Hot? or Cold? Announced or unannounced? Which is the best type of sales call? Marketers from three different banks relate their experiences.

• Author: Sablosky, Tanja Lian
• Position: Sales

Are unannounced sales calls the best way to woo small-business customers? Practices vary widely from bank to bank. Some institutions say they don't make unannounced calls, at at least not regularly. Others say that they routinely make unannounced calls. A few banks go so far as to claim that these types of calls are the "secret" to their success.

For many financial services institutions, small business makes up between 25 and 35 percent of their market, with the remainder falling into categories including retail, commercial and consumer loans. The Small Business Administration (SBA) reports that small businesses, defined as independent businesses having 500 employees or less, represent more than 99.7 percent of all U.S. employers and create more than 50 percent of nonfarm private gross domestic product. Data from 1997 (the latest available) showed that there were 22.9 million small businesses.

While the small-business market is clearly a valuable target for banks, not every, small business owner is a target for every size bank. Larger banks like Wachovia, which has its headquarters in Charlotte, N.C., segment the small-business market into those with up to $3 million in revenue and those between $3 million and $20 million in revenue. Any business with more than $20 million in revenue falls into the commercial loans department. Nick Vaglio, vice president of marketing Wachovia's Atlantic region, says that small-business opportunities that are $3 million and under are generally handled at the branch level. Although he speaks from a "big bank" perspective, he readily admits Wachovia is competing against community banks for the small-business opportunities in his area. Wachovia has assets of $364 billion.

Susan Moore, president of the Women's Division and Small Business unit at $826 million Legacy Bank of Texas, Piano, Texas, says her bank defines small, business as anything with under $5 million in revenue. Moore says that, as a community bank, Legacy strives to be supportive to businesses of all size, from the single proprietor to a company with hundreds of employees. Her focus is chiefly on businesses with income between $800,000 and $1.2 million that are run by women.

Another bank in a small community in the East declined to be named but freely discussed the highly competitive environment the bank has to cope with when trying to secure small-business customers. "For our bank, a company with $1 million in sales or 50 to 100 employees would be huge," says the Eastern banker. "We work to win the business of everyone from the guy who plows driveways and owns two tracks to an established business with a premises and multiple employees," she said. "For our community the sole proprietor is the backbone of the community." And for this small bank, unannounced sales calls are a vital tactic in bringing in new customers.

What is an unannounced call?

Each of the three banks that ABA Bank Marketing talked to outlined a similar approach to the unannounced sales call. Each agreed that there is a distinction between cold calls and the unannounced sales call. A cold call implies the owner is not expecting the banker and probably has little or no knowledge of the bank. It could even mean...