First Business Bank Marketing Plan

Introduction 

First Business bank started its operations in 1909 under the name Kingston Dalton State Bank, and since then it has been serving its clients to meet their financial needs. On March 09, 1990, the bank changed its name to First Business Bank of Madison. On April 02, 1990, it moved its headquarters from Kingston Wisconsin to Madison Wisconsin. On March 07, 1996, the bank again changed its name to First Business Bank. On Oct 03, 2001, it changed trust power from Trust Powers which was not granted to Full Trust Powers Granted. The bank currently operates two branches and is a subsidiary of Firsts Business Financial Services Inc. First Business Bank is a subsidiary of First Business Financial Services Inc which was incorporated in 1986b in Wisconsin. The bank is headquartered in Madison, Wisconsin and engages in commercial banking activities. The bank conducts all operations of the holding company. It offers a complete line of products tailored to the needs of small business enterprises, owners of such business, executives, high net worth individuals and professionals. The bank does not rely on an extensive walk-in branch network for its retail clients and therefore, to this traditional banking deposit base, First Bank employs a wholesale funding strategy which enables the bank to fund a portion of the retailers' assets. The bank has been conducting its business operations using one operating segment. 

The bank announced its intention to consolidate the three banks (First Business Bank, First Business Bank –Milwaukee and Altara Bank) to a single charter. With such changes, the bank intends to retain the existing management structure. The local banking leaders will maintain their roles and decision making authority. The heads of trust and investment management, as well as specialty finance business, will retain their current functions and decision making. The charter consolidation plans have already been approved by the board and the subsidiaries. The applicable federal laws and state banking regulations have also passed the consolidation. The plans were to take effect in the second quarter of 2017. The bank reported a total asset of $1.781 billion on December 31. The gross loans and lease reported in the same period were $1.452 billion while total deposits amounted to $1.539 and shareholders' equity was $161.7 million. 

Situation Analysis 

The US business environment in which the bank operates offers numerous opportunities that the bank can exploit in addition to threats that can affect its operation. The country has a sizeable middle-class population that provides a ready market for the services of the bank. Similarly, many small and medium enterprises present potential markets for the commercial segment. The market, however, has significant established banks with an extensive branch network and strong capital bases to compete in the market. 

Strengths 

First Business Bank has a dynamic workforce that is experienced in the different specialty to enable the bank to meet the needs of the clients. The bank prides itself on having a team of experts that offers financially comprehensive business solutions for all business enterprises. The employees can determine the riskiness of each business or individual loans and device the best product for the client. The array of products offered by the bank ranging from commercial mortgages, lease agreements, fiduciary and investment, working capital management and small business administration.Others include equipment financing, asset-based financing offers an extensive portfolio of the business enabling it to operate in a dynamic environment that requires companies to be responsive to the needs of the customers. 

The array of products not only gives the bank additional revenues and shields it from competition but makes it a reference point for employees who would like to test their understanding of different aspects of the same company. The company ensures that its employees are empowered with relevant training to enable them to handle the massive elements in the bank portfolio. First Bank has one of the most dynamic management team that is highly motivated and well compensated. The management rewards creativity and employees are encouraged to generate new ideas. The bank also measures the performance of its employees ensuring that they are performing optimally. Team spirit is sustained throughout the bank and employees have periodic exchange programs, and outdoor activities that enable them to bond know each other. 

Modern technology has been one of the most significant assets that have enabled the bank to serve its broader market without having to open walk-in branches. Through technology that links the different sales offices with the headquarters, customers access seamless banking services using diverse avenues. This business model has enabled the bank to have a lean workforce that ensures that the overall cost is maintained at low prices. This approach has allowed the bank to support low-cost differentiation strategy making it stand out from its competitors. 

