Table of Contents
Scope and Themes
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- What you need to know
- Scope of this report
- Data sources
- Consumer study data
- Advertising creative
- Abbreviations
- Terms
Executive Summary
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- Industry overview
- Small businesses need partners
- Technology is changing the selection criteria for financial services
- Marketing of financial services is about more than a checking account
- Ownership dictates some differences in small business
Insights and Opportunities
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- Key points
- Integrate your view of the small business customer
- Help your customers, help your bank
- Small business values second
Inspire Insights
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- Inspire Trend: “Subsidize My Dreams”
- Inspire Trend: “Decline of Deference”
Market Size and Forecast
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- Key points
- Size of the small business sector
- Small business drives the U.S. economy
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- Figure 1: Employment size of employer and non-employer firms in U.S., 2008
- Figure 2: Change in firms, by employee size in U.S., 2006-08
- Small business banking requirements
- Small business banking in the precarious U.S. economy
- Lending is a critical component in small business banking
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- Figure 3: SBA approved small business loans, 2009, 2010 and 2011
- Figure 4: SBA 7(a) top 15 lenders, by volume, through FY 2010
- Small businesses need varied financing sources
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- Figure 5: Small business financing used, 2008-2011
Competitive Context
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- Key points
- Analysis of marketing efforts to small businesses
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- Figure 6: Small business banking online, direct mail and print acquisition campaigns, January 2010-December 2011 and January 2008-December 2009
- Mega banks, community banks and credit unions
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- Figure 7: Number of bank branches as of June 30, 2002-11
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- Figure 8: Small business loans as share of assets, 1994 and 2010
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- Figure 9: Small business loans at credit unions, at community banks, and at large banks: Commercial & industrial loans and commercial real estate loans, billions of dollars, 2010
- Non-banks and small business
- High tech, high touch
Marketing Channels
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- Key points
- The channels of the future
- ‘Alternative channels’
- Technology’s impact on financing
- Relationships are the biggest win-win for financial institutions
- Mobile banking is growing among small business users
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- Figure 10: Banking activities conducted on mobile phone in last year, mobile phone owners, by age, November 2011
Market Drivers
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- Key points
- U.S. economy is still struggling
- Unemployment in the U.S.
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- Figure 11: Unemployment rate, 2008-11
- Cost of funds for banks
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- Figure 12: Average net interest margin, 2010-11
- U.S. inflation rate
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- Figure 13: U.S. inflation rate, Consumer Price Index (CPI), 2010-11
- GDP helps to gauge small business health
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- Figure 14: U.S. GDP, 2010-11
- Charge-off and delinquency rates are on their way down
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- Figure 15: Charge-off rates of commercial R.E., C&I, and total loans at all banks Q1 & Q3, 2007-11
- Legislation affecting small business
- Dodd-Frank Act
- Reg Q
- More on Dodd-Frank
- Small Business Jobs Act of 2010
- Legislation with a potential future impact
Leading Companies
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- Key points
- Small business satisfaction shows improvement
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- Figure 16: U.S. Small business banking satisfaction, ratings and rank with differences, 2010-11
- Figure 17: Small business banking satisfaction ratings over time, 2007-11
- Chase
- Citibank
- Bank of America
- Wells Fargo
- M&I Bank/BMO Financial Group
- U.S. Bank
- Navy Federal Credit Union
Innovation and Innovators
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- Key points
- FirstBank is number one in assisting its smallest small business customers
- Citibank for iPad
- U.S. Bank/Elavon
- Look Up With US – Facebook networking campaign
- Next Street Opportunity Fund
- Remote deposit capture
- Act local, be local
Marketing Strategies
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- Key points
- Print advertising
- Capital One Bank takes on local flavor to connect with customers
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- Figure 18: Capital One print ad, September and October 2011
- FirstMerit Bank goes loud and local
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- Figure 19: FirstMerit Bank print ad, December 2010
- Direct mail advertising
- TD Bank small business products
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- Figure 20: TD Bank print ad, 2011
- The Private Bank small firm mailing
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- Figure 21: The Private BANK direct mail ad, October 2011
- OnPoint Credit Union Business Interest Checking product mailing
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- Figure 22: OnPoint Community Credit Union direct mail ad, December 2011
- Customer Communication from M&I Bank
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- Figure 23: M&I Bank direct mail ad, January 2010
- Online and email advertising
- Chase promotes RDC with a free check scanner
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- Figure 24: Chase Free Check Scanner, 2011/2012
- Citywide Banks’ local relationships
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- Figure 25: The Citywide Banks online ad, May to June 2011
- Television advertising
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- Figure 26: Capital One Bank, 2011
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- Figure 27: Lindell Bank, 2011
- Figure 28: OnPoint Credit Union, 2011
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- Figure 29: 121 Credit Union, 2011
- Figure 30: AmeriMerchant, 2011
Who Are Small Business Owners?
