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GRAPEVINE, Texas – Checking accounts, credit cards, vehicle loans and real estate/rental property funding – in that order – are the services business owners want most from their financial institution. But a credit union’s understanding of a business customer’s company and attention to his or her needs is the magnet that will attract and retain these members. “Eighty three percent of business customers want checking; 76 percent want a credit card; 73 percent want a vehicle loan and 69 percent want commercial real estate/rental property funding, but 100 percent of business customers want your attention,” said Bob Peterson of Cowart, Peterson & Associates, in a session addressing business services during Texas Credit Union League’s 71st Annual Meeting. “The biggest problem banks have with business customers is quality of service. Credit unions can fill that void.” Peterson’s objective was to reduce the fear factor for credit unions looking to provide business services. He provided his perspective on who these customers are, how they operate and the issues and problems they face. Several descriptors generally define credit union business customers, according to Peterson. They are usually small businesses, family owned, new enterprises and/or growth businesses. “They may be sole proprietorships, partnerships, corporations or `hybrids.’ Some operate out of offices in the home, some are franchisees, and some conduct business on-the-go from virtual offices that consist of a cell phone, laptop computer and other portable equipment.” Businesses have different needs, Peterson said, but the issues and problems they face are similar. Their biggest challenges are building financial strength, getting their business started, acquiring business skills (capital without business skills is no good), longevity and the need for information to fuel their success. How can credit unions assist these members? “Demonstrate that you want the business owner to be successful and that you are willing to help him or her with necessary tasks. If they can’t handle certain services within the business, you can handle them for a fee.” Opportunities for credit unions beyond the traditionally thought of business services include cash flow management, insurance services, accounting support, succession planning (70% of businesses fail after transferring ownership to the next family generation), financial planning, and business plan development. (See sidebar for a more detailed list). Understanding business members and meeting their needs has many rewards – adding new lines of business, fee generation, positioning for primary financial institution status, profitability and increased market share – but business services are not for everyone, Peterson said. “Credit unions should thoroughly understand what offering business services entails. If you don’t have someone with business lending knowledge on staff, go get someone or don’t do it.” “And you don’t have to provide every service,” he continued. “Consider what is compatible with your credit union’s philosophy and financial overhead.” How does a credit union differentiate itself from the financial institution down the street? Peterson gave the following tips: 1) Be professional, 2) Be brutally honest in your advice, 3) Be a partner, 4) Dare to be a non-conformist in solving your member’s problems, and 5) Admit your limits. “Your competitive advantage lies in quality, efficiency, innovation and customer responsiveness,” Peterson said. “Respond quickly, even if you have to tell them they have a bad idea.” -

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