What Should Bankers Do to ‘Understand’ their Business Banking Customers?


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Recently, I attended the RMA/American Banker Small Business Banking Conference in Scottsdale, Arizona. One of my takeaways from the conference was the imperative for bankers to develop a much better understanding of their customer and their businesses. What are their goals? What concerns do they have? What’s important for them?

Knowing your customer is critical for any sales-person, but it’s especially important in this specific banking context. First, small businesses have the lowest satisfaction score out of all the segments that J.D. Power tracks in their annual financial services satisfaction surveys. Moreover, small business satisfaction has not budged in several years (Figure 1), driven in part by the inability for bankers to understand their customer’s needs and objectives. Yet, the surveys also show that there is a potential for massive upside. J.D. Power has indicated that satisfaction scores rise by 139 points when the banker demonstrates a ‘complete’ understanding of the customer’s situation and pathway to success.

The conference presentations allowed me to gain a much deeper appreciation for why small businesses care so much about the banker’s ability to understand them. Owners are incredibly vested in their small businesses professionally, emotionally and financially. Consider these facts presented at the conference:

  • 1/5 of small business owners use the equity in their homes to finance their business. As one executive put it aptly, “they’re all in.”
  • Small business owners derive enormous satisfaction from their businesses. In a survey, 41% of small business owners defined success as satisfaction in terms of ‘doing what I love’, ‘having happy customers’ and achieving ‘work-life balance.’
  • Small business owners find that they have ‘the most in-common’ with others in the same industry. They are immersed in their business and expect their service providers to share their passion and provide relevant advice.

No wonder that nearly every presentation at the conference emphasized how important it is for bankers to understand their small business banking customers. Yet, what surprised me was the virtual absence of concrete, practical perspectives and tactics for how the bank can help front-line business bankers do that. I was also surprised by the fact that only one bank raised the possibility of identifying and acting on customer insights drawn from data (i.e., internal banking data, external data, social media data). Banks are sitting on goldmines of internal data about customers that could shed insights on behavioral patterns. And, the internet and social media are generating reams of contextual information about companies and decision-makers.

If you’re a small business banker or executive already applying data and analytics to develop actionable customer insights, we’d like to hear from you.

If you’d like to learn how to implement an operational, data-driven capability to help your bankers demonstrate a complete understanding of their customers, I invite you to click here to read our whitepaper: “Banking on Predictive Sales Intelligence: Six Steps to Data-Driven Selling in Business Banking.”

Republished with author's permission from original post.

Andrew Somosi
Andrew Somosi is the SVP of Marketing and Business Development at Lattice Engines. Prior to Lattice Engines, Andrew was an Associate Principal at McKinsey & Company. Andrew has a BA in Economics and Political Science from Columbia University and an MBA from The Wharton School of the University of Pennsylvania.


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