It's time to meet the merchants, not the puppets.

To appeal to business customers, Mercantile Bank of Michigan stopped producing consumer-oriented YouTube videos featuring a puppet called Winston and began using a more compelling cast of characters: its business clients.

"On the retail side, [YouTube videos] have to be more fun and conversational, and on the business side they have to be more professional and information-driven," says Michelle Shangraw, director and senior vice president of retail banking at Mercantile.

So far, Mercantile's attempts to reach businesses through YouTube, the video-sharing site run by Google (GOOG), are largely promotional — business customers that are pleased with Mercantile talk on camera about how wonderful the bank is. Mercantile also includes a handful of informational videos, such as one that demonstrates how to use remote deposit capture, a technology that enables customers to use scanned images to deposit checks.

Mercantile's strategy is giving it better access to its 2,400 business clients, the bread and butter of the bank. Mercantile, of Grand Rapids, has used social media sites such as Facebook, Twitter and YouTube since 2009.

Initially, the bank, which has $1.4 billion of assets, used YouTube to make the claim to potential retail customers that it wasn't just any commercial bank. It uploaded about 50 videos that got about 13,000 views.

Mercantile began adding videos tailored to business clients this year.

"What better way to use YouTube than as an on-demand video [channel] to demonstrate to a small or midsized business different products or services, or post-sale, using it as a training video?" says Ron Shevlin, senior analyst at Aite Group.

In using YouTube, Mercantile is on the crest of an important wave of business-to-business videos that much larger banks began riding in the past year or two.

RBC Wealth Management, a unit of Royal Bank of Canada (RY), launched an internal video site called Springboard last summer. On Springboard, the bank's most successful financial advisors share advice on marketing and customer engagement.

Similarly, Citigroup (NYSE:C) uses video for its global transaction services unit, which caters to institutional investors. The unit created Marketguide, an internal video channel that features content developed by Citi experts for capital markets clients; it also created something similar for its CitiDirect BE trade and cash management platform.

Banks that choose to make their videos public could certainly offer them on their own sites. So what's the attraction of YouTube. It hosts videos for free and it makes the content more accessible to those who are searching for specific topics on search engines, experts say.

"If you are creating the content on your website, why not put it on YouTube? … You are getting the name out there, which can only do good things," says Alan Maginn, senior analyst for consulting services for the social media research firm Corporate Insight.

To develop its videos, Mercantile hired a Chicago college student, whom the bank discovered after viewing his own postings on YouTube.

River City Bank of Sacramento, Calif., outsources its video work to a creative firm at a cost of less than $20,000 per year. The bank's videos are something of a hybrid between what Mercantile Bank creates and the dedicated internal videos that are put out by RBC and Citigroup.

Like Mercantile, River City is also a commercial bank with about $1 billion of assets and about 1,000 business customers including doctors' and lawyers' offices, agricultural businesses and manufacturers. River City has created about 30 "Ask Steve" videos, named after the bank's chief executive, Steve Fleming.

Fleming has been the bank's CEO since in 2009, and he started posting videos around that time to introduce himself to the bank's customers.

The videos, which appear both on YouTube and on the bank's website, are in the style of short newscasts where Fleming addresses issues such as the solvency of the bank, the impact of low interest rates on investors and other questions of interest to the Sacramento business community.

"YouTube gave us a chance to tell [our business customers] how we were doing, and it let us do it face-to-face with them," says Wendy Duer, senior vice president of marketing at River City. The videos have garnered about 19,000 views, she says.

"YouTube is the second-largest search engine, and it gives us access to prospective customers and people outside of the bank who might find the [video content] interesting," Duer says.

Mercantile has also found uses for video outside of YouTube. For example, it puts video content on tablets that it uses in branches to explain products to small-business owners. It has done this with its Bill Pay Plus product, a white-label service from that assists small-business owners with accounts payable and accounts receivable. created the video.

Mercantile may soon add informational videos like it to its YouTube channel, Shangraw says.

"People would rather watch something that is one to two minutes long as opposed to reading an article or a couple pages of material," Shangraw says.

For a YouTube channel to be successful, banks must organize it almost like a playlist of songs. New customers could click on a playlist of introductory videos, for example, whereas existing customers could watch the testimonials or product walk-throughs. "Banks can look at this as part of pushing information out about what they do," says Stessa Cohen, research director of banking industry advisory services at Gartner.


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