any client confusion, and better manage the process of providing updates.

  • Best practice: Citizens Bank operates a dedicated COVID-19 Resource Center, with links to services and resources, details on financial hardship relief assistance and a message from the bank’s CEO.

Embrace multiple communications channels. Use the numerous channels – branch, phone, website, social media – at your disposal to provide updates and directly engage with small business clients.

  • Best practice: PNC directs clients to dedicated toll-free numbers for different product categories; some numbers are operational 24×7.

Update information regularly. Many banks provided initial information on their COVID-19 response, but they have not provided regular and comprehensive updates, a critical failing in this extremely dynamic environment.

  • Best practice: Bank of the West publishes regular updates in videos featuring the bank’s CMO Ben Stuart.

7 Small Business Marketing Tips for Banks

There are more than 31 million small businesses (6.0 million employer and 25.7 million nonemployer firms) in the U.S. and the vast majority of banks provide a range of banking services to this segment.  However, many banks do not have a dedicated small business marketing programs.  This is in part due to the small business segment often falling between two key segments: consumer and commercial. 

For banks to effectively grow their small business banking franchise, they need to identify the unique characteristics and financial needs of this segment, and then build an integrated series of marketing initiatives to drive small business awareness, interest and engagement.

The following are 7 areas where banks should focus attention in developing small business marketing initiatives:

  • Incorporate small business into bank advertising campaigns. It’s expensive to develop dedicated small business advertising campaigns; only small business finance specialists (such as Kabbage) or the very largest banks do so. However, banks can highlight their commitment to the small business market by featuring small business owners and services in bank-wide brand campaigns.
  • Build marketing initiatives and offers around National Small Business Week. National Small Business Week is organized by the U.S. Small Business Administration (SBA) and takes place each year in May. Many banks now celebrate the week with special offers, events and other initiatives targeted toward small business needs.
  • Participate in/host dedicated small business events. Many banks speak at, exhibit at or sponsor small business events in their footprints, which helps to position them as a provider of advice and services to small businesses, while also allowing banks to engage directly with small business owners. Banks that have invested significantly in small business events include Chase (which hosts regular Chase for Business Conferences in various cities, most recently in Pasadena and Columbus) and Wells Fargo (which participates in Small Business Expos throughout the country).
  • Leverage the branch network. A Mercator survey found that 79% of U.S. small businesses visit a bank or credit union branch at least once a week. Owners also want to create and maintain networks within their local markets. Banks can leverage business owner branch affinity and networking needs by hosting events in their branches. In addition, banks should deploy dedicated small business bankers in larger branches, as well as incorporate small business signage and collateral into all branches.
  • Carry out small business surveys. A wide range of banks now carry out regular surveys that both provide a gauge of small business health (optimism, key challenges, opportunities) and reveal small business attitudes toward hot topics (e.g., tax reform, regulations, technology usage). Banks are increasingly publishing findings in more creative formats, such as infographics. It is also worth noting that banks conduct these recurring surveys at different intervals:
  • Create dedicated small business portals. Most banks have built and branded online small business portals that act as a one-stop shop for small business information and advice.  To encourage repeat visits to these portals, banks need to provide a range of content (articles, case studies, podcasts, webinars, videos, infographics) organized around key small business needs or life stages (e.g., starting a business, selling a business), and designed to create an excellent user experience.  Prominent small business banking portals include:
  • Develop a dedicated small business social media presence. Banks can emphasize their commitment to the small business market, as well as promote various small business events, offers and other initiatives, by creating a dedicated small business presence on social media, particularly on Twitter. Banks with dedicated small business Twitter handles include:
    • Chase for Business (@ChaseforBiz, 191,851 followers)
    • Wells Fargo (@WellsFargoWorks, 57,715 followers)
    • Capital One Spark Business (@CapitalOneSpark, 42,318 followers)

With the wide range of marketing options at their disposal, it is vital that banks do not use a scattergun approach to their small business marketing initiatives. Instead, banks should look to create an integrated small business marketing plan that includes goals and objectives, reflects overall bank positioning, has consistent messaging and creative execution, and works in tandem with the bank’s small business sales and service channels.

Marketing Suggestions for Banks Looking to (re)Engage with Small Businesses

According to the FDIC, small business lending rose 5.3% between end-2Q15 and end-2Q16.  Since falling to a post-Financial Crisis low of $279 billion in the third quarter of 2012, small business loans have risen 18%—to $328 billion—at the end of June 2016.

change_in_small-biz_loans_1Q11-2Q16

In the light of this steady loan growth, many banks are refocusing attention on the small business market.  But how can banks—many of which virtually abandoned the small business credit market following the 2008 Financial Crisis—rebuild awareness, trust and engagement with small business owners?  The following are five marketing approaches for banks to consider in (re)building their small business banking franchise:

  1. Develop a small business brand.  In recent years, several leading banks generated significant small business awareness by developing a dedicated small business brand.  For some, these brands cover the bank’s entire small business operations.  Capital One created the Spark Business brand for its small business solutions, and has launched a number of Spark-branded products and services, the most recent of which is the Spark 401(k) service.  Another option is to develop a branded small business portal, and extend that branding into the bank’s small business social media presence.  Wells Fargo created the Wells Fargo Works for Small Business portal, and applied this brand to social media platforms, including a dedicated blog and @WellsFargo Works Twitter handle.
  2. Target small business segments.  Banks’ commercial banking units tend to target firms based on size and industry sector, as these are seen to have distinct financial needs.  In targeting small businesses, banks are better served by focusing on small business life stages, or by targeting underserved segments, such as women-owned businesses.  KeyBank has established Key4Women, a nationwide community of women in business.
  3. Create content of interest to small businesses.  Banks can build trust and engagement with small businesses by developing and distributing information, news, and advice relevant to small business owners.  This content should be focused on addressing common business challenges, and should ideally be brief and easy to scan (to reflect today’s content consumption patterns).  Two recent good examples of small business-focused content are five tips from First Republic on how to run a better business, and tips from Capital One on buying or leasing office space.  And banks should explore a range of content types, such as case studies, articles and blog posts, webinars, videos and succinct reports/white papers.
  4. Raise awareness through small business surveys.  Many leading banks are conducting small business surveys, which aim to both raise awareness and promote their understanding of small business concerns and needs.  Many of these surveys are carried out on a quarterly or annual basis, and feature recurring metrics (e.g., Wells Fargo/Gallup Small Business Index and Capital One’s Small Business Confidence Score).  Banks also seek to tackle other small business-related topics either in these recurring surveys or in standalone surveys (examples of the latter include TD Bank’s Small Business EMV Survey and Bank of America’s Women Business Owners Spotlight).
  5. Develop a local presence.  There are a number of ways for banks to establish a local presence:
    1. Partner with key influencers (such as chambers of commerce)
    2. Market branch presence. Small businesses tend to have heavier branch usage than consumers, and banks can leverage this branch affinity by promoting small business solutions (including technology tools) in branches, deploying branch-based small business specialists, and hosting small business events.
    3. Promote small business-focused community groups or programs.   In August 2016, Webster Bank announced a partnership with the University of Connecticut and Connecticut Innovations to establish a $1.5 million UConn Innovation Fund for new business startups.

Before developing and implementing these small business initiatives, banks should conduct research to understand how and how well they are perceived by small business owners, and to identify deficiencies in their product and service capabilities relative to competitors.  Banks should also gain insights from key internal stakeholders to assess its ability to address these issues using existing resources.  These analyses support investment decision making, and inform small business banking program development and implementation.