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Improving the small business banking experience

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How much do small business owners (SBOs) trust different industries, including banks, credit unions and alternative lenders? What do small businesses want from the bank relationship? What are banks doing well, and what can they do better, to improve the customer experience – and as a result, acquisition, retention and cross-sell? What kinds of credit are SBOs using – or do they plan to use – from banks and alternative lenders? How are SBO attitudes towards, and planned usage of, alternative lenders evolving?

To answer these questions, we recently surveyed 500 U.S. SBOs. There are some great learnings on what SBOs value in a lender relationship, and what you can do to enhance it.

You’ll learn:
• The SBO business outlook
• SBO trust in 26 different industries, from alternative lenders to wireless service providers
• SBO awareness of and trust in 27 leading banks
• Bank industry, and top bank, Net Promoter Scores
• What SBOs want in a bank relationship
• Where banks are under- and over-performing against SBO preferences
• Current use and providers of credit products – including business credit cards, savings and checking accounts, loans, LOCs, factoring and MCAs
• Planned use and potential providers of credit products
• How SBO attitudes towards alternative lenders have changed
• SBO usage of and satisfaction with banking apps and events
• The impact of content marketing on bank brand perception, loyalty and upsell
• How to boost awareness and trust via content marketing

You’ll get valuable insights to put to work right away in your SBO customer experience and content marketing plans.

How much do small business owners (SBOs) trust different industries, including banks, credit unions and alternative lenders? What do small businesses want from the bank relationship? What are banks doing well, and what can they do better, to improve the customer experience – and as a result, acquisition, retention and cross-sell? What kinds of credit are SBOs using – or do they plan to use – from banks and alternative lenders? How are SBO attitudes towards, and planned usage of, alternative lenders evolving?

To answer these questions, we recently surveyed 500 U.S. SBOs. There are some great learnings on what SBOs value in a lender relationship, and what you can do to enhance it.

You’ll learn:
• The SBO business outlook
• SBO trust in 26 different industries, from alternative lenders to wireless service providers
• SBO awareness of and trust in 27 leading banks
• Bank industry, and top bank, Net Promoter Scores
• What SBOs want in a bank relationship
• Where banks are under- and over-performing against SBO preferences
• Current use and providers of credit products – including business credit cards, savings and checking accounts, loans, LOCs, factoring and MCAs
• Planned use and potential providers of credit products
• How SBO attitudes towards alternative lenders have changed
• SBO usage of and satisfaction with banking apps and events
• The impact of content marketing on bank brand perception, loyalty and upsell
• How to boost awareness and trust via content marketing

You’ll get valuable insights to put to work right away in your SBO customer experience and content marketing plans.

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Improving the small business banking experience

  1. 1. February 6, 2020 Improving the Small Business Banking Experience
  2. 2. INCREASING SALES TO SMBS 2
  3. 3. Output INSIGHT Topics Methods • Qualitative • Live / online focus groups • In-depth interviews • Quantitative • Custom online • SMB Pulse omnibus • Snap Poll Insight for CE / product / marketing strategy Data for PR / content / social / collateral programs 3 • Attitudes and usage • Buyer identification • Competitive perceptions • Market segmentation • Media behaviors / preferences • Message / positioning testing • Net promoter score • Persona / buyer journey • Purchase intent, behaviors, channels and preferences
  4. 4. OUTREACH Video Email Newsletters Checklists / Worksheets Case StudiesArticles Blog Posts White Papers Podcasts eBooks PR Surveys Social Media Handbooks / Guides Webcasts Slideshows Infographics Interactive Tools • Survey data • Creative brief • Editorial calendar • Content development • Content audit • Analytics Contribution • Expert • Actionable • Relevant • Easy to understand • Professional • Brand-building • Custom Principles Direct Mail Event Collateral Brochures / Sell Sheets Custom Pubs 4
