Aite Group Helps Small Businesses For Marketing Purposes

A new report from Aite Group presents a segmentation approach for financial institutions seeking to predict the needs and preferences of small businesses, allowing the institutions to best market to these businesses. The percentage of small businesses that are "extremely

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A new report from Aite Group presents a segmentation approach for financial institutions seeking to predict the needs and preferences of small businesses, allowing the institutions to best market to these businesses.

The percentage of small businesses that are “extremely satisfied” with their bank’s ability to understand their needs and recommend products is low, and declined from 2007 to 2009. Aite Group believes that a needs-based approach to segmenting small businesses (as opposed to a demographics-based approach) will allow financial institutions to best recommend appropriate products to address the needs of small businesses. Based on a July 2009 Aite Group survey of 283 small-business owners regarding their banking relationships, Aite Group has identified two dimensions that banks can use to effectively segment small businesses: 1) short-term funding need, and 2) importance of technology in the banking relationship.

“Today’s predominant approach to segmenting small businesses has not helped to increase small businesses’ satisfaction with their banks,” says Ron Shevlin, senior analyst with Aite Group and co-author of this report. “Aite Group’s four-segment approach to small businesses can guide banks’ marketing tactics. Banks should focus on communicating attractive loan terms, relationship managers, and technology pricing.”

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