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Marketing Financial Services to Small Businesses - US - July 2014

Published By :

Mintel

Published Date : Jul 2014

Category :

Banking

No. of Pages : 147 Pages


The strengthening economy is paving the way for small business growth, both because loans are becoming more plentiful and consumers have become more willing to spend. Offering superior customer service and state-of-the-art technology will be crucial in financial services institutions’ efforts to take advantage of the growing strength of the sector and attract small business customers.
Table of Content

Scope and Themes

What you need to know
Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms

Executive Summary

The market
The target market: 28 million small businesses in the US
Figure 1: Employment size of employer and non-employer firms in US, 2011
Value of small business loans has fallen
Figure 2: Aggregate value of small business loans of less than $1 million, 2009-12
Alternative sources of lending are challenging the banks
Market drivers
Inflation
Figure 3: US Inflation rate January 2013-May 2014
Big banks are lending again
Figure 4: Small business loan approval rates by big banks, May 2013-May 2014
Companies and brands
Figure 5: Top 10 SBA 7(a) lenders 2013 ($1 million and under)
The consumer
Most small businesses are operated from the owner’s home
Figure 6: Business ownership, by annual revenues, April 2014
Opportunity to increase share of wallet through product bundling
Figure 7: Business banking products owned, April 2014
Greater dissatisfaction among micro businesses
Figure 8: Satisfaction with customer service, by annual revenues, April 2014
Greater investment needed in mobile technology
Figure 9: Satisfaction with primary bank’s mobile capabilities, by age, April 2014
What we think

Issues and Insights

Help your customers, help your bank?
Issues
Implications
How can banks increase business credit card usage?
Issues
Implications
Mobile apps for small businesses?
Issues
Implications

Trend Application

Trend: The Unfairer Sex
Trend: Entrepreneurial Spirit
Mintel Futures: Access Anything

Market Size

Key points
Size of the small business sector
Figure 10: Employment size of employer and non-employer firms in US, 2011
Three quarters of small businesses have a dedicated business checking account
Figure 11: Business banking products owned, by gender, April 2014
Lending is key to small business growth
Figure 12: Aggregate value of small business loans of less than $1 million, 2009-12
Figure 13: Top 10 SBA 7(a) lenders 2013 ($1 million and under)

Market Drivers

Key points
The US economy has not yet fully rebounded
Unemployment
Figure 14: US Unemployment rate, May 2009-May2014
Inflation
Figure 15: US Inflation rate January 2013-May 2014
Legislation affecting small businesses
ACA
Minimum wage legislation
Small business loan approval rates by big banks are on the rise
Figure 16: Small business loan approval rates, May 2013-May 2014
Small business optimism is increasing
Figure 17: NFIB Small Business Optimism index, January 2009-May 2014
A third of small business owners say their finances have improved
Figure 18: Attitudes toward own business finances, April2014

Competitive Context

Key points
Alternative lenders on the rise
Peer-to-peer lending

Innovations and Innovators

Key points
SmartBiz
Square offers loans
PNC upgrades its digital tools for small business
New developments in mobile apps for small businesses

Marketing Strategies

Key points
Overview
Brand analysis: Wells Fargo
Figure 19: Brand analysis of Wells Fargo, 2014
Online
Online ads
Figure 20: Wells Fargo Works online ad, 2014
Figure 21: Wells Fargo Works online ad, 2014
Figure 22: Wells Fargo small business in Charlotte, N.C., online ad, 2013
Social media
Figure 23: Wells Fargo Works video, 2014
Direct mail
Figure 24: Wells Fargo Business Services Packages Checking Account, 2014
Figure 25: Wells Fargo business credit card ad, 2014
Brand analysis: Bank of America
Figure 26: Brand analysis of Bank of America, 2014
Online
Social media
YouTube
Figure 27: Bank of America Alex and Ani video, 2014
Direct mail
Figure 28: Bank of America business rewards credit card direct mail ad, 2014
Figure 29: Bank of America remote deposit direct mail ad, 2014
Figure 30: Bank of America account management tools direct mail ad, 2014
Brand analysis: JPMorgan Chase
Figure 31: Brand Analysis, Chase, 2014
Online
YouTube
Figure 32: Chase Platinum Business Banking video, 2014
Mobile
Figure 33: Chase Sponsor of National Small Business Week mobile ad, 2014
Figure 34: Chase Ink mobile ad, 2013
Direct mail
Figure 35: Chase Platinum Business Checking account direct mail ad, 2014
Print
Figure 36: Chase Ink card print ad, 2014
Alternative lenders
OnDeck
Figure 37: OnDeck small business loan direct mail ad, 2014
Figure 38: OnDeck small business loan mobile ad, 2014
Figure 39: OnDeck small business loans online ad, 2014
Swift Capital
Figure 40: Swift Capital small business loan direct mail ad, 2014

Who are the Business Owners?

Key points
Most businesses operate from home
Figure 41: Business ownership, by gender and age, April 2014
The large majority of smaller firms are run from home
Figure 42: Business ownership, by annual revenues, April 2014
Nine in 10 sole operators work from home
Figure 43: Business ownership, by number of employees, April 2014

How Many Employees Do They Have?

Key points
Most small business owners employ only themselves
Figure 44: Number of paid employees, by gender, April 2014
Opportunity for banks to support post-retirement entrepreneurs
Figure 45: Number of paid employees, by age, April 2014
Midsized businesses may need support from insurance agents
Figure 46: Number of paid employees, by annual revenues, April 2014
Nine in 10 home-operated businesses have fewer than five employees
Figure 47: Number of paid employees, by operation at home/outside, April 2014

How Much Revenue Do They Earn?

