Thinking Small

Drive through Southwest Florida and you may think that you've passed at least one bank branch on each block.

"Southwest Florida is terribly over-banked," one local banker says. "I think there may be more bank branches than restaurants."

That may be a slight exaggeration, but the sheer numbers explain a large part of why banks have become so aggressive in building branches and advertising: Both are essential. Nationally, banks spent more than $4 billion on marketing in 2002, up 4.5 percent from 2001. While Southwest Florida bankers are reluctant to divulge numbers for their own spending, they are clearly shelling out significant dollars for advertising, direct mail and a variety of other forms of marketing.

"Every bank has the same basic products, but not all approach each market, product and client similarly," says Joseph M. Wheeler, president of the Southwest Florida region of Atlantic States Bank. "The approaches differ in the quality of the staff delivering or selling the products, particularly in the small-business market, our most important business segment."

With that segment comprising a good part of Southwest Florida's business climate, banks are constantly creating innovative products and tweaking their strategies to develop lasting relationships with small-business owners. The U.S. Small Business

Administration estimates that 70 percent of all job growth occurs in small business.

"People are starting small businesses constantly," says Wachovia Gulf Coast president Adria Parsons. "We have huge potential. This is where we have the most room for expansion."

At SunTrust Bank, new Lee County president Bruce Schultz agrees. "The number of small businesses we have [in Southwest Florida] is rapidly growing. Small business is vital to our bank," he says.

Because of the cutthroat competition between banks, Southwest Florida business owners are in a great position to shop around for the services they need-and they don't have to leave their office to do so.

"The days of sitting at your desk and waiting for a client to come in are gone," says Doug Davidson, senior vice president of small business marketing for Bank of America, the largest bank in the area.

The personal approach is one of the lost arts in banking, says John Moran, president and chief executive officer of Cape Coral-based Riverside Bank of the Gulf Coast. "I've always been taught that to go out and find the business is better than being inaccessible.

Most of the great relationship stories happen with a handshake-and in the customer's place of business, not ours," he says.

At Pelican National Bank, which considers the small-business client its niche, president Mike Surgen believes it's important to meet the customers at their place of business so bankers get to know their business. "Take a guy who has a 12,000-square-foot warehouse. He's got jeans and a T-shirt on," says Surgen. "He's not comfortable walking into some bank where they have 30-foot ceilings, marble floors and antique furniture. That doesn't interest him."

These days, most bankers don't even expect potential business clients to walk in. "We call on customers," says Brenda O'Neil, president and chief executive officer of Premier Community Bank of Southwest Florida. "It's one of the best marketing tools. It all builds into knowing your customers, knowing their business. We need to go out and learn what their product is and how best to adapt their banking needs to what we can offer."

A Renewed Focus

Placing a high priority on attracting small businesses is not a new trend. But in the last few years, the approaches have changed.

"We have been focused on small business for the last 150 years," says Davidson, whose territory runs from Sarasota to Naples. Last year Bank of America became the number-one SBA lender in Southwest Florida, increasing its portfolio from 2,000 loans to 4,000 loans.

The bank recently developed a client team concept that combines a client manager with two or three experts in various areas who assist in meeting the needs of the customer. At a minimum, Davidson says, those experts meet monthly to talk about each client and brainstorm ideas to help.

For example, a large title company in Southwest Florida (which Davidson would not name) was eager to use Bank of America because of its multiple locations. The firm had been forced to deal with different banks in different counties. Sometimes, even if those banks were under the same national umbrella, they couldn't talk to each other because of differing electronic systems. "We were able to develop a multi-state, multi-location deposit system that could be managed by one person in Southwest Florida," he says.

In the past year SunTrust has introduced a number of new products for small-business customers, ranging from 15-year commercial mortgages at fixed rates to a range of equipment loans and lines of credit. This winter, SunTrust had a "truckload sale" offering special rates on lines of credit and even cash to customers who switched to the bank. In addition, SunTrust is developing an equity loan on commercial property.

With centralization of processing (offered by most large banks), small-business loans now mirror the consumer loan process, Schultz says. On small-business loans, many of which are $50,000 or less, the bank will have an answer back to the customer within two or three days. "That's different from a $5 million loan, which, depending on the complexity, may take longer to process. But when we're looking at a small-business loan, we really look at how well they have handled their personal business in the past," he says.

To focus on the small-business client, Riverside Bank, which has seven locations in Lee and Sarasota counties, offers a Lifetime Business Account-a no-maintenance-fee account allowing up to 250 items per month for the life of the account.

Wachovia, one of the top five banks in the country and the second largest in Lee and Collier counties, has "greatly changed the way we market. Our business bankers are commercial lenders," says Parsons.

In Wachovia locations where there's a lot of business traffic, customers find a concentration of business bankers who work directly with branch managers to meet the needs of clients; other locations concentrate more heavily on personal banking.

"Small-business customers are interesting because so much of their personal and business lives are intertwined," she says. "Large corporations keep the business and personal separate. But when they are starting out, many people use the equity in their homes, their credit cards and all kinds of means. When you look at a small-business customer, you have to look at how they handle their personal lives because they are so closely tied."

Because of its size, Wachovia also has centralized many of its functions, such as processing loans. The business banker works with the customer to prepare the information needed to obtain a loan, then turns it over to central processing. "It's a mechanism for expediting the process," Parsons says. "When we hire community bankers, we hear how relieved they are that they don't have to do all the spreadsheets and underwriting work. They have the time to be creative thinking about meeting their customers' needs."

Service Sells

Vince Adams, the owner of factory first, a lighting and fan store with locations in Naples and Bonita Springs and 15 employees, chose to bank with Atlantic States, which has offices in Bonita Springs, Cape Coral, Fort Myers, La Belle, Marco Island and Naples, because of the level of service. "They have experienced officers that can make a decision, and they were eager to get the business," Adams says.

Wheeler says the bank's strategy is simple: Its most experienced bankers call upon the small-business market to understand the businesses' needs, offer solutions and follow through with delivery of high-quality service.

Area bankers strive to be indispensable advisors to small business, points out Mike Geml, president of Busey Bank of Florida, which has offices in Fort Myers and Cape Coral and is a preferred lender for the SBA. "We know that often a small-business owner doesn't have the time to take care of business plans. They're usually only a one- or two-person operation. We provide guidance so they're not writing a recipe for failure but rather a business plan for success."

Bank of America uses its size to attract business, marketing its strong presence and convenience with the breadth of products it can offer.

Although Edgar and Tiffany West had been in the corporate world for 15 years, they never had their own business. Nancy Limb, vice president and senior client manager at Bank of America's Naples branch, worked with them from the time East Indies Trading Co. was a dream to its position today as a business with 16 full-time and 12 part-time employees. "When we think of the bank, we think of Nancy," says Edgar. "It's like having a friend in the business. She sets everything up for us, from our first small-business loan to credit card machines, international wire transfers and payroll. We can do it all over the Internet from our home office, or we call her direct from Thailand, Burma or Singapore and do our banking all over the world."

Smaller banks focus on the advantages of local decisions and talking directly to the people who make those decisions.