Weaknesses 

The bank has not exploited the power of marketing to create awareness of its diverse services. Even though the bank has excellent products and services for all small and medium enterprises, brand awareness is still low with some of the customers assuming that the bank deals with the conventional banking business. Most of the customers who use the other services have either heard about them from loyal customers and employees. The potential of marketing to create awareness by informing, persuading and reminding the customers the offerings of the bank has not been utilized. The current marketing efforts are disenfranchised and sell each business unit independently. The company has not managed to develop a corporate marketing strategy that captures all business units and sells the entire bank and its subsidiary as one. 

With limited branches throughout the country, the bank is losing some of its business to competitors who have an extensive network. Some customers prefer to do their banking services in brick and mortar structure while other especially business people who periodically travel to different locations for business are informed by the number of branches that the bank operates. The conventional banking business has faced many challenges in the recent past. Most of the products are not differentiated, and with a free market environment, different players are allowed to enter into an already overcrowded market. 

Banks are finding it had to differentiate their services and some are trying customer relationship management as a way of maintaining their market share while eating into the market of the competitors. With limited or nor branch networks, the use of customer relationship management models can be confusing for the bank as there is no personal touch between the clients and the bank officials. The location of regional sales offices is also another weakness that is facing the bank. The bank serves only clients from the localities where such sales offices are located. The bank has not exploited an expansive market structure for its financing, investment and working capital management services which are unique yet challenging to get especially for those clients that are not close to the sales offices. 

Opportunities 

There are many opportunities for First Bank based on its portfolio and strategy. The Bank has a wide array of high yielding investment products that create a potential for future growth in revenues. The investments will guarantee the bank a continuous stream of cash flows into the future. The management team has managed to reorganize the bank's portfolio to eliminate the non-performing and retain only those that guarantee cash flows for the bank. 

Technology has enabled the bank to serve its market segment efficiently without incurring additional costs. The bank has an expanded market to cover with its fighter brands. With technology, the bank has managed to meet and exceed the expectations of its customer while remaining responsive to the market dynamics. Technology has also been used in decision making especially on investment and other financing options. 

The bank has managed to develop unique models that are used to assist the management in decision making on matters of pricing the investments and the computation of risks. Enterprise resource management has been used to manage the operations of the bank, and decision models feed into the system allowing the management team to make informed decisions on investment decisions that are worth maintaining and those that do not offer value for money. 

The American economy offers banks an opportunity to grow as there are limited restrictions and controls from the government. Banks, therefore, need not worry about uncertain business environments while making their investment decisions. Similarly, with low limits, competition has enabled banks to develop customer-oriented strategies that improve their overall performance. They can also benchmark their activities with similar banks and determine whether they are performing well or not. 

Threats 

With the advancement of technology and global competition has drastically changed. Banks are facing external pressure from non-banking institutions that offer competing services. Technology has brought competition to the doorsteps of banking institutions with competitors searching for ways of winning even the most loyal customer by providing them exciting products like loans at a cheaper rate. Banks are trying to convince companies to open an account with them and promise better services, yet they intend to increase their market share. With increased marketing activities, banks are trying to eat into their competitors' market share while guarding their current market share. The great depression of 2008-2012 and the events shaping the global marketplace like Greece and Brexit, banks have been profoundly affected by the majority of them experiencing decreased activity levels and a decline in their revenues. 

Market Focus 

First Business bank targets individuals and corporate customers. The commercial banking targets professionals, executives, business owners and high net worth clients. The bank's customer is served with different product offerings depending on their needs. The conventional banking services reach to these market segment using various platforms. The customers do not have to visit a branch to access banking services. The corporate customers include small and medium-sized business enterprises operating throughout the country. The bank targets these categories 

Product Focus 

First Business Bank offers a complete line of commercial banking products in a limited branch network. The company has managed to use wholesale funding strategy to reach its diverse market with its products. This approach allows the bank to fund portions of customers’ assets. The bank serves its customers using a single operating segment. The bank has different categories that enable it to offer services to its customers. 

Business banking services 

These services are meant to offer entrepreneurs and business veterans with services that are lacking for other commercial banks. The bank employees dedicate most f their times to understanding the business environment and providing services that meet the specific needs of the clients. The bank targets fewer clients to enable it to receive quality service and personalized attention not just from the employees but the management. Such an approach has facilitated faster decision making, connections with the clients and the development of valuable relationships that last. 

