The Bank and Credit Union Marketing Opportunity: Small and Home Office

This article originally appeared on CUGrow.com.

I enjoyed participating in the Digital Insight, Barlow Research and Banking.com Twitter Town Hall chat. The discussion revolved around findings from Barlow Research in the small and home office market. Below are some key tweets from the session along with insights from my perspective. I believe there is a big opportunity for credit unions to tap into the small and home office (SOHO) market segment. What if credit unions who currently engage the consumer market were to offer solutions for the SOHO market that not only provided financial services but also a community market place?

The SOHO business members could provide relevant offers to the consumer members as the credit union acts as a commerce conduit, providing financial services to both market segments. The success of this would be dependent on other factors, but imagine the possibilities of a credit union building a united community bringing together buyers and sellers. Another thought would be to target the Gen-Y SOHO segment and offer some kind of business incubator service. Imagine if your credit union were to hold bi-yearly SOHO contest allowing members to vote for the best business idea. How many leads could your credit union generate for loans and new accounts both from the consumer market as well as the SOHO market?

Like any new opportunity, let’s begin by first exploring the small and home office market segment itself. Market segmentation (watch the video) can be a way for your credit union to find new blue oceans in a digital economy.

What is the Small and Home Office (SOHO) Segment?

The small and home office segment could be defined as a business with less than $100,000 in annual sales revenue. According to the study, this segment is overlooked and ignored by almost every major bank.

 

 

 

Is there a way for credit unions to make money in this segment?

As credit unions focus on serving the underserved in the community segment, could they do the same for the SOHO segment? Is this even a viable market segment to focus on as a way to generate revenue through loans and accounts?

Will digital play an important role in the SOHO space? 

What if a credit union is focusing on Gen-Y growth right now?

If a credit union is currently targeting Gen-Y growth, the SOHO segment may complement these efforts nicely. Remember that bi-yearly SOHO contest mentioned above? Think about the number of leads, both from the consumer and SOHO markets, this could generate for a credit union.

What are other important things a credit union should consider?

As I have continued to repeat, operating in a digital economy will require credit unions to re-imagine their current business models and tear down internal silos. In addition to providing financial services, credit unions could build credibility with the SOHO market by providing relevant on-demand educational content and a digital community (similar to the OPEN Forum) along with complementary services.

What if credit unions who currently engage the consumer market were to offer a solution for the SOHO market that not only provided financial services but also a community market place?

The SOHO business members could provide relevant offers to the consumer members as the credit union acts as a commerce conduit providing financial services to both market segments. The success of this would be dependent on other factors but imagine the possibilities of a credit union building a united community bringing together buyers and sellers.

What happens if a credit union does not explore new market segments like SOHO?

As we are seeing on the consumer side of banking, non-traditional players will continue to disrupt the marketspace. The SOHO market could be an area to focus on for strategic change. If not, someone else may do just that. It’s only a matter of time.

Written by James Robert Lay