  5. 5. Understand the small business banking experience Industry trust Bank relationship attributes Alt lender awareness, trust and usage The role of apps, events and content 1 2 3 4 5 Bank awareness and trust 5 WHAT WE’LL COVER
  6. 6. 6 METHODOLOGY Online survey via the Bredin.com/SMBPulse 500 SMB principals at U.S. companies with <500 employees (+/- 4% CI) Company Size Quotas 250 VSBs (<20 employees) 150 SBs (20-99 employees) 100 MBs (100-500 employees) November 1-7, 2019WHEN HOW WHO % Indicates highest % in a given column (A) / (B) / (C) Indicates statistically significant difference between columns Note: The SMB Pulse is open to marketer participation. Some charts in this deck do not total to 100% due to rounding. Weighting By Revenue <$500,000: 260n (83.4%) $500,000 to $999,999: 65n (5.4%) $1,000,000 to $4,999,999: 101n (5.2%) $5,000,000+: 74n (2.1%)
  7. 7. 7 RESPONDENT CHARACTERISTICS Principal (e.g., Owner, Founder, Partner, CEO, President, etc.) 100 % Male Female 57% 43% 6% 23% 29% 38% 4% Gen Z (18 to 22) Millennials (23 to 38) Gen X (39 to 54) Boomers (55 to 73) Silent Generation (74+) Respondent Age Company Age Business Outlook Title / Role Company Size Gender 50% 30% 20% VSBs (<20) SBs (20-99) MBs (100-500) n=500 5% 33% 29% 33% Less than 2 years 2-9 years 10-19 years 20 years or more 10% 37% 23% 25% 4% Up more than 100% Up 10% to 100% Up less than 10% Same as 2018 Down compared to 2018
  8. 8. 8 RESPONDENT CHARACTERISTICS West 27% South 37% Midwest 17% Northeast 19% n=500 Geography 36% 48% 16% Population Density Urban Suburban Rural 27% 15% 10% 13% 20% 8% 7% Less than $100K $100K to $249K $250K to $499K $500K to $999K $1M to $4.9M $5M to $10M More than $10M Company Revenue 40% 26% 21% 14% Manufacturing Construction/Mining/Contracting/ Electrical/Landscape/Plumbing/etc. 10% Manufacturing/Transportation and Warehousing 5% Automotive 2% Computer Hardware/Electronic Equipment 2% Pharmaceutical/Medical Devices/Biotechnology 1% Telecommunications 1% Energy/Utilities 0% Other Personal Services 9% Education/Training 5% Industry Professional Services Financial Services/Accounting/Bookkeeping 7% Computer Software/Internet 7% Medical 6% Advertising/Consulting/Design/Ma rketing Services 5% Legal 5% Banking/Insurance/Mortgage 4% Computer Services/Consulting 3% Publishing/Printing/Media 2% Architect/Engineering 1% Retail/Wholesale Retail 12% Entertainment/Recreation 4% Real Estate 4% Food/Beverage/Restaurants 3% Wholesale 2% Travel/Hotel/Hospitality 1%
  9. 9. DETAILED FINDINGS
  10. 10. On a scale of 1 (do not trust at all) to 5 (trust very much), please rate your trust in each of these industries: INDUSTRY TRUST SMBs trust their CPA more than any other kind of vendor… 5 (Trust very much) 4 n=500 RANDOMIZED10 33% 18% 18% 23% 16% 14% 14% 16% 14% 15% 14% 14% 12% 25% 37% 37% 31% 35% 31% 30% 27% 28% 26% 27% 25% 26% 58% 55% 54% 54% 52% 46% 43% 43% 42% 41% 41% 40% 38% Your CPA Local / community banks Package delivery companies Credit unions Office supply stores / print centers Other small businesses Technology hardware manufacturers Cellphone manufacturers Hotels / hotel chains National / regional banks Airlines Wireless service providers Internet access providers / website hosts 𝚺
  11. 11. On a scale of 1 (do not trust at all) to 5 (trust very much), please rate your trust in each of these industries: INDUSTRY TRUST (CONTINUED) …and trust social media companies and alternative lenders least 5 (Trust very much) 4 n=500 RANDOMIZED11 15% 13% 12% 14% 14% 12% 13% 11% 11% 10% 11% 10% 10% 23% 24% 23% 20% 19% 20% 19% 21% 20% 17% 16% 12% 12% 38% 37% 36% 34% 33% 33% 32% 32% 31% 27% 26% 22% 22% Payroll service providers Credit card companies Local / long distance phone company Software companies Local technology solution providers Rental car companies Retirement plan providers Mutual fund companies Insurance companies Employee recruiting services / job sites Marketing services Social media companies Alternative / online lenders 𝚺
  12. 12. On a scale of 1 (do not trust at all) to 5 (trust very much), please rate your trust in each of these industries: INDUSTRY TRUST: REVENUE In general, trust increases with company size… n=500 RANDOMIZED12 58% 55% 54% 54% 52% 46% 43% 43% 42% 41% 41% 40% 38% Your CPA Local / community banks Package delivery companies Credit unions Office supply stores / print centers Other small businesses Technology hardware manufacturers Cellphone manufacturers Hotels / hotel chains National / regional banks Airlines Wireless service providers Internet access providers / website hosts Trust = 5 + 4 <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 56% 65% 73% (A) 80% (AB) 54% 54% 72% (AB) 69% (A) 53% 62% 71% (A) 62% 53% 52% 61% 66% 50% 57% 69% (A) 62% 44% 52% 55% 61% (A) 41% 49% 68% (ABD) 50% 41% 51% 62% (A) 50% 40% 51% 65% (A) 61% (A) 39% 52% (A) 65% (AD) 49% 38% 60% (A) 58% (A) 53% (A) 37% 54% (A) 57% (A) 58% (A) 36% 48% 62% (A) 49% (A) 56% 65% 73% (A) 80% (AB)
