Small Business Loans: Stay in Touch with Your Portfolio

Lana J. Chandler
November 7, 2011 | COMMENTS

“Staying in touch with your business clients means having regular contact—phone calls, site visits, handwritten notes, and personalized letters,” explains Patti Alexander, founder and CEO of Alexander Loan Review & Consulting, LLC in Charleston, West Virginia. “Don’t wait for the client to come into the branch or call with a request or a question. Actually visiting with your client at their place of business shows that you care about your client’s welfare.”

Maintaining regular contact with your business clients benefits both the financial institution and the client. Alexander cites the following paybacks:

• Breeds loyalty as personalized touches—site visits, sending articles of interest, invitations to seminars, etc.—help you cultivate relationships. Contact, particularly if you’re not trying to sell something, makes clients feel valued—that you see them as more than just an account number and revenue stream.

• Wards off competitive offers as you and your institution are more top-of-mind with the client. Contact opportunities such as sharing industry information or invitations to free webinars add value to the relationship, making the competition less attractive.

• Serves as an early warning system for problems on loans or with deposit accounts; contact gives clients an opportunity to easily voice any concerns or questions.

• Increases your awareness of the client’s situation so that you can give consideration to other products and services that can benefit your client in a more personalized manner. Knowing your client’s situation can also help you put together a workout plan while there is still a good opportunity to help both the financial institution and the client,” says Alexander.

Get to Know Your Client

“I believe in consultative selling, and you have to know your client for this to be effective. Using as many opportunities as possible to get to know your client by seeing them in different places, for instance, gives you a basis not only for conversation, but also for learning about the client’s life situation,” Alexander says. “When you are ready to talk intelligently to your client about their situation, make contact and be very upfront about the reason for your call. You want to be able to talk very honestly about the benefits of this product to your client—not just make the sales pitch of the week.”
Once you build loyalty, trust is the most important factor in an ongoing and successful business relationship. If your client feels that you have their best interests at heart, they will be less likely to approach these “sales” conversations with suspicion.

The Convenience Factor

While contact opportunities span the gamut from cards to invitations to sharing articles of value, take the initiative to schedule one-on-one meetings periodically. “Typically, if a small business client is meeting with their banker, they are not operating their business which translates to a loss of income. Meeting your small business client at their place goes a long way to proving your sincere interest in your client’s well being,” Alexander says. “A successful small business client will be one of the busiest people you know. Exhibiting that you understand the owner’s time constraints is an excellent step in strengthening the relationship.”

Meeting at your client’s place of business also helps to keep you apprised of the business’ condition. As the business grows, the banking relationship may become more complex with possible needs for retirement plans, payroll services, ACH capabilities, online banking and bill pay, business savings plans and other lending opportunities. Staying in touch with your small business client helps you anticipate future needs.

“You are better prepared to help the client with new products and services as needs emerge, even if the client hasn’t recognized the need,” Alexander says. “Being sincerely proactive with the obvious attitude of helping ease growing pains is recognized and appreciated by small business clients. These clients will talk about their banker every chance they get in any forum—you want to make sure the talk is good!”

Loyalty and Trust

Loyalty and trust—two essentials for a financial institution’s survival—have suffered extreme blows in this economic downturn. “Reputations are bruised and, in some cases, ruined,” Alexander says. “Making the effort to sincerely know your client is the first step in regaining your client’s trust and establishing loyalty.”

Regular contact with your client provides opportunities to discover the person and build rapport, a crucial step in growing relationships. Knowing your client’s life style, life stage, and life situation helps you work intelligently with them to improve their situation. A good step toward forging a strong and committed business relationship is a well thought out and knowledgeable recommendation or explanation of a product or service that exhibits a sincere interest in your client’s present and long-term financial condition.

Formalize Your Notes

After you visit with a client, make sure you formalize your notes regarding the discussion. “In the case of small business clients or loan clients, these formalized notes can take the form of a Client Call Report. The latter is also a good indicator to management and regulators that you are keeping in touch with your clients and your community,” Alexander says. “In the future when you are required to justify a ‘community expenditure’—any type of support provided to the community such as sports team sponsorships, county fair booths, donations, etc.—your knowledge of your community and its needs will carry a lot of weight.”

Contact Alexander at Patti@AlexanderLoanReview.com. This story appeared in Branch Manager’s Letter at www.branchmanagersletter.com and is reprinted with permission. Contact publisher Lana J. Chandler at 304-343-0206 or Lana@BranchManagersLetter.com.