Smaller banks go for the personal touch

By Leah Garris, correspondent

With big banks that can offer myriad services and legions of back-office corporate staff, smaller community banks have learned it comes down to more than just great customer service to hold on to clients.

“We don't do massive amounts of marketing,” says David Ryan, CEO and president at Mount Vernon Bank & Trust Co. “There's no way we can compete with an ING Orange account or with Wells Fargo's marketing.”

What his bank can do, however, is focus on building relationships.

In a small community such as Mount Vernon, word about new residents travels fast. When Ryan and his staff find out there's a new professor at Cornell College or a new manager at a local store, for example, they make it a point to connect so they can introduce themselves.

They explain Mount Vernon Bank & Trust's services and talk about the bank's history. Established in 1884, the bank is one of the oldest businesses in the Corridor.

Its one location is on Main Street and has some two dozen employees who manage 6,000 deposit accounts and 1,200 loans.

“If there's a new business in town, or if there's a business that's expanding, we want to be talking with those folks,” Ryan said. “We have people on staff specifically to reach out to them, whether it's via phone call, email or personal visit.”

He also capitalizes on local referrals. When customers ask bank employees whom they'd recommend for hardware or plumbing - which happens pretty often, Ryan said - staffers refer them to other bank clients who provide those services.

“Those customers do the same for us in return, and it really pays off,” Ryan noted.

BankIowa counts on referrals, too, but in a slightly different way.

Every month, Rob Robinson, CEO and president, asks business clients to set up a display in the bank lobby, with brochures, giveaway items, business cards and the like.

In turn, BankIowa exhibits its own information in that customer's lobby. It's a free opportunity for both businesses to gain exposure.

Focusing on existing customers is smart for banks of any size, but it's especially important for smaller banks. BankIowa - boasting 11 locations with 125 full-time employees managing 20,000 customers - makes sure existing clients know about every service available so they don't go elsewhere, Robinson said.

“We try to get as much business as we can with one client,” he said. “We have more of a rifle approach to our marketing than a shotgun approach.”

Most small local banks name flexibility and speed as benefits they can offer when contrasted with their larger brethren.

“From our tellers clear up to the president, we're all located here, so all our decisions are made here. If I need to make a decision, for example, I can literally make it on the spot. I don't have to call a corporate office,” said Brian Middendorf, CEO and president of Hiawatha Bank & Trust Co., which has between 1,500 and 2,000 customers managed among 12 staff members.

“We make it a point to have very quick turnaround. For some commercial customers who bank with a national bank, it could be a 14-day process to get an answer.”

And sometimes it's the small things that make a difference.

“Some people like a Cheers atmosphere - they like their name to be called out as they walk in,” Ryan said.

“But some people don't like it, and some people don't want that. You have to know your customers and understand what they want.”

Another technique smaller banks use involves mingling with employees of a current business customer.

“We'll go out and hold a barbecue, throw some lunch on the grill and introduce ourselves to the business customer's employees,” Robinson said.

He takes along promotional kits and special offers for attendees who sign up for personal banking.

To stand out, smaller community banks also try to offer more leeway with customers.

“We don't have set products that we try to shove our customers into,” Robinson explained. “We can be flexible and say, ‘This might not work for you as it stands right now, but let's see if we can tweak it to make it work.'”

For example, when it comes to loans, BankIowa works with customers on the frequency and size of payments. It also can negotiate issues such as rate changes.

Robinson has a philosophy when it comes to local banks donating time and resources to local events: “We're only going to be as successful as the communities we're in.”

Volunteering is a great way to show support to customers, but also to network with potential customers.

Ryan follows a similar thought process - Mount Vernon Bank & Trust puts on a community safety fair for children every year, and his staff is involved with Mount Vernon's Heritage Days.

It's good press for the bank and a good way to show customers throughout the community that the bank supports local businesses and families.