Series 1 | Opening an Business Account

Why leave one bank for another?

What makes someone close their business account at one financial institution so that they can open an account at a different institution? Pay close attention to the many forces at play that, taken together, may influence a customer to find something better.

Autobooks Guide to Demand Banking

How to see banking through the eyes of a small business owner

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Hear what small business owners have to say:

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Hear what industry leaders have to say:

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Note: Some clips have been edited for length and clarity.

Carmeisha

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Full Interview — Carmeisha 58:24

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Our first interview tells the story of Carmeisha. She is a gifted dessert maker, and has been making and selling banana pudding, cakes, and other tasty treats since 2015. In the summer of 2017, she realized that her burgeoning business would require a business account, fast. Why? And why did she decide on an institution where she was not currently banking? We spoke with her to learn more.

Carmeisha started her story by telling us about her business. Her passion is making banana pudding, and her friends and family agreed that it was the best. She began by selling to loved ones and soon branched out to Facebook connections.

Word began to spread about her delicious offerings and in Thanksgiving of 2017, Carmeisha looked over her very crowded kitchen table full of orders and thought to herself, “I need a business account.” This realization set off a chain of events that would eventually land her with a different bank than where she started — and it took her three years to get there.

What specific forces influenced Carmeisha to find a much bigger institution than where she was currently banking? What solutions did this other institution offer, especially when it came to technology? And why did it take her several years to find it?

Episode 1-1 Carmeisha | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Clearly, Carmeisha had no issues peddling her pudding, but she still wasn’t sure if she was turning a profit: “I was making the money, but I felt like I wasn’t really seeing the money.” This is when she decided that she needed to “get organized.” There was another important anxiety at work here too: her pricing. Was Carmeisha charging her customers enough to maintain a healthy bottom line?

Takeaway As an institution, share success stories that resonate with small business owners. Focus less on your account features (most of which are undifferentiated). Instead, focus more on how your financial institution understands business customer needs and is ready to help along the way.

Episode 1-2 Carmeisha | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Two years after starting, Carmeisha opened a business account at the same credit union where she was handling her personal account. As she had intended, she now had a separate account from which to pay for supplies and other expenses. Her business also grew significantly during this period. Nevertheless, Carmeisha still wasn’t sure if she was turning enough of a profit. The possible culprit? Pricing.

“I'm spending this amount on [supplies]. This is what I'm making. And it was just a lot going on. So, I'm like, you know what? Let me come back and then reorganize my pricing. So that was the big issue for me.” Carmeisha did eventually raise her pricing to match competitors more closely. However, it was also becoming clear that her account was just not keeping up with her needs.

Takeaway

Be proactive in educating customers about ways that they can grow their small business and tell customer success stories. This might be a good way to counter bigger FIs that offer more diverse capabilities.

Episode 1-3 Carmeisha | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Fast forward to 2017, on the Fourth of July. Carmeisha receives a mailer from Chase promoting a new incentive: $300 credit for opening a business account. “I could use that extra money,” she thought.

Takeaway

Don’t hold back when it comes to promotions and marketing campaigns. Third-party apps and big banks are very consistent in this regard.

Episode 1-4 Carmeisha | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Carmeisha also discovered another feature available in the Chase app: the ability to take card payments from customers. This feature, she told us, “was the main thing” that drew her in. Interestingly, she had also paid for a similar service with her previous account at the credit union, but it had never worked to her expectations.

Takeaways

If a service doesn’t work out for a customer, follow up. Figure out ways to still serve that customer to create trust and retention long term.

Think about ways to upsell and cross-sell to create account stickiness. Don’t make it easy for a customer/member to close account and/or leave your institution.

Janice

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Full Interview — Janice 51:46

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Our second interview is the story of Janice. She has been a consultant since 2013, helping introverts to become better at networking. In March of 2020, she moved to the US. Since arriving, she has closed two business accounts, and opened a new one. Why? We chatted with Janice to uncover her story.

Janice began by providing some background on her move: she entered the US at the start of the pandemic, making it difficult for her to establish her legal residency, much less her new bank accounts. Although Janice emigrated from Mexico, she had long held a business account in the UK with HSBC.

Janice closed her HSBC account as soon as she arrived. After an intense period of research, she settled on a new US-based bank for her business, but then promptly closed that account just a year later. She finally settled on a new bank, Chase, where she opened both a business and a personal account — and has been baking there ever since.

What specific forces drove Janice to change banks, twice? What solutions did the new bank offer, especially in comparison to the old bank? What forces pushed Janice to make a decision? And did any anxieties play a role?

Episode 2-1 Janice | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Initially, Janice did not have an easy time opening a new business account. Because she was new to the US, this made it “incredibly difficult” to open an account.