The target market is served with commercial lending which is made locally by the bank officials who periodically interact with the clients. The customer can access equipment finance and SBA loans. Under treasury management, clients can run their businesses with ease using state of the art services from First Business Bank. The bank uses advice and latest tools to avoid fraud. 

Under the equipment finance, businesses can finance their operations with the help of industry experts who are aware f the existing laws on taxation and accounting. Lastly under the business banking services is the retirement plans where the bank retirement experts assist potential clients in developing savings vehicles that are best suited to the company's staff. The bank also offers a robust retirement education program to help it promote retirement savings for the client's employees. 

In the business category, the bank deals with commercial lending, SBA lending, Treasury management and Equipment Finance. In the specialty segment, the bank has factoring and asset-based lending. For individuals, the bank services include trust and estate management, financial planning, investment management and private banking. The bank also has industry expertise including manufacturing, nonprofit, food and beverage, and emerging technology. Another service from the company is the retirement plan services. 

Business Lines 

Commercial Lending 

First Bank targets the small and medium-sized companies in Wisconsin, Missouri, and Kansas. It uses term loans and line of credit to reach out to its clients. The company has also reached its customers in Madison and surrounding areas. The Milwaukee branch was opened in 2000 to take advantage of the substantial commercial activities in the city and surrounding areas. A loan production office was opened in 2006 in Appleton taking advantage of the booming business activities in Northeast Wisconsin. In later years, the bank has opened loan processing offices in Manitowoc and Oshkosh. FBB Milwaukee opened an office in Kenosha for loan production purposes and further expanded in the south-eastern area of Wisconsin. In 2014, the bank acquired Aslin Group Inc together with its subsidiary Alterra. The business added synergy because it was an established venture that focused on the same target business in the metropolitan area. 

Commercial loans offered by the company are usually secured by different types of assets including receivables, inventory, and equipment. The bank also provided loans secured by commercial real estate, multi-family housing, owner-occupied commercial facilities, office buildings, commercial real estate construction loans, retail centers. In limited cases, some unsecured loans can be issued by the bank. By December 2016 the bank total real estate and commercial loans represented about 85% of the total gross credit and leases. 

Asset-based financing 

Asset-based lending is offered by First Business Capital Corp which s wholly owned by the first bank. The loans target small and medium-sized companies. The c9ompany has sales offices strategically located in several states and serves its clients nationwide. The subsidiary offers revolving lines of credit as well as term loans used for financial and strategic acquisition, capital expenditure, bank debt financing, working capital, corporate turnaround, debt restructuring and debt –in –possession financing in case a company is facing bankruptcy proceeding. 

The subsidiary is well positioned to offer credit facilities to companies that do not meet the requirements of the mainstream banks. The financing ranges from one to ten million dollars for a period of two to five years. Asset-based lending generates more profit than the traditional commercial lending. The new line has complemented the traditi0onal banking loans providing the first bank with a diverse source of income. By the end of 2016, the bank's total asset-based lending business comprised 9% of the total loans and lease receivables. 

First business factor a division of First business capital offers lending services to clients through the purchase of account receivables on a full basis. The section provides competitive rates to start-ups, or clients in need of cash flow support or seeking growth or those facing financial distress. It generates higher returns than the traditional commercial lending while complimenting the bank's portfolio. The division is headquartered in Illinois and has sales offices in several states to serve clients throughout the country. The factored receivables and financing business by the end of 2016 represented 1% of the total loan book. 

Equipment financing 

First Equipment Finance LLC is a subsidiary of the bank that delivers a wide range of equipment financing products that includes loans and leases to meet the financial needs of commercial customers in different industries. The company focuses on manufacturing equipment, construction and transport, industrial assets, and a collection of other business machines. The financing this category ranges from $250,000 to $5bmillion payable in 36 to 84 months. By the close of 2016, this segment comprised of approximately 3% of the total loans and leases receivables. 

