Sweating the small stuff: acquiring and retaining small-business customers.

• Position: Marketing edge - Interview

Almost every bank these days is working hard to acquire and keep small-business customers. The reality is that small business is profitable business.

This year's ABA Marketing Conference, which will be held Sept. 12-14, will include a workshop dealing with this topic. Entitled "There's Nothing Small About Small Business: Acquiring and Retaining Profitable Small-Business Customers," the session will feature marketers from three institutions of different asset size: Madeline Belfoure, from CornerstoneBank ($100 million), Atlanta; Steve Stevenson, Union Safe Deposit Bank ($1.1 billion), Stockton, Calif.; and Nick Vaglio, CFMP, of Wachovia Bank, Summit, NJ. All three participants are Marketing Network members.

To get a flavor of the workshop, Marketing Edge asked a few questions of Madeline Belfoure of CornerstoneBank:

Why should community banks be concerned about acquiring and retaining smell-business customers?

Small-business customers represent a growing market segment and a profitable one at that. There are an estimated 25 million small businesses in the United States, and they are growing at a rate of 14 percent per year. And according to Bancography, small businesses tend to be two to three times more profitable than the average retail customer. So in our situation, not having the resources to serve or attract the mass market, it made sense to target our efforts on this smaller subgroup.

Do community banks have any advantages in this area--compared to larger banks?

Certainly. Community banks can offer the small-business owner more personal attention and a non-cookie-cutter approach to lending and banking services. Since decisions are made locally and usually within that same office, many other customer attributes (such as reputation, relationships in the community, other capital resources) can be considered. With third-party partner ships, community banks can offer many of the...