  13. 13. On a scale of 1 (do not trust at all) to 5 (trust very much), please rate your trust in each of these industries: INDUSTRY TRUST: REVENUE (CONTINUED) …although in many cases the $1M to $4.9M segment is the most trusting n=500 RANDOMIZED13 38% 37% 36% 34% 33% 33% 32% 32% 31% 27% 26% 22% 22% Payroll service providers Credit card companies Local / long distance phone company Software companies Local technology solution providers Rental car companies Retirement plan providers Mutual fund companies Insurance companies Employee recruiting services / job sites Marketing services Social media companies Alternative / online lenders Trust = 5 + 4 <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 35% 46% 66% (AB) 68% (AB) 35% 46% 60% (A) 50% (A) 34% 43% 54% (A) 47% (A) 32% 51% (A) 57% (A) 51% (A) 30% 46% (A) 56% (A) 53% (A) 31% 42% 52% (A) 45% (A) 28% 57% (A) 61% (A) 64% (A) 28% 54% (A) 56% (A) 64% (A) 28% 48% (A) 50% (A) 51% (A) 25% 40% (A) 48% (A) 49% (A) 25% 34% 46% (A) 35% 20% 31% 38% (A) 32% (A) 20% 37% (A) 38% (A) 39% (A)
  14. 14. Which of these is your primary business bank? Bank of America has the largest market share… n=500 RANDOMIZED 14 22% 14% 10% 4% 4% 3% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 25% Bank of America Chase Bank Wells Fargo Capital One U.S. Bank PNC Bank Bank of the West New York Community Bank TD Bank BBVA Compass Bank SunTrust Bank M&T Bank Key Bank Citibank Huntington Bank Regions Bank Citizens Bank BB&T Fifth Third Bank Santander Bank Another bank PRIMARY BUSINESS BANK
  15. 15. Please rate your awareness of (or familiarity with) each of these banks: BANK AWARENESS …and Wells Fargo has the highest awareness Very aware Somewhat aware n=500 RANDOMIZED15 53% 53% 53% 46% 43% 28% 22% 21% 16% 21% 22% 18% 21% 18% 16% 17% 18% 13% 14% 16% 14% 14% 13% 12% 11% 9% 11% 40% 40% 39% 43% 46% 40% 43% 43% 44% 38% 35% 34% 29% 27% 27% 24% 24% 27% 26% 20% 23% 22% 22% 21% 18% 19% 16% 93% 93% 92% 89% 89% 68% 65% 64% 61% 60% 57% 52% 50% 45% 43% 42% 42% 39% 39% 37% 37% 36% 36% 32% 29% 28% 26% Wells Fargo Bank of America Chase Bank Capital One Citibank U.S. Bank PNC Bank SunTrust Bank HSBC Bank Citizens Bank TD Bank Fifth Third Bank BB&T Regions Bank Bank of the West Union Bank KeyBank Huntington Bank Santander Bank M&T Bank First Republic Bank BBVA Compass Bank Comerica BMO Silicon Valley Bank New York Community Bank People’s United Bank 𝚺
  16. 16. BANK TRUST Chase is the most trusted bank Trust very much Trust somewhat n=varies RANDOMIZED16 30% 24% 28% 32% 27% 26% 26% 23% 23% 19% 31% 27% 25% 25% 26% 25% 26% 20% 21% 19% 24% 23% 18% 19% 24% 25% 20% 43% 48% 43% 39% 43% 44% 40% 41% 41% 44% 31% 35% 36% 36% 35% 35% 34% 40% 38% 40% 33% 33% 37% 36% 30% 29% 27% 73% 72% 71% 71% 71% 69% 66% 64% 63% 63% 63% 62% 61% 61% 61% 60% 60% 60% 59% 58% 57% 56% 55% 55% 54% 53% 47% Chase Bank (n=461) People’s United Bank (n=132) Santander Bank (n=195) Capital One (n=445) New York Community Bank (n=141) Citibank (n=444) U.S. Bank (n=340) Regions Bank (n=225) First Republic Bank (n=183) M&T Bank (n=184) Silicon Valley Bank (n=145) BBVA Compass Bank (n=180) BB&T (n=250) Bank of the West (n=214) TD Bank (n=283) BMO (n=162) Bank of America (n=464) Comerica (n=178) Citizens Bank (n=298) KeyBank (n=209) Union Bank (n=210) Fifth Third Bank (n=262) HSBC Bank (n=303) PNC Bank (n=327) Huntington Bank (n=197) SunTrust Bank (n=319) Wells Fargo (n=466) 𝚺 Please rate your trust in each of these banks:
  17. 17. BANK AWARENESS VS. TRUST Awareness and trust are generally inversely correlated 17 Bank of America Bank of the West BB&TBBVA Compass Bank BMO Capital One Chase Bank Citibank Citizens Bank Comerica Fifth Third Bank First Republic Bank HSBC Bank Huntington Bank KeyBank M&T Bank New York Community Bank People’s United Bank PNC Bank Regions Bank Santander Bank Silicon Valley Bank SunTrust Bank TD Bank U.S. Bank Union Bank Wells Fargo 40% 50% 60% 70% 80% 20% 30% 40% 50% 60% 70% 80% 90% 100% Trustverymuch/somewhat (ifsomewhat/veryaware) Awareness very/somewhat
