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Why bankers should become trusted advisors to small business customers

November 17, 2014
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In the 2014 J.D. Power Small Business Banking Satisfaction Study, small business owners indicated that a key component of a positive banking experience is the relationship they have with their account manager. The survey was released on October 28, 2014, and polled business owners from across the country.

The survey found that, for instances where the account manager is not viewed as a trusted advisor or there is no, one manager of the account, there is a a significant decrease in satisfaction than those with an assigned account manager, an average of 643 compared to 723 on a 1,000 point scale.

Account managers have the ability to build relationships with clients, making it easier to assess the customer’s creditworthiness and ability to take on a new loan. With a better understanding of qualitative factors of the client, such as character and business plans, bankers are better equipped to manage the loan as necessary, and small business owners feel more comfortable knowing they have someone to go to with financing needs and a champion within the organization.

Additionally, by having an in-depth knowledge of the account, account managers are able to help maximize the bank’s return on investment (ROI) and have a significant impact on customer satisfaction by increasing loyalty and deepening the share-of-wallet customers hold at the bank, according to J.D. Power.

The survey also asked participants to indicate the qualities that make an account manager a trusted advisor. Regular contact from the account manager topped the list, with 90 percent of respondents indicating contact is the most important component of a banking relationship. It is interesting to note that this contact does not have to be in person, as only 73 percent of respondents indicated in-person interaction is important.


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In addition, 89 percent of small business owners polled in the survey indicated it is necessary for the account manager to provide solutions/products to meet their needs, while 85 percent noted the banker should discuss the business and its unique needs. In other words, discussing the company's plans - growth, strategic focus, challenges, etc. - is crucial and should also include an explanation of financing options available to the company. Bankers are encouraged to act as consultants for the business owners, advising them on appropriate solutions to their issues.

J.D. Power offers the following steps and questions to turn account managers into trusted advisors:

• "Do you currently have the resources to grow your business without experiencing cash shortages?"

• Contact the client regularly throughout the year to discuss needs and/or recommendations

• Respond to clients’ needs in a clear and effective manner

By developing relationships with business borrowers, banks and credit unions can help their institution stand out from the crowd relative to other institutions that may have a consumer or other niche-lending focus or lack focus on relationships.

Relationship-based lending is when financial institutions use personal knowledge of the borrower to overcome issues of information opacity, and it can benefit both parties of the transaction. Studies have found that establishing a relationship between the institution and borrowers improves the availability of credit and lowers the collateral requirements for the borrower—a win-win for the bank and the business owner.


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