Small business administration 

The small business offers loans that originate from lenders to small clients who meet the eligibility and the underwriting guidelines. Different program guidelines differ according to SBA loan program in extreme instances, SBA offers guarantee t the lenders 50% to 90% of the principal and interest to induce the lenders to originate a loan. Most of the SBA programs are originated from the 7(a) loan program that provides a guarantee of 75% inclusive of the principle and interest. If loan defaults, the SBA may be requested by the bank to buy the guaranteed portion at an amount equivalent to the outstanding principal and interest. The SBA, also, will share the cost of collection and any proceeds of liquidation on a pro rata basis. 

The bank is an active participant in the preferred lender program which is an initiative of the SBA to streamline necessary procedures for financial assistance to small business enterprises. The SBA delegates the ultimate credit decision and servicing and liquidation authority to selected PLP lenders. The bank optimizes its expertise and capacity to package, process, underwrite, service and liquidate if need be in any location where SBA operates. SBA lending generates new business avenues for the bank by advancing loans to the clients who cannot meet the borrowing requirements of conventional bank loans. The bank earns income from the rate of interest on the note. Similarly, the bank gathers deposits from the clients and offers additional services to the clients. 

The SBA strategy generates non-interest income from two distinct sources; selling the guaranteed SBA loan to aggregators to scrutinize the assets and sell it in the secondary market receiving a premium on any loan sold results to the recognition of income in that year f sale. Secondly, the Bank gets servicing income which is paid by the holder of the securitized asset for the loan period. Before the bank sells the guaranteed portion, it has to evaluate some factors that inform its decision. 

Treasury management services 

The bank offers comprehensive services to its commercial clients to help them manage their cash and liquidity, electronic payment solutions, accounts receivable collection services fraud protection, cash vault services, reconciliation and data integration solutions and information reporting. Additionally, the bank facilitates international trade for its clients engaged in global business by offering foreign exchange and trade letters of credit. The clients also have a variety of deposit accounts as well as balance optimization solutions from the bank. The bank has focused its efforts on increasing sales in the services as it continues expanding its noninterest income by targeting new and existing business clients. 

Trust investment services 

First business bank in its First Business Trust & Investment unit performs the tasks of an investment and fiduciary and investment manager for the corporate and individual clients. It creates and executes strategies for allocating assets for the needs of each client. FBIT has full fiduciary powers to offer financial planning, trust, and estate and investment services while acting as a trustee or agent including employee benefits/retirement plan services. FBIT provides brokerage as well as custody only services where it administers and safeguards the assets yet does not give investment advice. 

Marketing objectives 

From the situation analysis, it is evident that the company needs to develop a strong marketing campaign to increase its clients. Despite targeting a niche market with personalized attention from the management, the bank should make its services known to a broader market. Doing so will enable it to benefit from economies of scale and increase its revenues. The bank should strive to achieve the following marketing objectives. The first aim should be to create awareness of the bank and its products and to be recognized as the only bank offering personalized attention to its clients with customized solutions. The next should be to develop an integrated marketing campaign for the entire bank and its different segments. The third and final marketing objective is to create a healthy corporate brand by enhancing the ability of the customer to recall all the services offered by the bank. 

Marketing goals 

The first goal is to increase the awareness of the bank and its services by small and medium enterprises and individual clients from the current 10% to 15%. A second goal is to align all the company marketing effort towards achieving the same goal by developing a single marketing campaign that captures all services offered by the bank and its subsidiaries. The last goal is to develop marketing campaigns with easy to recall taglines, corporate colors, and slogans. 

Sales and marketing strategies and actions plans 

Enhanced relationship marketing- The focus is to build a healthy relationship with the bank's customer. The current relationship will be improved while making new ones. Relationship building will help in brand recall and create referrals. For investing and financing services, the bank will benefit from increased expenditures in addition to preference of the bank's services compared to competitors' 

Word of mouth marketing – Oral communication will work best in achieving the desired objectives. The number of customers served by the bank is still low, and therefore, it is possible to target all of them with the marketing campaign. It is possible to develop more insight by sharing with the client, and the bank will be aware of the feelings and perceptions held by its customers. Word of mouth will help in enhancing the existing bond between the bank and the clients. 

