In the latest episode of The Heartbeat of Main Street, a small business podcast series by Bank of America and ForbesBooks, entrepreneurs were given a wealth of information about how their businesses can benefit from banking rewards programs. Tune in to get insights about how loyalty programs with vendors can play an important role in the growth of a small business and hear about how you can earn benefits from Bank of America by taking advantage of their new Relationship Rewards program.
The Heartbeat of Main Street delivers timely insights tailored to the needs of small business owners and entrepreneurs. Featuring a rotating line-up of small business experts and industry leaders – and covering a range of topics – each episode explores the trends that impact revenue creation for small business owners.
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Kevin Condon: Entrepreneurs are among the busiest people out there and the program has to be simple, easy to understand, and easy to enroll. When we took a step back we said, “Can we design a program that spans across all the products and services of the bank that meets those three tests? That's easy to understand, that provides incremental rewards, and really appreciates the loyalty of our clients?” That's what we did with Relationship Rewards.
Gregg Stebben: Talking with Kevin Condon, he's the Senior Vice President of Rewards Programs for Bank of America. It's interesting that the name of this program is Business Advantage Relationship Rewards because at the core of all this is, frankly, what all business people want to have with their customers, which is a relationship. That must be what was behind the research and must've been what was behind the creation of this product. What kind of research did you do as a team to determine what would be the most valuable things you could offer your small business customers?
Kevin: Greg, we talked to many small business owners, many of our own clients at Bank of America, and clients of other banks. We gained a few keen insights from that research. The first was, as I mentioned, perhaps more than anyone entrepreneurs appreciate the value of loyalty because they're working so hard to earn the loyalty of their customers. Any offering that they have with their suppliers or their partners that recognizes the value of their relationship is something that they'll be interested in. The second thing we gleaned from that insight is those rewards or that loyalty program needs to be incremental, meaning the more business I give you the more I get from you, and if the business I give you increases a lot I want the value of that reward to increase even more than that.
Then, the third thing that we learned from them is entrepreneurs are among the busiest people out there and the program has to be simple, easy to understand, and easy to enroll. When we took a step back we said, “Can we design a program that spans across all the products and services of the bank that meets those three tests? That's easy to understand, that provides incremental rewards, and really appreciates the loyalty of our clients?” That's what we did with Relationship Rewards.
Gregg: This whole conversation about rewards is really interesting, and before we get into the specifics of your new program at Bank of America, I'm wondering what other kinds of rewards small business people told you were most valuable to them? I'm really asking because I suspect some people who are listening could learn oh, I didn't realize I could take advantage of rewards in other parts of my business, and obviously we want to talk about the banking rewards from Bank of America as well. What other kinds program did you hear small business owners talking about and really appreciating the value of?
Kevin: Greg, we found that through our discussions with our clients that there are a growing number of great loyalty benefits in the marketplace, and I would encourage every small business owner to ask their partners and suppliers if those suppliers offer such a program because they are on the increase. What we heard though is the characteristics of those better programs tend to be, as I mentioned, those that offer incremental value when I do more business with you. The more I give you the more I want to get from you, and those benefits need to increase the more business I give you. Think of the frequent flyer program at an airline, the higher your level of status you achieve, the better the benefits you get each time you fly. You get a bonus on the rewards, you get earlier boarding, you get incremental free bags that you check, that's an example of those incremental benefits the more business I give you.
Second key element were those rewards programs that focus on what's most important to the small business owner tend to do the best. For example, if your business requires you to be on the road a lot and buying or purchasing a lot of gas at gas stations, a program that offers benefits such as cash back on gas purchases is critical. It's something that the small business owner is doing every day and it provides tangible benefits where they don't have to change their behavior. All they have to do is reward that provider with more of their business.
The third key element we found was small businesses want programs that recognize the full value of the relationship. Rewards programs that omit a part of the relationship with the small business tend to be viewed more skeptically, so if there's one part of the business that's rewarded and one part that's not small business owners tend to take a step back and view that a little bit more skeptically.
Finally, those programs without a lot of fine print or exceptions are the most successful. The easier the program is to understand, the easier the program it is to enroll, and the easier it is for the benefits to be tangible and meaningful to the small business owner without having to do a lot of research analysis are the programs that tend to do the best in the marketplace.
Gregg: Let's talk about the specifics of your new program. It's called the Business Advantage Relationship Rewards, it's a new program that, as you've now said, offers small business clients a lot of different benefits, frankly, to help them grow their businesses. Let's talk about some of the specifics. What are the things that your clients are going to enjoy as participants in this program?
