Small Business, Big DealJeff Nolan |
I always believed this to be true, but just to be sure I went and checked the numbers. The politicians are right. According to the U.S. Small Business Administration, in 2010 there were 27.3 million small businesses in the United States, accounting for over 99 percent of all firms and employing approximately half all private sector workers.
MasterCard Advisors recently surveyed over 5,000 small business owners in the United States via its proprietary Comparative Cardholder Dynamics (CCD) panel. I recently had the opportunity to review the results of our latest survey. A few key insights caught my eye.
Small business owners are not overly satisfied with the banks issuing their business cards. In 2011, only 36 percent of them indicated that they were extremely satisfied with their banks. While this is up slightly from 2010, it is below 2009’s satisfaction level, and well below consumer credit cardholder satisfaction, rates, which run 15 to 20 percentage points higher.
This lack of satisfaction motivates business owners to shop for alternatives. Twelve percent of business card holders applied for and received a card from an issuer competing with their current suppliers, representing a 50 percent increase in card churn over the prior year.
Source: MasterCard Advisors, Comparative Cardholder Dynamics, Small Business Survey, 2011
Now, the loss of one small business account won’t break the bank. But issuers need to see both the micro and the macro. Churn is just that—repetitive motion. Any issuer wishing to grow in this environment needs to recognize the opportunity in the macro by paying attention to customer satisfaction in the micro.