Banks Get Mediocre Report Card from Small Businesses

by Kevin Casey on January 7, 2011
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Banks received only so-so grades for their small business divisions in a recent study, which showed a noticeable lean toward sales rather than service.

The 2010 Small Business Banking Study, conducted by Ath Power Consulting, put 33 banks to the test during the course of the year, and while it found that reps knew their products well and did a fine job of selling them to prospective small business clients — product knowledge and closing earned the study’s highest marks — they scored an average 77 (out of 100) points in total customer experience.

Even the report’s best performers — Capital One, Chase, and Citizens Bank — were just “B” students, so to speak, sharing the best overall score of 84. In fact, only seven institutions in the study cracked the 80 point mark.

While banks have rolled out a wider range of services designed to attract and retain customers — and to offset reduced fees as a result of recent federal regulatory reform — relationship building with business clients seems to have suffered. One in four potential small business customers in the study received no acknowledgment upon entering the bank, and one in 10 had a wait time of more than 10 minutes. 21 percent of bankers didn’t ask for the client’s name, contact information, or business card.

Perhaps most surprising: More than one-third of bankers didn’t try to determine the size of the potential client’s business.

The report comes at a time when small business borrowing is back on the rise, according to new data from the Thomson Reuters/PayNet Small Business Lending Index. But banking means more than borrowing, and the wide range of products and services available requires that you assess your needs before signing on.

In that area, banks appear to be doing better: 87 percent of bankers tried to determine the needs of the business before offering their bank’s particular products and services, a major improvement from the 2009 version of the study, when only 59 percent did so. The improvement comes with good reason: When the banker did not ask questions to determine the business’s priorities and find the best product fits, roughly four out of five potential customers in the 2010 study later said they would not return.

The study used a profile of businesses with between $500,000 and $5 million in annual revenue, which may make some of its findings more fascinating: If a $2 million business doesn’t merit a handshake, what does a $200,000 business get? (The study did note that there was no appreciable change in service or product offerings based on a business’ revenue.)

How does your bank rate? Is your business on a first-name basis?

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