  18. 18. Please select all the words that you would use to describe your bank: Respondents are most likely to describe their bank as ‘convenient’ n=500 RANDOMIZED18 55% 51% 50% 47% 45% 44% 41% 29% 22% 22% 20% 19% Convenient Reliable Friendly / approachable Trustworthy Helpful Secure Local Cares for me / my business Progressive Committed to the community Innovative Conservative WORDS TO DESCRIBE YOUR BANK <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 57% 40% 50% 47% 51% 38% 53% 55% 51% (BD) 37% 50% (D) 32% 47% 42% 51% 47% 46% (B) 26% 45% (B) 36% 43% 43% 53% 43% 43% (BCD) 26% 31% 26% 29% 22% 38% (B) 28% 22% 14% 25% 24% 22% 15% 24% 19% 20% 20% 25% 22% 19% 14% 20% 28% (B) 57% (B) 43% 55% (B)53% 53%
  19. 19. Do you plan to stay as a customer of your bank for the next five years? Nine in ten respondents plan to stay with their bank for the next five years n=50019 RETENTION OUTLOOK 90% 10%Plan to remain Plan to switch
  20. 20. Please select the top three reasons you plan to remain a customer at your bank: ‘Good customer service’ is the leading driver of satisfaction n=452 RANDOMIZED; IF PLANNING ON REMAINING AT THEIR BANK20 45% 36% 31% 29% 27% 21% 21% 18% 13% 13% 11% 6% 4% 2% Good customer service Convenient location(s) Low rates / fees Good online banking Reliable / rarely or never makes mistakes Easier to remain a customer than change banks Convenient hours Offers a wide range of products / services Access to / relationship with a business banker Good mobile banking app Offers good online business / financial management advice Fast credit / loan approval Supports local charities / organizations Other LOYALTY DRIVERS <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 46% 38% 42% 36% 37% (D) 25% 34% (D) 15% 31% 23% 36% 35% 30% 27% 19% 27% 27% 20% 29% 36% (B) 22% (B) 11% 13% 18% 20% 29% 26% 17% 18% 16% 22% 24% 12% 18% 22% (A) 20% 11% 29% (AC) 15% 17% 11% 11% 8% 9% 6% 5% 13% (A) 12% 3% 11% (A) 6% 17% (AC) 2% 0% 1% 2% 36% 36% (B) 42%38%46%
  21. 21. ‘Rates and fees’ are the biggest driver of dissatisfaction n=48 RANDOMIZED IF PLANNING ON LEAVING THEIR BANK WITHIN THE NEXT 5 YEARS21 54% 34% 34% 29% 22% 19% 13% 12% 12% 12% 9% 7% Lower rates and fees Offer / improve business / financial management advice Open a more convenient location Open longer hours Add new products / services Improve customer service Better access to a business banker Improve online banking Faster credit / loan approval Support local charities / organizations Improve mobile banking app Other INCREASING RETENTION <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 54% 33% 75% 50% 38% 11% 25% 13% 38% 11% 8% 38% 33% (C) 11% 0% 0% 21% 22% 33% 25% 21% 11% 8% 25% 13% 0% 33% 25% 13% 11% 8% 0% 8% 33% 25% 25% 13% 11% 0% 13% 8% 11% 17% 13% 4% 44% (AC) 0% 0%44% (AC) 50%75%54% Please select the top three things your bank could do to increase the likelihood of you remaining a customer:
  22. 22. On a scale of 1 (not at all likely) to 10 (extremely likely), how likely are you to recommend [vendor] to a friend or colleague? NET PROMOTER SCORE 22 Source: Retently NPS equals Promoters (∑10s+9s) minus Detractors (∑<7s) NEEDS IMPROVEMENT GOOD GREAT EXCELLENT -100 1000 30 70
  23. 23. On a scale of 1 (not at all likely) to 10 (extremely likely), how likely are you to recommend [vendor] to a friend or colleague? INDUSTRY NPS 23 Source: Retently NEEDS IMPROVEMENT GOOD GREAT EXCELLENT -100 1000 30 70 Department/Specialty stores Tablet Computers Brokerage/Investments Online Entertainment Online Shopping Airlines Smartphones Auto Insurance Laptop Computers Hotels Grocery/Supermarket Credit Cards Home/Contents Insurance Shipping Services Cell Phone ServiceBanking Software & Apps Life Insurance Drug Stores/Pharmacies Travel Websites Health Insurance Cable/Satellite TV Internet Service
  24. 24. On a scale of 1 (not at all likely) to 10 (extremely likely), how likely are you to recommend your bank to a friend or colleague? In aggregate, SMBs give the banking industry a good NPS n=50024 34% 18% 13% 10% 9% 5% 3% 3% 2% 3% 10 (extremely likely) 9 8 7 6 5 4 3 2 1 (not at all likely) BANKING INDUSTRY NPS 51% Promoters 22% Passives 26% Detractors NPS = 25
  25. 25. On a scale of 1 (not at all likely) to 10 (extremely likely), how likely are you to recommend your bank to a friend or colleague? U.S. Bank has the highest NPS (Minimum sample size of 10 customers)25 INDIVIDUAL INDUSTRY NPS 53% 50% 30% 40% 37% 24% 20% 32% 20% 25% 20% 24% 16% 27% 27% 13% 13% 20% 11% 26% 16% 7% 20% 7% 30% 5% 5% 13% 27% 5% 7% 5% 11% 11% 7% 7% 17% 4% 4% 7% 5% 2% 1% 7% 2% 1% 4% 3% 5% 7% 2% 8% 3% 1% 5% 67 50 50 45 37 31 27 14 U.S. Bank (n=15) TD Bank (n=12) Citibank (n=10) Bank of America (n=129) Capital One (n=19) Chase Bank (n=70) PNC Bank (n=15) Wells Fargo (n=56) GreatGood Promoters (9 or 10) Passives (7 or 8) Detractors (1 to 6)
