When small businesses switch providers it’s a double whammy, according to a recent survey by SYNERGISTICS Research entitled, Small Business Relationship and Retention Strategies. Close to one-fifth of small business respondents in the survey say their company has switched providers in the past two years, which is a slight increase from one-tenth who reported this in a 2013 SYNERGISTICS survey. The top reasons for switching include having had a bad or unsatisfactory experience with the institution and to receive better customer service. In addition, most of those who switched say they also moved personal accounts and services when their company switched financial institutions.
Genie M. Driskill, COO of SYNERGISTICS, stated, “Small businesses can be valuable customers for financial institutions – offering the double benefit of business and household relationships. Provider switching activity among this segment has been fairly limited; however, trend data show that it has increased since 2013. Additionally, when switching occurs, it can have a significant impact. Most of those small businesses that switched providers also moved household accounts they had at the institution. Among those who switched, their key reasons involved bad experiences with an institution and, perhaps related, a desire for better customer service. It is imperative that providers focus on customer retention to guard their important small business relationships.”
These are among the findings from SYNERGISTICS study, Small Business Relationship and Retention Strategies, featuring online interviews with 600 owners and executives of small businesses with annual sales of $50K to $5M. Industry categories include manufacturing, wholesale, retail, and services. This study examines the business and personal financial needs of small business owners. It explores issues concerning cross-selling, relationship managers, provider competition, and relationship pricing and packages.