Adventures in Small Business Banking

In an effort to consolidate and grow my businesses, our shareholders made the decision to pull up the stakes of our satellite offices and to re-locate everything to the New York City area—Hoboken, to be concise. Amid the discussions with lawyers, attorneys, shareholders, clients, employees and contractors, one of the tasks at hand was re-evaluating our banking situation.

When the company first surfaced in 2001, we had the intention of providing payroll to the engagement managers and fulltime employees and then sending wires or direct deposits to each contractor in the network. Our first choice was Fleet, which was bought by Bank One in 1999 and slowly became its successor in 2002-03 (and then Bank of America in 2004). We moved to Chase, as they have branches in cities of our satellite offices and this made it easier to provide direct deposits to employees all over the globe. The decision was made out of necessity and mediocre benefit before due diligence was executed and, though Chase treated us well, they treated our pocketbooks like a large business.

The consolidation that is now underway brought back the opportunity to rethink some of our initial decisions to see what was best for the company. Armed by seven new years of experience in small business management, I approached almost all the banks in Hoboken and did my own due diligence.

When setting up a small business checking account, there are a number of different facets to consider (as we had in 2001 with the Fleet and Chase issues). What services will this bank provide that will assist my business? Are their fees worth the benefits? How convenient is the location and online access? How have their staff seemed when an issue arose? Ultimately, the number one question we asked is “Will this bank be the best fit for our small business?”

Business checking accounts have a number of fees associated with them. Existing the world of personal banking, financial institutions feel that businesses = money = tolerance. Business people can’t be bothered with haggling over late, processing or finance fees. Business people don’t need incentives for banking as they’ll consider this to be a necessary cost of doing business.

Mike and I have oftentimes thought that customer service in this country has slipped because of such tolerance and that when people accept disagreeable situations and unfair business stipulations imposed on them, it’s merely adding to the problem.

So my first step was considering the helpfulness, interest and knowledgeability of the staff. I surveyed the lines on a Friday at lunchtime and at the end of the business day, which are what I discern are a bank’s busiest times. I spoke with the tellers and personnel and made note of their understanding of questions, requests for inquiry repetition, willingness to assist and demeanor. I analyzed other interactions with clients and customers like myself and the tone of the room. I grabbed their literature and looked at their hours.

Some of the banks I visited were, in random order: North Fork, Valley National, Commerce Bank, Chase, PNC, Wachovia and Sovereign / Santander.

Chase informed me that they had no literature with pricing on it and recommended that I speak with their Assistant Vice President Business Banker. North Fork pointed me to a seat, though I witnessed their business bankers on the phone and checking emails. My first reaction was that these people should put their customers first and have protocol in place for ensuring prospective client satisfaction. As this is what my business attempts to do every day, I was surprised to see larger institutions oblivious to such a basic business principle: Customer Focus. The folks at Wachovia didn’t know who I should talk to and recommended that I come back on Monday morning. “Oh, our business managers are probably gone for the day,” they said, without checking to see if anyone could help me. I looked at my watch and noticed it was 2:15pm.

The line at PNC was short, but, as the tellers didn’t seem to capable, each person moved forward at a snail’s pace. No one was smiling and, though the atmosphere was light and friendly, it seemed a thin mask for the branch’s actual demeanor. When finally a teller turned their attention to me, my questions were all unanswerable to him. In frustration, I walked over to a computer kiosk, clicked through their site, and printed 15 pages of small business offerings that PNC had available to the public. As a primarily internet-based business, I knew I could probably find the answers to my questions on their site, from home, but my journey wasn’t so much based on getting the answers as it was in the way I was to receive them. To be nice, I printed an extra copy for the teller and recommended he read it.

Sovereign / Santander provided me with, what I thought was the quintessential bank’s personality when dealing with small business customers. “How much does this cost?”, I asked. “It depends,” he said. “Depends on what?” “Depends on how much money you have in your bank account.” The mentality that a bank would charge me more money on some things if I had less money in my account and less money on other things if I had more money in my account was laughable to me. Now, I understand that banks make concessions and decisions based on customer profitability, but this is a perfect example of how tolerance has glided the customer service train off the tracks.