  26. 26. Please rate the importance of each of these aspects of dealing with your primary business bank: BANK RELATIONSHIP ATTRIBUTES ‘Keeps my money secure’ and ‘low rates / fees’ are most important to SMBs Extremely important Very Important n=500 RANDOMIZED26 58% 46% 38% 35% 39% 26% 21% 18% 22% 18% 20% 21% 20% 18% 23% 16% 18% 17% 12% 11% 22% 30% 32% 31% 28% 29% 33% 29% 24% 28% 26% 23% 23% 25% 19% 26% 23% 22% 25% 15% 81% 76% 70% 66% 66% 55% 54% 47% 46% 46% 45% 45% 44% 43% 42% 42% 41% 39% 37% 26% Keeps my money secure Low rates / fees Customer service / quick problem resolution Convenience / location of bank branches Online banking Phone support Understands the needs of my business Services tailored to businesses of my size Large ATM network Committed to my community Services tailored to my industry Branches open long hours Quick approval of loan requests Innovative Mobile banking app Easy loan application process Large branch network Access to a business banker Broad product line Online advice (articles and tips) 𝚺
  27. 27. Please rate the importance of each of these aspects of dealing with your primary business bank: BANK RELATIONSHIP ATTRIBUTES: REVENUE ‘Keeps my money secure’ is the most important attribute of the banking relationship Extremely/very important n=500 RANDOMIZED27 81% 76% 70% 66% 66% 55% 54% 47% 46% 46% 45% 45% 44% 43% 42% 42% 41% 39% 37% 26% Keeps my money secure Low rates / fees Customer service / quick problem resolution Convenience / location of bank branches Online banking Phone support Understands the needs of my business Services tailored to businesses of my size Large ATM network Committed to my community Services tailored to my industry Branches open long hours Quick approval of loan requests Innovative Mobile banking app Easy loan application process Large branch network Access to a business banker Broad product line Online advice (articles and tips) <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 81% 80% 80% 80% 77% 68% 78% 78% 69% 72% 78% 74% 67% 65% 67% 64% 66% 68% 68% 78% (A) 54% 60% 68% (A) 62% 52% 55% 69% (A) 61% 45% 54% 67% (A) 54% 45% 54% 55% 50% 45% 51% 59% (A) 49% 44% 54% 59% (A) 54% 43% 49% 56% (A) 53% 42% 54% 62% (A) 55% (A) 41% 49% 65% (AB) 65% (A) 40% 55% (A) 51% 53% 39% 58% (A) 66% (A) 55% (A) 39% 58% (A) 58% (A) 54% (A) 37% 48% 61% (A) 61% (A) 35% 48% 52% (A) 55% (A) 25% 35% 40% (A) 36% (A) 81% 80% 80%80%
  28. 28. Please rate please rate how well your bank performs on each of these aspects: BANK PERFORMANCE Banks do best at keeping money secure… Extremely well Very well n=500 RANDOMIZED28 39% 38% 33% 27% 24% 25% 26% 29% 18% 17% 22% 19% 19% 20% 20% 19% 15% 16% 16% 15% 35% 28% 31% 34% 35% 32% 28% 23% 31% 32% 27% 29% 29% 27% 25% 24% 26% 24% 23% 20% 73% 66% 64% 61% 59% 56% 54% 53% 49% 49% 49% 48% 47% 47% 45% 43% 41% 41% 39% 35% Keeps my money secure Online banking Convenience / location of nearby bank branches Customer service / quick problem resolution Phone support Large ATM network Large branch network Mobile banking app Broad product line Innovative Low rates / fees Branches open long hours Committed to my community Services tailored to businesses of my size Access to a business banker Understands the needs of my business Quick approval of loan requests Services tailored to my industry Easy loan application process Online advice (articles and tips) 𝚺
  29. 29. …but for SBOs with $500K-$1M, banks do best on online banking Extremely/very well n=500 RANDOMIZED29 73% 66% 64% 61% 59% 56% 54% 53% 49% 49% 49% 48% 47% 47% 45% 43% 41% 41% 39% 35% Keeps my money secure Online banking Convenience / location of nearby bank branches Customer service / quick problem resolution Phone support Large ATM network Large branch network Mobile banking app Broad product line Innovative Low rates / fees Branches open long hours Committed to my community Services tailored to businesses of my size Access to a business banker Understands the needs of my business Quick approval of loan requests Services tailored to my industry Easy loan application process Online advice (articles and tips) <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 73% 62% 86% (AB) 77% (B) 65% 69% 81% (A) 77% (A) 63% 66% 71% 64% 60% 60% 78% (ABD) 62% 57% 66% 74% (A) 61% 55% 57% 68% (A) 61% 53% 65% 67% (A) 62% 51% 63% 69% (A) 59% 47% 57% 74% (ABD) 59% 47% 51% 69% (AB) 62% (A) 47% 52% 61% (A) 66% (A) 45% 65% (A) 68% (A) 59% (A) 45% 54% 68% (AD) 53% 45% 48% 67% (AB) 55% 42% 48% 76% (AB) 66% (AB) 40% 51% 69% (AB) 57% (A) 38% 49% 66% (AB) 62% (A) 39% 38% 67% (AB) 55% (AB) 36% 43% 66% (AB) 64% (AB) 33% 43% 53% (A) 53% (A) Please rate please rate how well your bank performs on each of these aspects: BANK PERFORMANCE: REVENUE 73% 69% 86% (AB) 77% (B) 77% (A)
