Twenty years ago, if a business needed a line of credit to expand or even get started, it went to the nearest commercial bank and applied for a loan. In general, the bank was involved in the process until the loan was either granted or denied. Today, commercial banks are more involved in the entire process of providing funding for businesses.
“Our group is designed to let business owners know that they have someone they can call on who knows what they do and understands their business,” says Michelle Gupton, vice president senior business banking relationship manager for Wells Fargo Bank. “They need to know that the bank isn’t just trying to push products and services but also trying to find a way to tailor a program that will fit the company.”
Smart Business talked to Gupton about the importance of finding the right commercial bank.
What is relationship banking?
We look for external relationships that complement our internal partnerships. Internal partners would be the treasury management team, the wealth management team, our branches and our private client service mortgage group. The teams are built around the personal needs of the client. I have established sources and a rapport with each internal partner so that I know what service or product they are able to provide.
The key to developing external relationships is to be active in the community. I have been successful at developing relationships with CPAs, real estate attorneys, title companies and commercial real estate brokers by being involved with different community activities as well as joining different organizations. The same philosophy applies to establishing internal partners and nurturing external relationships. It is important for you to know what value each party can bring to your client. It gets back to ‘knowing your customer’ and ‘knowing your partners’ so that you can make the right fit. For example, I had a client who had leased his office space for many years, then decided to look for a facility that he could purchase. However, he did not have the time to take away from his business to look for the property, so I introduced him to a commercial broker, who did all the work. The customer was extremely happy to be investing in a property he owned versus renting, and all the negotiations were handled by the broker. It was a perfect fit for all. Developing strong relationships outside of the internal partnerships ensures a steady stream of new business, and the best compliment is a referral.
How has a commercial bank’s role changed in the last 20 years?
It’s changed a lot just for the fact that with commercial banking today, we have so many more products and services that we can offer to our clients. The industry as a whole has moved from being a transaction bank to a relationship bank in order to encourage competition amongst all of the banks. It has changed what is required by the banks to stay competitive. We now offer everything from lending money to depositing money to investments, insurance products and hedging fuel prices and offering 401(k) packages for different companies.
Does the amount of money available for investment determine a client’s eligibility?
In our private client service group there are individuals that focus on clients that have less than $1 million in net liquid assets. Another group focuses on clients with more than $1 million in liquid assets. Still another may focus on individuals with $50,000 in liquid assets. Each business owner may want to open a line of credit or invest his or her personal assets, but the owner’s needs and resources are all different and each requires its own partnership group.
It’s important to uncover the needs of a client and put him or her with the right partner. Because if I put clients in the wrong groups, it gives them the wrong perception of what we can do for them as their commercial bank. If we put the client in the wrong group, it might make the client with $50,000 believe he or she is not as valuable as the one with more than $1 million in liquid assets. And that is simply not true. Our philosophy is if we already have the client’s business account, personal account, maybe a home or car loan and some investments and the client is happy with our service, that customer is more likely to stay with us when it comes time for other commercial banking needs. Clients want a commercial banker who will take the time to get to know their business.
MICHELLE GUPTON is vice president senior business banking relationship manager for Wells Fargo Bank. Reach her at (713) 963-9556 or Michelle.L.Gupton@wellsfargo.com.