Kevin: We tried to act on the feedback and the best practices that our clients told us about rewards programs when we launched Business Advantage Relationship Rewards most recently. The program recognizes and rewards our small business clients across the products and services that Bank of America offers them, so there are benefits on small business deposit accounts, investments, credit cards, and loans. It's simple to understand. Starting at $20,000 of any combination of deposit or investment balances that a client has with Bank of America they start earning benefits. Those benefits span the entire relationship across those products and services that I just mentioned. From fee waivers on your checking accounts, to cash rewards on merchant services processing, to interest rate discounts on loans, to higher rewards bonuses on the credit card purchases. You receive benefits across all the services we have to offer.
It's a tiered program so we provide those incremental benefits, the more and deeper your relationship with us there are three tiers and when your qualifying deposit and investment balances reach the next tier the value of those benefits across the services I mentioned go up. The higher the tier you qualify for the greater those benefits become. We launched it most recently after extensive research across those three areas, we tried to reflect that in the program, and we're very excited with the results so far.
Gregg: When you talk to small business owners in doing your research on this would you find that they, on their own, could point to specific parts of the banking relationship where they would benefit from rewards or was it more of a give-and-take with you suggesting what if we did this and what if we did that? I'm just wondering how prepared were small business owners to dive in and help you address places to create rewards versus you coming to them and making suggestions based on your own internal research?
Kevin: Our small business clients were very eager to help us in our research. We found that the critical elements where they found that they could get the most was, as I mentioned, recognizing the full value of the relationship. What they felt was most financial institutions provide rewards on one particular aspect of their relationship, be it the credit card rewards programs that most of us are familiar with both in our consumer lives and in our small business. What our small business owners said is, "Hey, we'd like to see you recognize the full value of what I bring to you not just credit card, but also those deposit balances I have with you, my investment relationship I have with you, and any lending I do with you with your bank. We want to see benefits across the whole spectrum."
Based on that overarching theme and feedback we got from our clients the rewards program that we designed really became easy and our clients were more than happy to react to the specific benefits that we brought, but it's simple to understand. If you purchase one of any one of those services with Bank of America you'll receive a benefit and the deeper that relationship goes the greater that benefit becomes. That was the keen insight that we got from our clients.
Gregg: One of the things that I really admire about this program, I'm talking with Kevin Condon, he's the Senior Vice President of Rewards Programs for Bank of America, one of the things I really admire about this program is that it really is focused on many parts of a business including not only having the businesses' relationship with Bank of America grow, but helping the business grow itself so that it grows as an entity in the market marketplace, which then of course naturally creates a growing relationship with the bank. One of the places where I think you've done that very successfully is by actually offering interest rate discounts because, as we all know, if you own a small business there are times when if you're getting a small business loan that capital is essential and you're really, as you said, you're looking at every place where a small business can have a relationship with a bank, but I would suspect that for many small business owners having an interest rate discount on a small business loan is one of the most exciting things you're offering here.
Kevin: It is, and our small business clients were excited to give us that feedback when we laid out the options before we launched our Relationship Rewards program. Clearly, as you mentioned, a loan, be it a auto loan if they're requiring an automobile to help run your business, a commercial real estate loan, or an everyday loan for a line of credit clearly that's a need that many of our small business owners have to grow their business. We want to be in the business of helping our business owners grow their business, so a discount frees up some cash flow, helps our clients invest their funds back into growing their business, and if their business grows Bank of America grow along with them, so we're more than thrilled to work with our clients to do that.
Gregg: I'm curious to know the actual process you go through to talk to small business owners about programs like this. Are there a lot of face-to-face meetings? Is a lot of it done by email or electronically, by phone? If somebody's listening and thinks, "I would love to be able to give feedback to my bank or Bank of America as well," are there ways for small business owners to give you feedback today?
Kevin: When we designed the program we did extensive in-person discussions with multiple small business clients, so we would have groups of small business clients come together and talk about what's important to them, what needs they have from their financial institution, where they feel some of those gaps had been in recognizing that full value of the relationship, and what benefits would help them bring more of their business to Bank of America. We found that those in person, face-to-face discussions were a great opportunity for us to get really deep insights on how we can better serve our clients going forward.
In terms of ways that a current small business client could come and talk to us, we'd recommend you setup an appointment to speak to a Bank of America employee, if you go to bankofamerica.com there's an opportunity to schedule an appointment with a customer. We'll be happy to talk with either a small business specialist or a specialist in one of our financial centers, we take that feedback on a day in and day out basis and act on it to try and increase the value of the services and products, and the rewards programs that we're bringing to our customers.
