Many industries operate under the myth that bigger is always better. But, when it comes to continued success in the financial services space, firms now recognize that small and medium sized companies may hold the key to prosperity. SMBs offer financial institutions the opportunity to not only expand their client base, but also explore fruitful, long-lasting relationships that benefit both the bank and the business.
Deloitte notes in the report, “Tapping the Potential of Small Business” that, on average, small businesses typically maintain banking relationships for at least 15 years, emphasizing the likelihood for long-term loyalty. But, before financial institutions can nurture and retain, they must first entice and acquire. Therefore, firms must tap into the granular nature of the SMB space in an effort to connect and engage prospects effectively. Through value and understanding, banks can position themselves as business partners, first and foremost, who only have the customer’s best interest at heart.
Understand Customer Preferences to Meet Need at Inception
Before financial institutions can effectively target and acquire small business clients, leaders must develop an understanding of this particular segment’s needs and preferences so they may cost effectively meet the company’s requirements. Banks must bring all available data together to decipher and comprehend the basic SMB customer journey and lifecycle. Without this foundational knowledge, firms are doomed from the start, making this step crucial for financial leaders.
Ultimately, financial institutions are no longer in control of the customer journey, as buyers typically make their decision before they ever speak with sales and marketing. Potential clients research the market well before committing to any organization. Therefore, executives on the sales side of the equation must understand the critical steps along the customer journey so they may position their offerings in front of the prospective client at the most relevant time during the process.
Propose Partnerships That Add Value and Strengthen Loyalty
Banks that wish to acquire small business clients must cultivate strategies that promote partnership and collaboration. Initially, these institutions may want to proactively offer useful tools and advice in an effort to position themselves as competent thought leaders in the financial services space. Firms that promise better cash flow management, an enhanced peer network, and tips from industry experts bring added value to prospective small business customers, as these company leaders will likely view such banks as more than service providers. SMBs seek partnerships above all else, and bankers have the potential to become facilitators and advisers.
Once banks have proven their worth using this value proposition, executives can go about solidifying new relationships by cultivating loyalty. Customized products, personalized service, and relevant insights all demonstrate the given institution’s dedication to the SMB’s well-being. Such practices also support mutual profitability because banks that help their partners succeed also thrive by association.
Because small and medium sized businesses often struggle to keep pace with their big business counterparts, such companies want to be sure all time and money investments benefit the bottom line. That’s why banks must provide sustained support. Every cent and every second must be spent wisely. Prosperous banking relationships will rely upon these valuable partnerships and their constant understanding as the collaborative spirit guides financial institutions down the road to small business success.
Contributions from Carrie Thomas, consultant, product management at TTEC.
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