Abstract:

This paper presents some of the key findings from a qualitative research project conducted by NOP Corporate and Financial on behalf of Lombard Business Finance. The overall objective of the research presented in this paper was to determine the viability of a direct distribution channel in an important segment of the business market, defined from an earlier segmentation study. In other words to establish whether this market segment (made up mainly of smaller businesses) would accept a telephone- based service rather than the traditional salesforce as the main channel of distribution. The research found the concept to be a highly relevant one offering benefits to both customers and supplier alike. However, it also established that the credibility of the supplier and the building of a relationship were absolutely vital. The exact nature of that relationship was explored in some depth and one of the most interesting conclusions from the research is that small business’ self-perception has changed significantly as a result of the recession. These businesses see themselves as survivors, heroes even, who expect a partnership of equals not the sort of parent: child relationship so often found in the financial services sector. The need for equality in the relationship is exacerbated by the perceived performance and behaviour of some of the banks. The extravagant lending policies of the 1980’s and the subsequent need by some banks to reduce their exposure, via the apparently impulsive recall of small business overdrafts and loans, has impaired or even destroyed, many customer relationships. And by so doing, has created a vacuum in the market into which the Lombard product concept can be directed. The research showed that it was important for Lombard to promote both sensible lending and the desire for a genuine relationship. And via the use of projective techniques (which were shown to be very valid in a business context) established the basis of the service proposition. This needed to be built around not only access and speed, (which predominate in the retail sector) but also the reliability and ’warmth’ typified by the British milkman.