Agricultural and forestry business owners’ perceptions of banks

Abstract: Over the course of the past the agricultural sector has been characterized by radical market changes. Changing market conditions have forced owners of agricultural and forestry businesses to make further investments. This increase in investments has led to a greater need for external capital, which has increased the relationship between banks and owners of agricultural and forestry businesses. The financial sector is characterized by strong rivalry, which forces banks to create strategic positions in the financial market. Since agricultural and forestry businesses are generally seen as secure customers by banks, due to high property and land values, the competition between banks with agricultural and forestry businesses as customers has amplified. In order for banks to implement suitable strategies that will attract agricultural and forestry businesses, they need to maintain knowledge about the perceptions and expectations that agricultural and forestry businesses owners have of banks. The aim of this study is to identify the perceptions that owners of agricultural and forestry businesses have of banks. The study aims at examining which aspects, service and product attributes that owners of agricultural and forestry businesses value the most in a bank relationship and why. This study has used a qualitative methodological approach, with the following interview techniques: the Zaltman metaphor-elicitation technique and the Laddering technique. Nine in-depth interviews were conducted with owners of agriculture and forestry businesses in order to explore different customer perceptions of banks. The methods were chosen with the aim to provide a thorough understanding of the respondents’ thoughts and feelings concerning a bank relationship. The findings of the study indicate that owners of agricultural and forestry businesses value soft factors in a bank relationship prior to e.g. low interest rate. The most important indicator for the respondents was the trustworthiness of the bank. The respondents wanted to be able to trust their bank and their bank contact. In order for the bank to be trustworthy the respondents require the bank to obtain knowledge about the agricultural and forestry sector, the respondent’s individual business and personal characteristics. The bank and the bank contact should also act professionally, think long-term and act as a business partner. The respondents highly value one well-established bank contact for both private and business matters and to have personal connection with the bank contact. If the respondents trust their bank contact the respondents feel comfortable in a bank meeting, a more open dialogue can be exchanged and they are more likely to become long-term customers. Additionally, if the respondents trust their bank they are able to feel good, relaxed and safe.