Check deposits continue to drive branch traffic with 93 percent of surveyed SMBs making branch deposits. These statistics provide motivation to migrate these expensive branch transactions to self-service channels such as business mobile remote capture. Like consumer mobile, business mobile is deployed either by being integrated to an institution’s mobile app or as a stand-alone, single-function app. But unlike a consumer mobile application, business mobile application users can take advantage of more robust, configurable features and capture both checks and non-check items, like invoices or full page documents.
Financial institutions know that the SMB market is an important and profitable segment. In 2012, the census bureau’s small business survey found over 27 million small businesses in the US. Over 12 million of these businesses have annual revenues of $25,000 or more. Celent estimates the SMB business mobile market opportunity to be 4 million incremental SMBs.
While these facts and figures paint a clear picture of a lucrative SMB market opportunity, other pieces of information offer a more in-depth outlook.
Unboxing SMB market diversity
The SMB market is has a diverse mix of business models, including online, brick-and-mortar or both, in-person/service related such as plumbers and electricians, and a host of others. Viewing the market through a business model lens reveals stark contrasts in average daily check volumes. Brick-and-mortar businesses that also operate online receive more checks on an average day. Online-only businesses are, on average, smaller than businesses in other segments. So, even though their payment mix may be more check-heavy, their comparatively low annual revenue results in lower average daily check volume than other comparatively sized firms’ experience.
SMB’s varied affinity for mobile RDC adds another shade of gray, with significant usage varying between personal and business accounts. Twenty-five percent of surveyed SMBs use mobile RDC for business purposes while twice that many use mobile remote capture for their personal accounts. The smallest SMBs were the most likely to use mobile remote capture for both personal and business accounts, that was consistent with their higher utilization of mobile banking.
Although this research confirms that SMBs may have ambiguous attitudes towards a business mobile solution, there were plenty of other findings (you can read the whole report here) Celent used to conclude that successful entry and introduction of business mobile to the SMB market will hinge on product offering, positioning, and promotion tactics.
A diverse SMB market requires a diverse product offering. The only way banks can maximize the market opportunity is to create a product offering that supports both the SMBs that use mobile banking as well as those that do not. A two-tier product offering will provide cost-effective solution for SMBs with low average daily check volumes and a higher-priced solution for larger businesses having both desktop and mobile check acceptance.
Position accordingly. Business mobile RDC will excite SMB prospects if each product tier is positioned to uniquely fit the value proposition. An entry-level business mobile RDC product that has a no-fee option on a bank’s mobile banking app can attract most SMBs. SMBs with higher average daily check volumes are more likely to already use desktop deposit and are less likely to be enrolled in mobile banking. Clearly defined positioning can bolster banks’ ability to charge a monthly fee on the more advanced product, especially among larger SMBs as well as within commercial, middle market, and corporate market segments.
Promote it the right way. Instead of dividing prospects by annual revenue or business model, more success could be found by tailoring promotions and sales campaigns based on historical deposit behavior. Campaigns could be tailored for low-volume and high-volume depositors. When it comes to communication channels, email marketing as the centerpiece combined with some highly focused, direct sales efforts could be an effective way to execute campaigns. Why email marketing? We didn’t just pick the idea out of a hat. Research already exists that indicates the overwhelming majority of SMBs don’t speak with their bankers often, nor do they wish to. And if they do, it better be through email. If SMBs do hear from their banks, they would rather receive an email.
In addition to these strategies for success, this video provides three key, unifying solution capabilities that research indicates all SMBs, no matter what the industry would appreciate.