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BNP Paribas Group: creating a distinctive SME brand value proposition 05 February 2015

Pascale Devriese, project manager for small business at BNP Paribas Group, France and Fabrizio Ridolfi, coordinatore ’Mestiere Impresa’, BNL BNP Paribas, Italy share their views on non-financial value-added services and their vision of them as a complementary value proposition alongside the traditional banking offer.

We believe that the small business market is represented by customers that have a relationship with the bank for their business needs, but are served within the retail network. Our approach within the group is to get the basics right first. We are bankers, so we focus on the core banking services: daily banking, credit and also the dual relationship. We do that through our traditional relationship model, based on a multichannel approach. This is very important, because these core banking services bring 50 to 65% of the NBI and even more in some operational entities. But today, just being a good banker, being efficient and having good solutions, is no longer sufficient. We’ve gained some very important insights that can be summarised within three main areas. 1. The common reality. The small business market is very heterogeneous. We have several activity sectors: according to the life cycle of a company, there are very different needs. When we’ve talked to our customers, we’ve noticed that they are all facing the same reality. They are all working not 35 hours a week but 35 hours a day! Whatever profile they have or whatever position they’ve reached in their life cycle, and whatever their activity sector, they are facing the same constraints. Today, being a good professional and doing your job as a plumber, a dentist or a start-up creator isn’t enough - you also have to be a very good manager. This means that small business customers are looking for information, with quick access to expertise that will help them to run their business and grow in this difficult economic climate. 2. Appetite for digital. The small business segment is particularly well equipped. Our customers tell us that they aren’t geeks but they have a mobile, a tablet, and perhaps a second smartphone for private needs - so they are all fully equipped. They use digital not only for their private use but also more and more to run their businesses and to grow. We’ve also seen the emergence of e-commerce at a low level, where very small companies including individual, self-employed people are launching their activity via e-commerce. Digital also provides a way for them to save time and increase their efficiency, so banks must pay attention to this phenomenon. Another trend is in social professional networks. More and more small business customers are asking for advice and seeking information not from experts or banks but from the Internet, and they use their social networks to find it. We see phenomena like a retail barter group, negotiating for small communities or a group of small business customers. These are very important trends. 3. The tool bank and the relationship bank. Our customers are asking for the digital tools they need to manage their company but they also want to have a strong relationship with the bank. They want the bank to understand them and their reality and their business. So, digital does not kill the physical - it is just complementary to it. By combining the tool bank and the relationship bank, we could provide a better solution to our customers’ needs. Those three findings lead us to the conclusion that we must be more in contact with our customers, not only to answer their questions and needs but also to talk ’about them’ and their reality, instead of talking about the bank… Non-financial, added-value services These issues confirmed the need to complete our traditional core banking services offer with non-financial, added-value services. A bank can help its customers to be better managers and to gain easy access to the information that they need. It can give a customer the opportunity to meet his peers and put him in contact with potential partners. It can also make it possible for him to save time and money, and to take the right decisions at the right moment. This will all give the bank a very important lever to activate the customer, to improve customer satisfaction and also to gain a better knowledge of the business, due to the numerous contacts it can develop with him. Here are some examples from our group, classified into several categories: 1) Rich, non-banking internet content. It seems very basic for a bank to have an internet site and to provide rich internet content. It’s a little bit more difficult if it wants to provide relevant content adapted to several segments or communities, and adapted to the different life stages of a company. This is a very powerful tool if the bank can rely on social networks to spread the information. It’s very useful for increasing brand awareness: if the bank has a strong presence on the internet, it can facilitate its acquisitions if it can also be linked with the CRM for capturing prospect data and to organise sales feedback. One example is the Kobi TV developed by TEB in Turkey. This is a very interesting way to provide rich internet content - not in a traditional way, with articles on different topics, but presented in a TV format, with small TV programmes. This is an effective way of spreading information to customers about the economic context, innovations, and new rules and regulations. However, it can be difficult to implement this type of rich content. If the bank wants to create traffic to its site, and capture the information and exploit it in the CRM, it needs to have permanent updates. This kind of initiative can therefore be very costly. 2) Information sessions and business education programmes. In this example, the bank isn’t only providing information - it is really interacting with its customers, thanks to the combination of physical and digital. The bank is inviting customers and prospects to conferences, workshops and events where it will provide non-banking content to show its added value as a bank. This will enhance the bank’s image and reputation, especially if it can find the right partners to help it to develop the programmes. Partners also help to improve the bank’s credibility. An example from our bank is a programme in Belgium involving Real Connect for Business conferences, with perhaps 200 or 300 customers coming together to explore a common theme. Post-meeting surveys and customer satisfaction surveys have shown that customers who have been to this kind of event, and have been able to meet their peers and specialists, have a higher level of satisfaction. 3) Access to experts, topics and advice. This may seem to be similar to conferences and business events, but it’s subtly different. It involves providing customers with access to experts in a deeper way. For instance, TEB in Turkey has developed some important initiatives with its SME Consultants Programme and the TEB SME Academy. This is about training the salesforce to be business advisors, not just bankers, and training the customers to help them to be better managers. It is very specific for the Turkish market, where TEB wants to position itself not only as a traditional bank but also as an advisory bank. This programme has been set up with business schools and universities to train senior relationship managers to be good advisors in marketing, foreign trade and human resources management, which in turn will help customers to become more competitive. This is therefore an indirect way to demonstrate TEB’s involvement in the local economy. There are again some important key success factors besides the legal and compliance aspects and also measuring the return on marketing investments. These are very costly programmes which could face the threat of cost-cutting. So, keeping costs under control, calculating the ROMI and being able to retain the best senior relationship managers are all important. 