PR marketing - The bank will work with the media to create awareness of its services and the target market. The message will inform on the benefits customers are likely to gain by using the services of the first bank. PR has been proven to be the most effective marketing strategy for it helps the company retain a good name and if something goes wrong, PR can be helpful in correcting the mistake without losing customers or developing negative publicity. Publicity can help customers build trust and use financing, investing or commercial services with no fear. 

Event marketing - The bank can create events for its business customers t showcase the leasing and financing options. Similarly, it can use the occasion to market other services offered by its subsidiaries. The bank can include another company that provides complementary products for conducting an event that captures the potential market. Such an event can be held in one of the clients' premises and services offered to the client showcased to the others. The bank can use the function to recruit new clients into its customer base. 

Outbound marketing - First Bank can develop a list of small and medium companies that it intends to recruit into its existing client base. The generated file is then used to make cold calls or visit their premises and seek an audience with the management where the bank officials will explain their intentions and the different services that the company can benefit from after enrolling to be one of the clients. 

Direct marketing – In this strategy, First bank will communicate directly to the current customers and potential customers. The bank can use emails, fliers, texts and other promotional materials to reach the target audience. To the existing customer, the bank can inquire whether they are aware of the different services being offered or if the client is willing or planning to use other services provided by the bank. 

Newsletter marketing- First bank, in this case, writes a newsletter highlighting some of its investment and financial options that can be of interest to the clients. The newsletters can be distributed to the current clients to create a sense of inclusion allowing them to use one or two services by the bank that they are not currently using. 

Article marketing - First bank being the market niche leader in financing and investing activities including working capital management can develop an article that captures the unique services and use persuasive language to convince the reader the benefits accrued from using some of the facilities. Articles can be useful where technical information needs to be communicated to the buyer who in most cases is also specialized in their area of interest. 

Search marketing - in search marketing, First Bank will use search engine optimization to capture potential clients who rely on the internet for information. The bank will benefit from the high number of potential clients who use the internet to search for service providers. Having unique products and services will enable the first bank to drive more traffic to its services. 

Niche marketing - First Bank should continue targeting its niche market using different messages that address their concern. The bank has a vibrant segment that needs to be enhanced so that they do not feel left out. Some of the marketing strategies should in particular target the market segment. The bank, for example, should enhance its relationship with the market segment. Similarly, events marketing can be done for the niche market only. 

Personalized marketing – First Bank can customize its marketing campaign. One on one strategy is useful in product differentiation. The bank has managed to use this approach in some of its clients, and the efforts have proved to be beneficial. The bank will try to make unique products for each customer by understanding their needs and developing a product that is just perfect for the identified need. 

Action Plans 

Action plan/Activity/project	Responsibility	Deadline
Develop a customer relationship system	Sales + marketing + IT dept	31/12/2017
Design Appropriate message	Sales and marketing manager	16/12/2017
Develop content for PR marketing	Sales and marketing manager	31/12/2017
Select an event and allocate funds	Sales and marketing manager	18/12/2017
Develop a list of potential clients	Sales manager	10/12/2017
Identify potential market	Sales manager	06/12/2017
Decide on the content of the newsletter	Marketing manager +sales	15/12/2015
Select article and message	Marketing manager +sales	15/12/2017
Optimize search engines	IT department	06/12/2017
Select marketing campaign for niche	Sales manager	10/12/2017
Identify needs of each client	Sales manager	31/12/2017

Marketing Budget 

First Business Bank
Marketing Campaign
Summary Budget
Customer relationship system	$ 1,500.00
Media campaign	$ 3,000.00
Event marketing	$ 2,400.00
Travels and communication	$ 1,600.00
Newsletter development	$ 2,100.00
Article development	$ 1,200.00
Other costs	$ 1,200.00
Contingency 10%	$ 1,300.00
Total Cost	$ 14,300.00