Usage of Personal Financial Products
Checking, Credit Cards, and Credit
Conversion Strategies

Key Finding from a Recent SYNERGISTICS Research Survey:

The 2013 survey Maximizing Small Business Financial Relationships revealed that less than a majority of small businesses reported having a dedicated account officer or relationship manager at their primary provider. To what extent do relationship managers handle both business and household matters for small business customers? How integral are relationship managers with regard to expanding small business relationships?

Highlights of the Study

This study examines the business and personal financial usage profile of small business owners.  It explores issues concerning the selection process for financial accounts and providers, cross-selling, relationship managers, and channel usage.

National Internet Survey – 600 owners/executives of small businesses with annual sales of $50K-$5M. Industry categories include manufacturing, wholesale, retail, and services.


Key Dates

November 26, 2014 – Charter fee/Intro pricing ends.
November 26, 2014 – Final acceptance of comments on questionnaire.
February 2015 – Project Report available.


Strategic Questions

  • What is the overall financial behavior profile of small businesses in terms of accounts and services usage and provider relationships?  To what extent do household relationships – such as for checking accounts, credit cards, and loans – impact business activity? How volatile is the small business market in terms of switching among financial providers?  Does this influence household relationships as well?
  • How extensive is provider overlap of business and household financial relationships among small business owners and executives?  For which specific types of providers and accounts or services does this overlap occur?  What are the perceived benefits of overlapping relationships?  Why do some businesses prefer not to have overlapping relationships?
  • How widespread is participation in relationship reward programs among small businesses? What is the perceived value of these programs encompassing both household and business accounts and services?  Would linked rewards be an incentive to encourage overlapping relationships?
  • Does a single relationship manager have an important role for overlapping household and business relationships?  Is there receptivity to cross-selling initiatives from relationship managers or other representatives for both business and household financial needs?
  • Is channel usage similar or different among small business owners/executives for dealing with business and household financial matters?  Can channel behavior be leveraged to expand and strengthen overlapping relationships?
  • Are financial advisory services another area in which financial institutions can establish and strengthen overlapping relationships with small business owners?  Do wealth management services – such  as tax minimization, special credit services, or succession planning – represent another avenue for expanding relationships?
  • Which segments of the small business market are the optimal targets for expanding both business and household financial relationships?  What characteristics – such as annual sales volume, industry, and number of employees – are important identifiers?


Research Issues

  • Not only are small businesses the growth engine of the economy, they are an extremely important market for financial services providers.  The small business market is large and provides opportunities related to the financial services needs of the business as well as those associated with the owner and employees.  These multiple opportunities contribute to the profitability of small business relationships while presenting complex challenges.
  • It has long been established that there are overlaps in provider relationships – with small business owners using the same provider for both the business and personal sides of the relationship.  Moving one step further, it becomes valuable to assess the cross-utilization of personal products and channels by small businesses.  Small businesses my require links between business and personal online services.  Personal credit cards are often used for business expenditures even though issuers promote business cards.  Home equity lines of credit can be used for initial startup expenses as well as other operational purposes.
  • The lines between business and personal activity are often blurred, making it difficult to know how to serve the small business customer.  This project will evaluate the personal financial behavior of small businesses.  It will assist providers in understanding the dynamics between personal and small business use of various products and channels. [F229]