4) Support for start-ups and the development of incubation centres. We have several initiatives within our group, with incubation centres in Belgium, Turkey and France. One worth emphasising is the Future Lab in Luxembourg. This is a very interesting initiative because the lab’s Internet site is a place where start-ups can gather to share experiences, have contact with experts and work with innovators, as well as meet potential investors or Business Angels. The incubation centre is installed in the former BGL premises. However, there is no branding for BNP Paribas or BGL. We want to position the bank as a partner of start-ups and the facilitator of innovation but we don’t have to do a lot of advertising there, because start-ups and other companies that use the lab will provide their own word-of-mouth adverts that will increase BGL’s reputation. 5) An internet platform built for communities (e.g. dentists, farmers etc.). Customers can benefit from rebates or special offers negotiated by the bank, mostly with big corporate clients. This has been launched recently and the first results are promising. We’ve noticed that the smaller the small business is, the more interested they are in gaining a benefit from negotiated rebates or special offers. Physical and digital My key message about non-financial added-value services is that it’s vital to achieve some very specific objectives, such as making selective acquisitions, cross-selling, the development of the customer’s share of wallet or improved customer satisfaction. However, in the execution, you have to combine both the physical and digital, because in this world, digital can really facilitate but the relationship is also very important. Another key success factor in the execution is to be able to develop partnerships to gain credibility and to bring rich content. It’s very important to avoid ’stop and go’ - some programmes can be very costly, and in cost-cutting periods some very interesting initiatives could be stopped, just because you can’t measure the return on investment or exploit the contacts you’ve generated due to those initiatives. My advice would be to combine different initiatives. It’s very good and useful to develop non-financial, added-value services but first of all you have to get the basics right. Here is one example of how BNL has approached this issue: Mestiere Impresa The world is changing and so is the SME market, which has been very traditional. We are moving towards a new era and digital will be one of the key factors for success in the future. Banks talk a lot about digital but we don’t see many examples of this new digital world. ’Mestiere Impresa’ is BNL’s first attempt at a new, social direction, aimed at SMEs. BNL is a medium-sized bank in Italy, with about 900 branches. We have micros and very small entrepreneurs in branches and we have 51 offices for medium enterprises. Our market share - about 3% in loans - allows us to try new opportunities for acquisition in more innovative ways. We have to acquire good customers in a difficult market, and we think that digital can help our network. We’ve had to find new customers who are of very high quality in terms of loans and credit. We couldn’t open any more new branches, as this isn’t an option in Italy. We had to be innovative and try to do something different. So, we explored new ways of contacting entrepreneurs. Our solution was Mestiere Impresa (loosely translated: ’your job: enterprise’). This is all about communicating and listening to our customers’ needs. It’s a social platform for building partnerships with clients, supporting them and growing with them. We believe in a very emotional link with our entrepreneurs. In Italy, ’Mestiere’ is connected with expertise or a craft. We want to show our users that we believe in their expertise and the strength of their relationship with the bank. Mestiere Impresa is basically an internet portal with numerous connections to the social media. It’s a social community and a source of information - a virtual square where entrepreneurs can meet. We don’t charge anybody to navigate and, most importantly, we don’t call anybody to sell anything to them: we don’t use it for product placement. The first part of Mestiere Impresa is all about telling real stories about entrepreneurs who are real customers. Each story enables us to focus more deeply on a specific business aspect. Entrepreneurs have a very strong presence on the site and their stories act as a promotion for them. Specific questions on specific aspects of the story can be deepened through questions to our experts. Another important aspect of Mestiere Impresa is a type of small Wikipedia on the life cycle of the enterprise. There is information about everything connected with the enterprise - we don’t just cover aspects connected with our products and services. Anyone can ask anything and we try to answer their needs and to publish the results. At any time, anyone can ask for a commercial contact with the bank. This is necessary when they’re talking about their own specific needs rather than general issues. The situation deepens when they ask questions to our gurus. We try to find a new guru if there’s a question that isn’t covered by our existing gurus. We try to be as innovative as we can and this isn’t strictly connected with bank products or activities. This is very important for us, because we are now escaping from routine, unwanted contacts. We just wait and see what the users of the site want - and we try to give it to them if it’s a product. We also want to understand their needs if there is something new that our bank products don’t cover. Another element of our site is our blog. This is basically an online newspaper with information about various situations. We cover the most important news in any business area. We take news and articles from our gurus and from associations and other sources around the net so that they can get information about any particular sector. There is also an agenda of all of our events in Italy and across the world. We are very focused on events. In Mestiere Impresa, we are developing our group’s Real Connect for Business platform, which is a very important tool for organising conferences and round-table discussions. This will provide us with feedback on people’s awareness of the brand and of what we’re doing with our customers. Why should an entrepreneur spend his precious time with us? Our first year gave us the answers. Their story promotes their business. They have campaigns at no cost; they have access to information, which is one of the key factors behind business success, and they don’t pay anything for that at the moment. Those that become contributors and like to be part of a social environment can be considered as opinion leaders. Being informed about events and other information about what is happening in their world is another key success factor. This case study was one of the most highly rated presentations at Efma’s recent SME Banking Conference.

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