  30. 30. IMPORTANCE VS. PERFORMANCE Banks most overperform on branch network, and least on rates and fees 30 Access to a business banker Branches open long hours Broad product line Committed to my community Convenience / location of bank branches Customer service / quick problem resolution Understands the needs of my business Easy loan application process Innovative Keeps my money secure Large ATM network Large branch network Low rates / fees Mobile banking app Online advice (articles and tips) Online banking Phone support Services tailored to businesses of my size Services tailored to my industry Quick approval of loan requests 10% 25% 40% 55% 70% 85% 10% 25% 40% 55% 70% 85% Performanceextremely/very Importance extremely/very Performance outweighs importance Importance outweighs performance
  31. 31. Please rate please rate how well your bank performs on each of these aspects: BANK RELATIONSHIP ATTRIBUTES It’s most important to SMBs than banks not make mistakes Strongly agree Somewhat agree n=500 RANDOMIZED31 53% 38% 38% 36% 34% 29% 27% 28% 23% 26% 24% 26% 20% 18% 26% 34% 31% 30% 30% 34% 34% 31% 35% 28% 28% 25% 30% 29% 79% 72% 69% 66% 64% 63% 61% 59% 58% 55% 53% 52% 49% 47% It is important to me that my bank does not make mistakes I am satisfied with my bank My bank always treats me fairly My bank always treats customers with respect I would recommend my bank to peers My bank always delivers what it promises I can always trust my bank If I have a problem, I can always count on my bank to reach a fair / satisfactory resolution I prefer to do all my financial business with one company I would never consider a lender without physical locations, like branches or ATMs My bank is the perfect bank for companies like mine I feel proud to be a customer of my bank It is important to me that my bank stands for something, like supporting the community It is important to me that my bank is innovative 𝚺
  32. 32. Please rate please rate how well your bank performs on each of these aspects: BANK RELATIONSHIP ATTRIBUTES (CONTINUED) One in five respondents would rather go to the dentist than a bank branch Strongly agree Somewhat agree n=500 RANDOMIZED32 19% 16% 12% 18% 13% 15% 16% 12% 9% 10% 11% 11% 9% 25% 27% 28% 22% 27% 22% 19% 19% 21% 13% 12% 12% 10% 44% 43% 41% 40% 40% 37% 35% 31% 29% 23% 23% 23% 20% I can’t imagine a world without my bank I value data that my bank provides from surveys of businesses like mine My bank doesn’t offer anything different from any other bank I would happily get a loan from an online-only lender if I got faster approval or better terms Financial services innovation will come from outside the banking industry I am comfortable doing business with an online- only lender It is important to me that my bank provides business / financial management advice, such… I don’t pay attention to loan rates and fees In five years, the way I do my banking / financial transactions will be totally different I would be just as happy to do all my banking / financial transactions with a company like… I am likely to switch banks within the next 12 months In five years, I won’t need a bank at all I would rather go to the dentist than my bank branch 𝚺
  33. 33. 33 TAKEAWAYS SO FAR Learning So… ✔ SMBs highly trust their CPAs ✔ Consider a CPA referral program They also trust local / community banks If you are one, promote your community engagement Good customer service is a key retention driver Rates and fees are the biggest drivers of dissatisfaction Assess how well your bank is doing, for example through an NPS assessment, and competitive rate assessment ✔ ✔✔ ✔ ✔
  34. 34. Please indicate which best describes your company’s use of these financial products. FINANCIAL PRODUCT USAGE Almost two in three SMBs have a business checking account Currently have Don’t have, but had within the past year n=500 RANDOMIZED34 64% 58% 45% 31% 23% 17% 14% 14% 9% 10% 13% 18% 12% 17% Business checking acount Business credit card Business savings account Line of credit Loan Merchant cash advance Invoice factoring