Additionally, as the program matures for Relationship Rewards over the next weeks and months we'll be gaining direct client feedback on their customer experience on everything from enrollment to how our associates explain the program, to how we could offer even more value on different benefits going forward. We'll be back in the marketplace doing those group discussions in short order.
Gregg: This program is brand-new, I think you just rolled it out a week or so ago.
Kevin: We did. We launched it on March 26th and we're very excited about the results we’ve seen in the first two weeks.
Gregg: You mentioned the word “as the program matures” and I think that's another important thing to small business owners. Just in the conversation we're having here there's a clear commitment to this program and having it evolve over time into something that increases in value and so when you describe it as maturing can you look out and see where this program might be in a year, 5 years, 10 years from now? Do you have thoughts on what the future may be for the Business Advantage Relationship Rewards Program?
Kevin: We're always looking to expand the value of our rewards programs with our clients, and so the best roadmap we have for seeing how Relationships Rewards may evolve will be looking at the rewards program we had in our consumer space. Relationship Rewards is modeled after our consumer Preferred Rewards program, which was launched a little over three years ago and in those three years we've done the same process of gaining client insights and feedback, and we've adjusted the benefits of the program during that time. We've adjusted how we've communicated, how a customer can enroll, we've adjusted how we communicate what the benefits have actually been. We've changed, in fact, some of the benefits themselves adding additional lending benefits to the consumer space. What we found is the best way to draw that roadmap is to continue to talk to our customers and clients, and so I can't tell you how the program will change in Relationship Rewards, but I can tell you it will change, and the people that will help us change it are our small business clients.
Gregg: When you encourage people to reach out and talk with someone at Bank of America about things they see that could be a benefit or an addition to the program you really mean it because that feedback is going to go right back into the R&D loop.
Kevin: Exactly. In fact, the reason we've launched Relationship Rewards was based on feedback that our small business clients, who were also consumer customers, told us. They said, "I love the fact that I have a rewards program for my consumer business. I would love it if you could bring it for my small business relationship well."
Gregg: He is Kevin Condon, he's Senior Vice President of Rewards Programs for Bank of America. We're talking about the Business Advantage Relationship Rewards program, it's a new program for small business clients of Bank of America and it offers all kinds of benefits to help them grow. I guess, the last question, Kevin and it's obvious one, is if I want to become part of the Business Advantage Relationship Rewards program, what do I do?
Kevin: The easiest thing to do is go to bankofamerica.com and click on the small business tab and schedule an appointment to talk to one of our small business specialists or one of our financial center associates. They'll take you through the process of how to enroll, answer any questions you have, and talk to you about the core products and services that go into Relationship Rewards where you receive all those incremental benefits.
Gregg: This is, frankly, a different type of process than I might go through opening and a consumer account because, in this case, I'm speaking to someone who is a specialist in working with small businesses?
Kevin: That's right. We have several thousand small business specialists located across the country and available via phone. We want to make sure that we're putting our small business clients in the right services that best meet their needs, so we'd like to have a conversation with our small business clients to ensure that they're in the correct core product offerings before we enroll them in the Relationship Rewards program where they get those added benefits on those offerings.
Gregg: You mentioned earlier that this service grows with you as your business grows. Can you mention those tiers again and if there are fees associated with being part of the program, could you tell us about that as well?
Kevin: There are no fees associated with being enrolled in Relationship Rewards. As I mentioned, it's a three-tiered program we have Gold, Platinum, and Platinum Honors. Our Gold program, a customer qualifies with $20,000 of combined deposit and investment balances, if those balances increase to $50,000 the client moves to Platinum, and at $100,000 of deposit and investment balances you become eligible for the Platinum Honors program.
You asked me about fees, Gregg, and are there any fees. In fact, the fees on your core deposit account are waived as a client who's enrolled in the program. The value of the benefits across lending, merchant services, investments, credit card, and deposits increases as you move up those tiers. For example, at the Platinum level you receive the benefit of no fees on non-Bank of America ATM transactions. There's a limit on how many of those fees are waived. When you move to Platinum Honors that a limit is waived, so the value of the benefit growth as our relationship with our client grows as well.
Gregg: It's a really interesting and clearly valuable program. I love the fact that as you move up through the tiers the value of the program itself increases and, as you said, there's no fee to be part of the program and in fact, in a way, you're actually saving on fees. He is Kevin Condon, he's Senior Vice President of Rewards Programs for Bank of America. We've been talking about the Business Advantage Relationship Rewards program. Kevin, thanks so much for joining us.
Kevin: Thank you for having me.