Monday, November 16, 2015

Fall 2015 Banking Newsletter: Planning for the Future of Your Bank

Building Your Next Customer Base

What are you doing to develop your next customer base?
Recently, I saw a statistic that for the first time in our 239-year history, more Americans live in cities of 100,000 and over than do not. This trend, a long time in the making, caused me to begin thinking about the impact on community banks, especially those in rural areas. My question to you is: what are you doing to develop your next customer base?

Complacently serving your current customers, without regard to what the next 5, or 10 years might bring, is a formula for disaster. 

Here are three things that you can do today to proactively build your next customer base:

            First, take steps to understand the demographic changes in your communities – city, county, region – so that you have data. It’s difficult to see change when you are in the middle of it, so step back and assess. Years ago, Al Stewart sang, “In the islands where I grew up, nothing seems the same, still you never see the change from day to day.1” Think about your current customers and evaluate the “age” of your deposits in terms of the age of deposit holders. Start early to convince the next generation that you can be their bank, as well as “mom and dad’s” bank.

Next, take steps to ensure the viability of your community.  In recent years, I have written and spoken extensively on Generational Transfer and its impact on community banks and the communities they serve.  Read more at  
Civic and business leaders can influence the viability of a community. Supporting and encouraging local businesses, seeking to attract new business, tourism, and educational opportunities are all ways that you can seek to maintain and improve the health of your communities. If your mayor and alderman are more focused on beautification than economic development, seek to change that by striking a balance with commerce. I’m all in favor of beauty, but it takes commerce to make a community thrive.

These are just a few thoughts for you on this important issue. As always, I stand ready to advise you in these and other matters. Please call on me anytime.
Finally, for your bank, seek to enter new markets with similarities to those that you already successfully serve, and look for new products and services that can enhance your presence in all markets.  Wealth Management, for example, is often overlooked, but can be a powerful way to strengthen and enhance existing customer relationships, forge new ones, and preserve them over time.

 (1) Al Stewart, On the Border from the 1976 album Year of the Cat
Upcoming and Recent Speaking Engagements
October 16
Missouri Bankers Association:
Young Bankers Leadership Conference, St. Louis
October 21
Nebraska Bankers Association:
Marketing Conference, Lincoln
October 29
West Virginia Bankers Association:
Operations and CyberSecurity Conference, Charleston 
My speaking schedule for 2016 is filling up -
Updates and booking at
Trent Fleming is an industry expert on banking strategy. He travels around the country, conducting seminars on a variety of strategic, management, and technology topics. He also serves numerous financial institutions as a trusted adviser in managing today’s regulatory and technology environment.

As a consultant, he has worked with hundreds of financial institutions to create strategic plans that are blueprints for success, manage the selection and implementation of new technologies, and provide insight to streamline operations and improve productivity. operations and reduce costs.

Trents Comments is published six times each year and provides insight into strategic topics facing financial institution executives.
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Tuesday, October 27, 2015

Growing Commercial Business for the Community Bank

Growing Commercial Business
Trent Fleming, CEO, Trent Fleming Consulting

The battle in financial services is for the profitable small business.  Business customers are important for three primary reasons, in my estimation:

                            1)     They provide a dependable, low cost source of funds
                            2)     They are willing to pay fees when you can demonstrate value
                            3)     Many are closely or privately held, and provide access to other businesses with common ownership, as well as wealth management opportunities.

Banking options for businesses are often labeled as Treasury Management or Corporate Cash Management. The name is not important, but the concept is: acquire, promote, and support the banking products and services that your businesses need.

In order to to compete for business banking with regional and national banks,  community banks have to be effective on two fronts: products and perceptions. 

Products are easy.  Virtually any of the core vendor solutions available today support the commercial cash management solutions that your business customers will need.  You may have to acquire some ancillary solutions to address particular needs, but my point is this: you have access to these technologies.  Offering these products and services as bundled solutions for customers of various size and industry specialization is a key to building stronger relationships. 

Perceptions are hard.  Unless you are aggressively meeting with current and prospective business accounts, to promote your offerings, you are falling victim to other banks' marketing efforts that seek to discredit you.  Larger banks have traditionally done a better job of promoting services to business as a comprehensive set of products and services designed to help businesses get their banking done efficiently.  While there are some exceptions, in very large or highly specialized situations, for the most part, community banks have access to all the business account services that larger banks do, and are simply out-marketed.  Build your story and tell it regularly.

My presentation Packaging and Promoting Bank Services has been very popular with audiences recently.  I believe I strike a nerve around the importance of formalizing bundles of services for businesses of different sizes or in different industries, and presenting these bundles as solutions for the business.  Doing this says a lot to customers and prospects about the bank's interest in providing viable solutions.

So, how do you get started?  First, decide that business customers are important to your bank.  While you may maintain a retail or mortgage lending focus, you still need business customers, for the reasons outlined above.  Second, assess the extent to which your business customers are using your services now.  The list is virtually endless, but here's a start:

                            1)     Business Internet Banking                                         
                            2)     Bill Pay
                            3)     ACH Origination
                            4)     Remote Deposit Capture
                            5)     Sweep Accounting
                            6)     Interest Bearing Options
                            7)     Lending Products
                            8)     Merchant Services
                            9)     Business Debit and Credit Card solutions

Third, look for gaps: both in under-utilization of things you already offer, and in your failure to offer products and services required to compete in your market.  Fourth, begin assembling these products into categories.  A very small business, with limited needs, may only need basic business Internet to manage their accounts, transfer funds, and pay bills.  Business with a larger staff may have a need for ACH origination for payroll, and billing, and perhaps RDC if they receive a high volume of checks.  You get the idea.  The intent is to develop suggested bundles of solutions that you can then present to businesses in order to suggest solutions.  Don't over-think this.  The important thing is to get started. 

Once you have basic info about what customers are using today, and have assessed the gaps mentioned above, it's time to get moving.  Meeting with your officers with commercial account responsibility and discussing these findings is a good start. 

You'll also want to meet with your business customers:

Hold meetings with customers, in groups, or at their offices, to introduce the current state of banking technology, and get their feedback. Listening is critical . . . such a meeting should only be 25-30% presentation, the rest should be discussion and listening. In a relaxed environment, customers will open up and discuss pain points (which may not be directly related to the topics you introduced)

This is how you will learn what your customers really need and how you can best help them.

As you begin to execute your plan, there's no doubt that you will have relatively immediate success with some of your existing accounts strengthening those relationships by better promoting your products and services.  Leverage that into testimonial ads, and continue mining your own customer base, while aggressively looking for new business accounts that seem to fit the profile of businesses you are effectively serving.

What I want to do is help you to change the way you approach business banking.  For the better, and for the long run.  Perhaps these thoughts will get you moving in that direction.  As always, I'm available to assist should you have questions or need some outside guidance. 

Trent Fleming advises executives on management and strategy issues.  He can be reached at or on twitter @techadvisor