  35. 35. Please indicate which best describes your company’s use of these financial products. FINANCIAL PRODUCT USAGE Adoption is highest for most offerings in the $1m-$5m segment Currently have n=500 RANDOMIZED35 64% 58% 45% 31% 23% 17% 14% Business checking acount Business credit card Business savings account Line of credit Loan Merchant cash advance Invoice factoring <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 62% 65% 85% (AB) 78% (A) 55% 68% 90% (ABD) 73% (A) 43% 43% 69% (AB) 62% (AB) 28% 51% (A) 54% (A) 65% (A) 22% 35% (A) 30% 34% (A) 15% 28% (A) 30% (A) 27% (A) 13% 14% 26% (A) 24% (A) 78% (A) 90% (ABD)68% 62%
  36. 36. Who is or was your loan from? LOAN SOURCE Most SMBs get a loan from their primary business bank… n=206; IF CURRENTLY HAVE OR HAD WITHIN THE PAST YEAR36 54% 21% 11% 9% 4% 1% My primary business bank Another bank An online or alternative lender A hard-money lender Peer-to-peer Another source <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 50% 63% 83% (AB) 78% (A) 23% (C) 14% 8% 8% 11% 9% 8% 11% 10% (C) 9% (C) 0% 3% 5% 5% 0% 0% 1% 0% 0% 0% 78% (A)50% 63% 83% (AB)
  37. 37. Who is or was your line of credit from? LOC SOURCE …as they do a line of credit… n=222; IF CURRENTLY HAVE OR HAD WITHIN THE PAST YEAR37 72% 10% 7% 6% 3% 2% My primary business bank A hard-money lender Another bank An online or alternative lender Peer-to-peer Another source <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 56% 70% 83% (A) 81% (A) 9% (C) 14% (C) 10% 3% 15% 6% 14% 7% 13% (C) 8% 3% 7% 5% 2% 0% 2% 2% 0% 0% 0% 81% (A)56% 70% 83% (A)
  38. 38. Who provides or provided your invoice factoring? FACTORING SOURCE …and invoice factoring… n=154; IF CURRENTLY HAVE OR HAD WITHIN THE PAST YEAR38 49% 17% 17% 10% 5% 3% My primary business bank Another bank An online or alternative lender A hard-money lender Peer-to-peer Another source <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 43% 61% 81% (A) 66% (A) 18% 11% 13% 14% 18% (C) 25% (C) 4% 6% 12% (C) 0% 2% 11% 5% 4% 0% 3% 4% 0% 0% 0% 66% (A)43% 61% 81% (A)
  39. 39. Who provides or provided your merchant cash advance? MCA SOURCE …and merchant cash advance. n=154; IF CURRENTLY HAVE OR HAD WITHIN THE PAST YEAR39 48% 20% 20% 9% 3% 0% My primary business bank An online or alternative lender Another bank A hard-money lender Peer-to-peer Another source <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 44% 44% 74% (AB) 71% (AB) 24% (CD) 15% 4% 3% 21% 15% 15% 17% 9% 22% (C) 4% 9% 3% 4% 4% 0% 0% 0% 0% 0% 71% (AB)44% 44% 74% (AB)
  40. 40. Which best describes your company’s intended use of these financial products in the next twelve months? Savings accounts represent the biggest opportunity 40 PRODUCT ADOPTION 59% 58% 42% 27% 24% 19% 17% 13% 9% 10% 10% 8% 9% 10% 12% 10% 15% 12% 12% 9% 9% 17% 24% 32% 51% 55% 63% 64% Business checking acount Business credit card Business savings account Line of credit Loan Invoice factoring Merchant cash advance n=500 RANDOMIZED Currently have; will continue to use current provider Currently have; will change providers Don’t have; no plans to getDon’t have, but plan to get
  41. 41. Who do you expect to get a new loan from? EXPECTED LOAN SOURCE The plurality of SMBs expect to get a loan from their current bank… n=109; IF PLANING ON SWITCHING PROVIDERS OR GETTING A LINE OF CREDIT41 32% 25% 16% 16% 11% 0% My primary business bank Another bank An online or alternative lender A hard-money lender Peer-to-peer Another source <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 29% 44% 52% 56% 25% 25% 20% 6% 16% 25% 16% 13% 18% 6% 8% 6% 12% 0% 4% 13% 0% 0% 0% 6% 29% 44% 52% 56%
  42. 42. Who do you expect to get a new line of credit from? EXPECTED LOC SOURCE …ditto for a line of credit n=101; IF PLANING ON SWITCHING PROVIDERS OR GETTING A NEW LOAN42 42% 20% 17% 14% 4% 2% My primary business bank An online or alternative lender Another bank A hard-money lender Peer-to-peer Another source <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 42% 36% 57% 50% 20% 27% 13% 21% 18% 9% 17% 14% 15% 9% 9% 7% 4% 14% 0% 0% 2% 5% 4% 7% 42% 36% 57% 50%
  43. 43. Would you use your alternative lender again? Four in five SMBs would use their alternative lender again n=80; IF HAVE USED AN ALTERNATIVE LENDER IN THE PAST YEAR43 ALTERNATIVE LENDER REPEAT USAGE 80% 20% Would use their alternative lender again Would NOT use their alternative lender again
