Author Archives: mronan

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.

10 Key Takeaways from the Latest Crop of Consumer Credit Cards

Leading U.S. credit card issuers continued to roll out new credit cards, as they look to attract new clients, cross-sell and upsell existing clients, and win a greater share of clients’ spending.  

The following are the common trends or standout elements that we identified among these new cards.  (Note that the table at the end of this blog provides a comparison of features/benefits of 10 cards that were introduced over the past 12 months.)

  1. Introductory offers are focused on generating balance transfer volume.  7 of the 10 cards have 0% introductory offers on either purchases and balance transfers or balance transfers only.  6 of these 7 introductory offers have a duration of at least 12 months.
  2. Go-to APRs continue to be prime-based and operate in a broad range.  The APR range of many of the new credit cards is at least 7 percentage points.  Two cards (American Express Cash Magnet®, and Wells Fargo Propel® American Express) have an APR range of 11 percentage points.
  3. Some cards offer a high earn rate on all purchases.  One approach to using rewards to attract and retain cardholders as well as drive more spending is to have an earn rate of more than 1% on all purchases.  The Citizens Bank Cash Back Plus® World Mastercard® stands out with an earn rate of 1.8% on all purchases with no limit and no annual fee.  The Barclaycard Arrival® Plus World Elite Mastercard® offers 2 miles per dollar on all spending, but carries an $89 annual fee (waived first year).
  4. Issuers continue to offer tiered earning structures.  To drive card preference and grow spending in categories where cards have traditionally had a low share, many new cards continue to use tiered rewards structures, with higher earning on categories like travel, gas, dining and groceries.  It is worth noting that these bonus earn rates do not come with monthly or annual spending caps.
  5. Acquisition-and-activation bonus offers persist.  Issuers continue to promote bonus points/miles/cash back for activating the card and meeting a minimum spend requirement within an initial period (typically three months).  Higher-end cards that carry an annual fee also tend to have higher bonus levels.  Wells Fargo Propel American Express Card is looking to differentiate itself from competitors with a dual bonus structure: acquisition-and-activation bonus of 30,000 points and an additional 20,000 points for reaching a spending threshold in the first 12 months.
  6. Cards are offering redemption bonuses.  Some issuers are looking at rewards redemption as an opportunity to engender loyalty and preference.  Cards are offering bonuses:
  7. Most cards have no annual fees, but the cards that do carry an annual fee provide more features, higher earn levels and larger bonuses.  Annual fees tend to be waived the first year, although Navy Federal Credit Union’s Visa Signature® Flagship Rewards card has a $49 annual fee and no waiver. 
  8. Most cards apply a fee on balance transfers, usually a rate of 3% with a minimum of $5 or $10.  Navy FCU’s Visa Signature Flagship Rewards has no BT fees.  For its SavorOne℠ Rewards Card, Capital One imposes a fee of 3% during the card’s 15 month introductory period.  After this introductory period, there is no fee on balance transfers.
  9. Like BTs, most cash advances come with a fee (of 3% or 5%, with minimums of $5 or $10).  Again, Navy FCU stands out with no fee on cash advances.
  10. No foreign transactions fees are quickly becoming the norm, even on non-travel-based cards.