“Let me get this straight,” I said. “If I have $X in my Small Business checking account, you’ll charge me $Y in monthly service and banking fees, but if I have $10X in the account, some fees will be $.5Y, but other fees will be $2Y?”

“Yes. You own a business. You know how it works,” he said.

The banking manager printed out some terms for me, which he and I both noticed were last updated in November 2006, and recommended that I take the paperwork to open up the accounts with me that day. I told him I’d rather save the tree.

On my way out, the sky opened up and it began to pour on Hoboken. My trust and appreciation for the banking industry felt as cold and permeating as the thunder storm, so I turned around and asked the all-too-eager banking manager for an umbrella.

“Where am I going to get that?” he asked. I eyeballed his in the corner and he said he’d be leaving in an hour and would probably need it. I glanced at the promotional merchandise and he said it was serendipitous that I came that day and that it was raining. “We give umbrellas to all new customers that have just opened accounts.”

I left there and walked a half-block to Commerce Bank. I was thoroughly soaked in two minutes and the teller there immediately got up from her chair, ran to the back and emerged seconds later with a stack of Commerce Bank napkins.

“Wow, it’s really coming down,” she said. She ushered me to a chair and asked if I wanted anything else. She gave me materials, which I looked over, and asked if I had a far walk to shelter from the storm. When I told her it was about a mile, she went to the back and found an extra, forgotten umbrella.

I’d really wished, at that point, that their fees were lower. I wished that this bank shared in customer appreciation what their teller shared in generosity and concern that day. Unfortunately, they only shared Sovereign / Santander’s policies on how they justified charging what they were charging.

My final stop for the day was Valley National and I wasn’t feeling too positive. A clerk saw me nosing around their printed literature after a few minutes and sauntered up.

“I’d like information on policies and the fees structure for a Small Business checking account,” I said. She handed me a personal loan brochure. I just stared at her.

Luckily, the manager came up at this point, as I was close the breaking into a diatribe on listening to and appeasing customer inquiries. He ushered me to his office and printed out a bunch of literature. I scanned it and said “how much is this?” He said he’d waive it. “How much is this?” “Waived.”  “So it’s going to cost me?” “Nothing,” he said.

“Look,” he said, “my job here is to get you to choose our bank and stay with our bank. The truth is that we make more money on small business companies than any other. We’re a smaller bank, so we don’t get the big corporations. Personal banking is normally minimal profit, so we need a bunch of people to equate to one small business.”

“Why are you telling me this?”

“If you invest in our bank,” he said, “we’ll make money on your money. The longer you stay with us, the more money you earn, the more money we make on you.” His syllogism, essentially, was this: The happier you are, the richer we are. “You seem like a smart business person. You’re running your own company and obviously doing a lot of legwork on bank selection. If you’re unwilling to pay this charge, and don’t want to be subjected to this fee…fine.”

I went home that day and spoke with friends, clients and my coworkers and the choice was unanimous. A client in the financial industry shared the advice that you never want to have a small business bank with a big corporation because they don’t care about your satisfaction and charge a lot for little things. My day had proven that he was right. My employees, coworkers and friends shared stories of issues they’ve had with their banks and shook their heads at the fact that the customer service they’d received, the fees they’d been charged, the policies they were subjected to, and the way they were treated was beyond tolerable.

Dear readers, Don’t stand for it anymore. Tell them what you expect and don’t yield when they backpedal about rules and regulations. If you call customer service, elevate the call until someone cares. Write letters. Write blogs. Learn the system and tell others. If we continue to accept this type of service, continue to tolerate the low standards that have made corporations richer and customers frustrated, jaded and broke, it’ll keep gliding off the tracks.

That’s something we can all bank on.

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