What are the pros and cons of doing my business banking with a credit union? —Hussein R., Vancouver
As someone who has spent most of her life with the Bank of Mom and Dad, I’d never considered what credit unions are before your question came in. Turns out they do most of what the big banks do, but they tend to operate locally and their customers are members (thus the term credit “union”). That customer-first bias might explain how credit unions as a class outperformed most of the individual chartered banks in all service areas covered by a banking satisfaction survey conducted in 2007 by the Canadian Federation of Independent Business. And, by the way, SMEs form the core of credit unions’ business clientele. But that doesn’t mean a credit union is any more likely than a big bank to approve your loan request. The downside? According to the finance experts I consulted, credit unions can have difficulty keeping up with clients as they grow, although larger credit unions such as Vancouver-based Vancity are exceptions to the rule. Also, transferring and managing capital can be easier with the major banks, which have branches across the country.
I recently received an invitation to follow a business associate on Twitter. Is there really a good reason to use it? —Rick P., St. John’s, Nfld.
Well, Twittering sure beats working—although working pays slightly more. The SME owners I spoke with were divided over the utility of Twitter, the popular micro-blogging service that allows users to blast out short messages to their “followers”—people who’ve subscribed to receive their “tweets” on their mobile devices. Twitter could be a cost-effective tool for building brand awareness and communicating new product or service announcements. Budget airline JetBlue, for example, sends tweets containing travel tips to its clientele, while Home Depot solicits customer feedback via Twitter. But the jury’s out on Twitter’s utility for smaller businesses. Stuart MacDonald, the founding GM of Expedia Canada and now CEO of Toronto-based vacation website Tripharbour.ca, sees it as a highly valuable tool to interact with customers and understand their service needs. Others argue that for business-to-business dealings, Twitter is a novel but ultimately frivolous tool for client communications.
I sell North American-made office furniture and need to convince customers that cheaper offshore imports aren’t always better. How can I compete? —Andrew L., Uxbridge, Ont.
Stick to your guns. The manufacturers and industry analysts I spoke with recommend that you build brand strength and customer loyalty with top-shelf product designs, quality and service. For instance, Jayson Myers, president of Canadian Manufacturers and Exporters (which promotes the interests of firms like yours), advises you distinguish your firm from cheap offshore competition by offering high-quality goods and developing complementary services, such as office design. After all, there will always be customers with high-end tastes and an eye for functional goods that will endure wear and tear. And don’t forget emerging markets such as Brazil, China and India, which, according to Myers, offer huge growth potential outside the domestic market. Their economies are still on pace to grow even as our recession rages, which will sustain their demand for goods from countries with long traditions of quality craftsmanship—like Canada.