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- Key points
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- Figure 31: Business owners, home-based vs. other locations, by gender and age, December 2011
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- Figure 32: Business owners, home-based vs. other locations, by number of employees, December 2011
- Figure 33: Business owners, home-based vs. other locations, by annual revenues, December 2011
- Sole proprieters most likely to operate in professional services
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- Figure 34: Type of business owned, by gender and age, December 2011
- Figure 35: Type of business owned, by number of employees, December 2011
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- Figure 36: Type of business owned, by annual revenues, December 2011
Small Business Owners and Banking
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- Key points
- Under-use of business accounts among sole proprietorships
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- Figure 37: Incidence of business account ownership, by number of employees, December 2011
- Figure 38: Incidence of business account ownership, by annual revenues, December 2011
- Types of products owned by small businesses
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- Figure 39: Type of products at primary bank, by number of employees, December 2011
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- Figure 40: Type of products at primary bank, by number of employees, December 2011
- Figure 41: Type of products at primary bank, by annual revenues, December 2011
How Small Business Owners Pay For Things
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- Key points
- Four fifths use checking accounts
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- Figure 42: Payment method typically used for rent and utilities, by gender and age, December 2011
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- Figure 43: Payment method typically used for rent and utilities, by number of employees, December 2011
- Figure 44: Payment method typically used for rent and utilities, by annual revenues, December 2011
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- Figure 45: Payment method used for day to day supplies, by gender and age, December 2011
- Figure 46: Payment method used for day to day supplies, by number of employees, December 2011
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- Figure 47: Payment method used for day to day supplies, by annual revenues, December 2011
- Many businesses still rely on personal credit cards for major purchases
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- Figure 48: Payment method used for major purchases, by gender and age, December 2011
- Figure 49: Payment method used for major purchases, by number of employees, December 2011
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- Figure 50: Payment method used for major purchases, by annual revenues, December 2011
- Credit cards dominant for online business purchases
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- Figure 51: Payment method used for online purchases, by gender and age, December 2011
- Figure 52: Payment method used for online purchases, by number of employees, December 2011
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- Figure 53: Payment method used for online purchases, by annual revenues, December 2011
What Respondents Think About Their Businesses and The Economy
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- Key points
- ‘Business as usual’ for the majority
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- Figure 54: Cash flow situation over last year, by gender and age, December 2011
- Figure 55: Cash flow situation over last year, by number of employees, December 2011
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- Figure 56: Cash flow situation over last year, by annual revenues, December 2011
- Businesses are seeking to reduce debt
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- Figure 57: Financial issues in the past year, by gender and age, December 2011
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- Figure 58: Financial issues in the past year, by number of employees, December 2011
- Figure 59: Financial issues in the past year, by annual revenues, December 2011
How Growth and Cash Flow Needs Are Funded
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- Key points
- Only a minority of businesses say they are reliant on credit
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- Figure 60: Methods for funding growth/cash flow needs, by gender and age, December 2011
- Figure 61: Methods for funding growth/cash flow needs, by number of employees, December 2011
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- Figure 62: Methods for funding growth/cash flow needs, by annual revenues, December 2011
Female Small Business Owners – A Closer Look
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- Key points
- Special considerations for women-owned small business
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- Figure 63: Funding of business growth, by gender, December 2011
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- Figure 64: Perception of business cash flow over past year, by gender, December 2011
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- Figure 65: Importance of aspects of business financial management, by gender, December 2011
- Female respondents are optimistic about funding their small business
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- Figure 66: Importance of aspects of business finance, by gender and no. of employees, December 2011
Appendix: Trade Associations
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