It almost never happens: the biggest competitor on the block stumbles and stops being an effective force in the market. He is the subject of congressional investigations. He gets pilloried in the media. His customers actually become reluctant to admit they do business with him. The government calls him a bad guy in the media for days in a row over several months, AND, get this, shames him into not taking a salary!
And that’s not all.
Here’s the really interesting part: all of the smaller competitors have almost nothing to say. Not a peep. Almost none of them get out front with the message “Hey, now’s a good time to switch to me!”
Sound strange? Well, this is what’s happening to community banking – at least in my small corner of the world. It beats anything I’ve ever seen in my 20+ years of watching.
Here’s why this matters. And what community bankers can do about it.
A recent study found that in 2009 small businesses were far more likely to have their credit needs met by a community bank than by the 18 largest banks. Re-read the first sentence, slowly. Do you get what I get by this? The local community bank is the best source of credit to small business. So, what do you think? Is this a marketing opportunity for community banks? The US is still a “market”, right?
So, why aren’t community bankers making hay with this?
We don’t know for sure, but we do think they may be crazy. Small business brings not only manageable lending demand, but they also bring low-cost deposits. Many small businesses are still viable. Small businesses are not that hard to sell. They want attention. They want to be important. And, they want to be the object of a bank’s intelligent interest. So, what’s so hard about mounting a small business campaign?
Here’s another opportunity community banks are missing.
Joe Customer, his wife, family, employees and neighbors don’t think there’s much difference between Bank of America and Bank of Main Street. (We know this because we talk to bank customers all the time.) So, if you’re Bank of Main Street you need to be out in the market, making sure everyone knows why your bank is the best bank in the Universe….or at least, within 50 miles!
But, again, the community bankers are being very quiet about this. Very quiet…
So, what is a community banker to do?
Grab some market share. Don’t miss the opportunity that the competition is handing to you on a plate. Don’t make excuses. Particularly, don’t say “I can’t afford it.” You don’t know that until you price it.
Here’s something to think about. If you have $1 million of excess capital and a fairly stable loan portfolio you can probably afford to spend between $25,000 and $100,000 to get on top of your market. For most living bankers, market share has never been this inexpensive.
How do you get your arms around this?
Hire a bank marketing and advertising firm who cares about the banking community and who has the seasoned experience to create an affordable, and effective, method to capitalize on the community banking opportunity of the century!
We want your feedback!
What do you think? What has your bank done that was great for your small business customers? Drop us a line or leave a comment.