  44. 44. How would you say your attitude towards getting a loan, line of credit or other kind of credit from an online or alternative lender has changed in the past year or two? ATTITUDE TOWARDS ALT LENDERS Two in five respondents feel more positively towards alternative lenders 44 22% 21% 46% 3% 9% I am much more likely to apply to an online or alternative lender than I used to be I am somewhat more likely to apply to an online or alternative lender than I used to be My attitude hasn’t changed I am somewhat less likely to apply to an online or alternative lender than I used to be I am much less likely to apply to an online or alternative lender than I used to be <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 20% 31% 38% (A) 30% 21% 26% 16% 14% 47% 34% 40% 47% 3% 3% 3% 3% 9% 6% 4% 7% 47% 34% 40% 47% n=500 RANDOMIZED
  45. 45. 45 TAKEAWAYS SO FAR Learning So… ✔ Assess your cross-sell efforts Alternative lenders are strong alternatives, especially for LOCs Four out of five alt lender customers would use them again Two in five respondents feel more favorable about alt lenders Assess your competitive stance vs. alt lenders There is substantial market opportunity for every form of credit, especially savings accounts SMBs are predisposed to get new products from their primary bank ✔ ✔ ✔ ✔ ✔ ✔
  46. 46. Please answer yes or no to each of the following questions: MOBILE APP ADOPTION Mobile app adoption is solid; usage and satisfaction are very high 46 n=500 RANDOMIZED Have downloaded their bank’s mobile app 62% Use their bank’s mobile app 88% Satisfied with their bank’s mobile app 92%
  47. 47. Please answer yes or no to each of the following questions: BANK-SPONSORED EVENTS The relatively few SMBs who have attended a bank event have found it very valuable 47 n=500 RANDOMIZED Have attended an event sponsored by their bank in the past year 24% Think the event was valuable 83%
  48. 48. Does your bank provide online business and financial management advice, for example in a small business resource center? CONTENT MARKETING More than one in four SMBs have read advice from their bank 48 n=500 30% 22%19% 29% Don’t know No Yes, and I have read it Yes, but I haven’t read it Please indicate whether your bank’s business and financial management advice: 96% 84% 86% 87% Is useful Makes me think more favorably of my bank Makes me more likely to stay with my bank Makes me more likely to use additional products or services from my bank Satisfaction with bank content is very high
  49. 49. Please rank-order these topics on which you would like your bank to provide business and financial management advice from most important (top) to least important (bottom): TOPIC PREFERENCE Not surprisingly, SMBs most want financial management advice from their bank % ranked top three n=500 RANDOMIZED49 56% 52% 35% 34% 32% 32% 30% 17% 11% Financial planning and management Law and taxes Technology Sales and marketing Operations Industry news and trends Leadership and management Human resources Import / export <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 57% (D) 45% 52% 38% 53% 45% 44% 49% 35% 37% 37% 34% 34% 31% 32% 30% 33% 31% 31% 27% 32% 35% 35% 32% 29% 38% 37% 45% (A) 17% 22% 17% 28% (A) 10% 17% 17% 18% 57% (D) 45% 52% 49%45%
  50. 50. Please rank-order the formats in which you would like your bank to provide business and financial management advice from most preferred (top) to least preferred (bottom): FORMAT PREFERENCE SMBs most like articles, followed by an analyst report and an email newsletter % ranked top five n=500 RANDOMIZED50 62% 55% 53% 47% 42% 38% 26% 26% 25% 24% 24% 23% 18% 16% 12% 9% Article Analyst report Email newsletter Case study eBook / guide / handbook Research report Podcast Blog post Peer forum or discussion board Webinar / webcast White paper Video Facebook Infographic LinkedIn Twitter <$500K (A) $500K to $999K (B) $1M to $4.9M (C) $5M+ (D) 63% 54% 53% 54% 54% 68% (A) 62% 70% (A) 54% 45% 48% 51% 46% 46% 53% 49% 44% (CD) 35% 31% 30% 38% 28% 44% (B) 34% 25% 40% (A) 28% 30% 26% 25% 24% 24% 26% (C) 20% 14% 16% 25% 28% 17% 30% (C) 24% 25% 23% 31% 23% 15% 25% 18% 17% 22% 31% (AD) 14% 16% 17% 18% 19% 10% 20% (A) 21% (A) 18% 9% 14% 13% 14% 68% (A) 62% 63% 70% (A)
  51. 51. 51 FINAL TAKEAWAYS Learning So… ✔ SMBs like bank apps ✔ Don’t have one? Get one ✔ …and events Test some events, if it is a strategy you’re not using ✔ …and content Develop actionable, ideally industry-specific content on financial management; promote it via an email newsletter and social ✔ ✔
  52. 52. Research • Product / go-to-market strategy / CE / NPS • Persona / buyer journey • Original data for standout content and PR Strategy • Content strategy • Creative brief / ed cal Content • Original content development • Exclusive SMB focus 52 HOW BREDIN CAN HELP Stu Richards, CEO stu@bredin.com Work with the experts in SMB insight and engagement
  53. 53. THANK YOU

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