Key points
Women-owned businesses tend to generate less revenue
Figure 48: Annual revenue, by gender, April 2014
Relatively few over-65s own larger “small” businesses
Figure 49: Annual revenue, by age, April 2014
Strong link between employees and turnover
Figure 50: Annual revenue, by number of employees, April 2014
Figure 51: Number of paid employees, by operation at home/outside, April 2014

Company Industry

Key points
Professional services most popular industry
Figure 52: Company industry, by gender, April 2014
Professional service firms dominate regardless of company size
Figure 53: Company industry, by annual revenues, April 2014

How Companies Pay for Purchases

Key points
Rent and/or utilities
Figure 54: How companies pay for rent and/or utilities, by gender, April 2014
Figure 55: How companies pay for rent and/or utilities, by age, April 2014
Greater professionalism among larger business owners
Figure 56: How companies pay for rent and/or utilities, by annual revenues, April 2014
Figure 57: How companies pay for rent and/or utilities, by number of employees, April 2014
Figure 58: How companies pay for rent and/or utilities, by operation from home or outside, April 2014
Day-to-day supplies
Figure 59: How companies pay for day-to-day supplies, by gender, April 2014
Figure 60: How companies pay for day-to-day supplies, by age, April 2014
A chance to use retailer loyalty programs to build partnerships with smaller businesses
Figure 61: How companies pay for day-to-day supplies, by annual revenues, April 2014
Figure 62: How companies pay for day-to-day supplies, by operation from home/outside, April 2014
Major purchases
Figure 63: How companies pay for major purchases (over $1,000), by gender, April 2014
Older business owners more likely to pay with a personal credit card
Figure 64: How companies pay for major purchases (over $1,000), by age, April 2014
Figure 65: How companies pay for major purchases (over $1,000), by annual revenues, April 2014
Figure 66: How companies pay for major purchases (over $1,000), by operation from home/outside, April 2014

How Owners Fund Their Businesses

Key points
Startup funding
Figure 67: Method of funding startup, by gender, April 2014
Younger business owners more likely to look to family for support
Figure 68: Method of funding startup, by age, April 2014
Loans key to funding larger startups
Figure 69: Method of funding startup, by annual revenues, April 2014
Funding growth
Figure 70: Method of funding growth, by gender, April 2014
Figure 71: Method of funding growth, by age, April 2014
Larger firms have outgrown informal funding sources
Figure 72: Method of funding growth, by annual revenues, April 2014
Figure 73: Method of funding growth, by number of employees, April 2014

Attitudes Toward Own Business Finances

Key points
Customer satisfaction is low, but many are optimistic
Figure 74: Attitudes toward own business finances, by gender, April 2014
Figure 75: Attitudes toward own business finances, by age, April 2014
Larger businesses are significantly more optimistic
Figure 76: Attitudes toward own business finances, by annual revenues, April 2014
Size adds to a business’s banking requirements
Figure 77: Attitudes toward own business finances, by operation from home/outside, April 2014

Business Banking Products and Services

Key points
Most have at least a business checking account
Figure 78: Business banking products owned, by gender, April 2014
Younger business owners need to invest in their retirement, not just their business
Figure 79: Business banking products owned, by age, April 2014
There is room for a “starter” business account
Figure 80: Business banking products owned, by annual revenues, April 2014
Additional staff adds complexity to banking requirements
Figure 81: Business banking products owned, by number of employees, April 2014
Figure 82: Business banking products owned, by operation from home/outside, April 2014

Mobile Device Ownership

Key points
Mobile device ownership is prevalent among small business owners
Figure 83: Mobile device ownership, by gender, April 2014
Figure 84: Mobile device ownership, by age, April 2014
Figure 85: Mobile device ownership, by annual revenues, April 2014

Usage of and Satisfaction with Mobile Banking

Key points
Mobile banking usage is very low
Figure 86: Mobile business banking usage, by gender, April 2014

Appendix – Other Useful Consumer Tables

Company industry
Figure 87: Company industry, by age, April 2014
Figure 88: Company industry, by number of employees, April 2014
Figure 89: Company industry, by operation from home/outside, April 2014
How companies pay for purchases
Day-to-day supplies
Figure 90: Method of purchase payment for day-to-day supplies, by number of employees, April 2014
Major purchases
Figure 91: How companies pay for major purchases (over $1,000), by number of employees, April 2014
How owners fund their business
Startup
Figure 92: Method of funding startup, by number of employees, April 2014
Figure 93: Method of funding startup, by operation from home/outside, April 2014
Growth
Figure 94: Method of funding growth, by operation from home/outside, April 2014
Attitudes toward business/finances
Figure 95: Attitudes toward own business finances, by number of employees, April 2014
Mobile device ownership
Figure 96: Mobile business banking usage, by number of employees, April 2014
Figure 97: Mobile business banking usage, by operation from home/outside, April 2014
Usage of and satisfaction with mobile banking
Figure 98: Usage of and satisfaction with mobile business banking, by age, April 2014
Figure 99: Usage of and satisfaction with mobile business banking, by annual revenue, April 2014
Figure 100: Usage of and satisfaction with mobile business banking, by number of employees, April 2014
Figure 101: Usage of and satisfaction with mobile business banking, by operation from home/outside, April 2014

Appendix – Trade Associations

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