The economy has gone from bad to worse recently, and several business bank executives have told us that they expect cost pressures to go up as a result.

When budgets are tight or future revenue uncertain, there’s a greater focus on the return banks get from the money they spend. Investments in customer research and the customer experience tend to be scrutinized the most – mainly because it’s hard to measure the value these expenses generate for the bank.  But cutting these items can limit banks’ understanding of customer preferences and hurt their ability to stand out in today’s competitive market.

To maintain investments in customer research initiatives, business bank leaders must connect customer feedback to concrete changes the bank can make and prove how these changes can increase revenue. Three progressive firms have accomplished this by:

1. Establishing Listening Posts to Capture “Voice of the Customer” During Critical Interactions
2. Capturing (and Organizing) Informal and Unstructured Customer Feedback
3. Identifying and Investing in the Service Moments that Matter Most Based on Customer Feedback

Board members, get the details about these three practices, and consult our recent research outlining  six principles for bank executives operating in a cost-conscious environment.  

I used to assume that older business owners received better service than younger customers. Older business owners are closer to retirement, and banks stand to really benefit from the business transfer. And I also thought that these older business owners would prefer and demand higher touch relationships. So business bankers would have two reasons for spending more time with older owners than younger ones.

I was pretty surprised to learn that’s not necessarily the case.  

We recently completed a profile where we compared the needs behaviors and attitudes of Baby Boomer owners versus those of business owners belonging to the “Gen X” group. A couple of findings caught our attention and challenged what we first assumed.

1. Gen X-ers, not Boomers, receive professional help: Boomers are less likely than Gen X-ers to receive any type of professional guidance, from how to manage risk to how to improve operations.  We can think of a couple of reasons why. Perhaps Boomers are more experienced and therefore do not need as much professional help. Or maybe they are less amenable to business advice because they plan to exit the business sooner.
2. Gen-X owners say they have better RMs: Compared to Boomers, Gen X-ers say they have RMs who are more responsive, more helpful, better advisors, and better advocates. (Unfortunately, though, those favorable opinions don’t translate to more loyalty. Gen X-ers are equally as satisfied and equally as likely to leave the bank as Boomers, despite the better assessments of their RMs. )
3. Owners of all age are unprepared to exit the business: Boomers do say they plan to exit the business sooner than Gen-Xers, but they are equally as unlikely to have a formal, written succession plan. And a surprising number (21%) say they don’t even know how they want to exit the business.

It seems clear that business bankers have an opportunity to engage Boomer owners further. What have your experiences been when interacting with older versus younger business owners? And how do you make sure you engage and retain business owners before retirement? Share your thoughts, and read our profile of Boomer versus Gen X business owners.

When implementing bank wide marketing strategies, many banks often struggle with developing individual, cross-functional, and organizational support. Inability to address these challenges can hinder initiatives that can increase cross sales. See how one bank overcame these operation difficulties when implementing a bank wide needs identification protocol for small business customers.

Challenge: Sperry Bank’s (pseudonym) implementation of a centralized customer insight protocol for small business customers was tempered by operational challenges affecting the initiative’s success. These challenges included bank staff that did not fully understand their responsibilities, silos that acted in isolation of each other, the organization’s inability modify the marketing campaigns as needed, and the lack of performance measures to demonstrate success.

Solution: In order to implement a centralized customer insight protocol, Sperry Bank institutionalizes the marketing initiative by developing broad organizational support and cooperation. Creating this organization support and cooperation required:

• Establishing clear staff roles and instituting expert needs identification specialists to complement the RM sales function.
• Creating a marketing council of staff and marketing experts to prioritize opportunities and ensure an organizational consensus around programs.
• Tracking the results of each program to allow for adjustment or termination.
• Developing performance metrics to scientifically measure success of various strategies.

As a result of institutionalizing customer insight generation, Sperry Bank was able to develop needs identification profiles and effectively target customers; increasing the number of loan approvals from 45% to 80%.

Board members, learn more about Sperry Bank’s institutionalized customer insight protocols here.

One of the most frequent questions we get from members focuses on the differences between men and women business owners. These members want to understand the defining features, fears, attitudes, and needs of male versus female business owners and what they can do to appeal to each group.

In response to these questions, we recently completed a brief where we compared male and female small business owners across a variety of attributes, including attitudes about risk, preferences in a bank, and future outlook. We were surprised both by some of the differences as well as some of the similarities we observed.

A couple of findings that caught our attention include:

1. Women business owners emphasize banks’ reputation and ability to resolve problems, whereas men are more likely to value access to credit and ability to address financial needs.
2. While both men and women emphasize the banks’ capabilities over those of the RM, male business owners are slightly more likely to value the RM than women.
3. And despite different preferences, women and men tend to observe the same characteristics in both their RM and business bank and are equally as satisfied with and loyal to their current primary provider.

Board members, review the full brief and share your successes, challenges, and questions when creating differentiated offers for women-owned businesses.

Help us gain insights on how different people approach customer-facing decisions by participating in our new research survey on understanding customer related decisions.

It’s easy—approximately 15 minutes long, the survey will ask you various questions relating to how you consume information relevant to your work.

And, since we value your input, participants who complete the survey will be entered in a raffle to win a Kindle 2, or cash equivalent. Winners will be contacted by email after the survey completion in August.

Board members, join our research efforts on understanding customer related decisions, here.