Takeaway Business owners often desire to open both personal and business accounts at the same financial institution. Financial institutions should look for ways to both cross-promote personal accounts for business owners and leverage business account owner data to reduce friction in opening a personal account.

Episode 2-2 Janice | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Although Janice could have continued with her current arrangement, she felt an urgency to close her HSBC account. If she had chosen to continue operating out of a UK account, she would have been forced to pay taxes to both the UK and now the US!

Takeaways

Think about ways to bundle personal and business accounts to make it easier for an applicant to apply for both at once.

Be aware of taxes and their deadlines; time marketing pushes to coincide with these ongoing, annual events (especially for small businesses).

Episode 2-3 Janice | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Another wrinkle to Janice’s story soon came to light. Because Janice is a prolific world traveler, she worried about fraud. She felt that her bank should provide robust protection related to her account, such as through real-time alerts.

Takeaways

Regarding app notifications and alerts, institutions should make explicit what type of alerts can be set up, and ensure that it’s easy to do so.

Episode 2-4 Janice | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

The other force that attracted her to Chase, beyond the account security, has to do with her phone being registered in Mexico. Janice discovered after some research in the Google Play store, that out of her three front-runners (Chase, Capital One, and another bank), only the Chase app would be available to her (despite her phone not being registered in the US).

Takeaways

Be sure that your app description inside the App store/Play store provide sufficient information; mention available alerts here too.

Darius

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Full Interview — Darius 60:35

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Our third interview tells the story of Darius. He and his wife were inspired to purchase a portable photo booth after renting one for their daughter’s graduation. This experiment quickly grew profitable as they began to book events for friends and family. Just a year later, in 2016, they decided that their side hustle would require a business account.

Darius began his story by describing their early success. In just a few months, they went from side hustle to full-blown business. But they realized that the best way to continue to grow was to gain a clearer “vision” of their finances.

What specific forces drove Darius and his wife to settle on the first bank, only to change banks just a few years later? What solutions did the new bank offer, especially in comparison to the old bank? And did any anxieties play a role in their decision making?

Episode 3-1 Darius | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Initially, Darius and his wife decided that Chase would become their bank. They already banked there, and they wanted to ensure that they could handle all of their banking in one place, at the same time. This simplicity attracted them, despite the fact that they were only beginners, and didn’t fully understand what they would need as a business.

Takeaway

Market explicitly to consumers who are looking to separate their personal from business transactions. Messaging should come from a place of empathy and speak more to the pain point.

Episode 3-2 Darius | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Our interviewers dug deeper. It was clear that Darius and his wife had decided on Chase mostly out of convenience.

Takeaway

Develop products and services that are geared toward new business owners who are feeling anxiety about choosing the right checking account. Consider offering a “business starter” account that is designed specifically for basic account features and payment acceptance tools.

Episode 3-3 Darius | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Soon after setting up their business account at Chase, Darius and his wife were ready to take their business to the next level. They had already committed full time to their photo booth rental service, taking it to a full-time enterprise.

Takeaways

As an institution, commit a similar level of effort to retaining existing business accounts as you do to attracting new ones.

Episode 3-4 Darius | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Darius realized that there had been some international charges posted to his account — clearly a case of fraud. Chase responded by putting a “freeze” on his account.

Takeaway

When helping business owners through fraud and other stressful situations, ensure that your staff is trained to project empathy and understanding. This can often make or break an existing customer relationship.

Arne

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Full Interview — Arne 67:54

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Our fourth interview tells the story of Arne. He is currently a director of operations at a startup. As part of that effort, Arne began to look into their banking setup and fee structure — hoping to find some ways to cut costs. What did he discover? And why did he eventually decide to switch banks?

What specific forces influenced Arne to finally move their banking to a different provider?

Arne started his story by describing his company’s founding. Because his startup was moving quickly, they continued with the same institution. But it was not a good fit from the start.

Episode 4-1 Arne | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

Through the course of his investigation, Arne realized that they were overpaying for “archaic” services they didn’t need.

Takeaway

Return the phone call. Let your customers know that they’ve been heard. Follow up on commitments.

Episode 4-2 Arne | HubSpot Video

Opening an Business Account Why Leave One Bank for Another?

The best course of action, Arne decided, would be to meet with their banker to review their current setup and to reduce their monthly fees.

Takeaways

We’re all familiar with upselling and cross-selling, but it’s also crucial to find the right product fit for the customer.

Assess how businesses choose their banks:

What makes someone close their business account at one financial institution so that they can open an account at a different institution? Pay close attention to the many forces at play that, taken together, may influence a customer to find something better.