• 1. Lack of growth
  2. Increased competition

Of course, lack of growth is really how your organization describes it (number of clients, value of client portfolios, spend per client, etc)

No matter how these headwinds affect your business, it’s likely that your market has reached some level of maturity, although disruption is increasingly likely from both small startups and large, well-funded incumbents.

Prospering, as every entrepreneur knows, is a game of constantly adjusting – fine tuning strategy.

There are seven strategic options that can be taken to protect and build market share – many of which have already been done (or are underway) by the deep-pocketed incumbents in each industry:

1.  Improve loyalty with existing clients

• Keep the customers that you have!
• Build loyalty in ways that are difficult to replicate by your competitors (who will be chasing your clients).
• Consider adapting innovative technology – and find a way to push this technology as close to the customer as possible.  Successful examples are Robo Advisors in the financial services space, and custom-ordering systems developed by building materials manufacturers and made available to distribution partners.
• Improve your level of service – consider hiring an outside firm to monitor client satisfaction and engagement and monitor NPS religiously.  Implement service guarantees on the aspects of service you can control (eg: “one hour call backs”), and generally challenge and refocus the business on its core competence
• Communicate frequently, and effectively with your customers.  Know who is engaged (and who isn’t), and have follow-up plans in place to re-engage the non-engaged clients and a plan to sell-more of your services to the very-engaged clients.
• Implied in this strategy is a plan to increase penetration by selling more to the customers you already have.  Credit Unions are an interesting example of financial services firms with ‘wide but shallow’ penetration of their membership base.  With many clients, industry stats show less-than-optimal penetration rates in the areas of mortgages written, savings per member, and other key stats.

2.  Build – or acquire – complementary services or brands to attract new clients

• This strategy tends to be more complex, time consuming, and potentially expensive, as the intent of the new services will vary by market and core-brand.
• A good example might be Scotiabank‘s use of Tangerine to reach out to a completely different market segment.  While still aligned with the main-brand’s core competency (banking), the online brand targets a different demographic, and brings new business to the bank.  It can be argued that it ‘competes with itself for market share’, but the point is that it also competes – successfully – with other competitors in the market.
• By targeting very specific segments – and building specific solutions via ‘fighting brands’ financial services providers attract new clients, without damaging their core business.  Examples might be: a mortgage broker that partners with a fintech to drive mortgages from the U35 crowd, a wealth advisor who partners with a fintech to provide a unique service to a unique need in the market, an insurance provider that specializes in providing insurance for first-time car buyers, etc.

3.  Communicate benefits-of-use more effectively to increase referrals and inquiries

• How many times do we see or read data or publications from financial services providers that are filled with jargon?  Words like ‘amortization’, ‘compounded’, and even ‘interest’ may or may not be suitable for the intended reader.

We need to challenge ourselves and each other with two simple questions: 1. “Who will be reading this?” and 2.”Are we sure that they understand this stuff?”

• We also need to consider how we can control published messages more effectively, by providing more context.  Every day we hear that the ‘the markets are up/down by 25 points’ (for example) – but rarely is the information accompanied by an explanation as to the reason for the movement, or even rarer, what we should do about it.  An investment advisor could easily publish these insights, along with other (perhaps more provocative thoughts) that inspire sharing, attending in-person events, etc.
• Publishing opinions to social media platforms is a good start.  Shaping those opinions and distributing them in a way that educates clients and prospects so that they actually generate leads is really the gold standard.

4.  Lower your prices, or get ahead of the curve on service

• Mortgages are an example of a financial service that has become commoditized.  The game now is to shop the market for the lowest possible rate/best terms, and sign asap.  While this may be buyer-centric, it’s a tough business model to sustain, because it’s essentially a race to the bottom.  And as regulations tighten and brokers consolidate, the race is getting faster in that sector.  Something will give – bottom-feeding will be it.  If you can, introduce services – to differentiate yourself away from the most price-sensitive aspects of your offering.
• Mogo has developed a unique new ‘service forward’ feature to their online mortgage platform, where they promote the fact that they celebrate milestone events (like paying off the first year of the mortgage) with their client in unique and creative ways.  Like the fighter brands discussion above – look to brand differentiation as a way to ignite change.
• The advent of robo advisors threatens the wealth management industry in much the same way.  While segmenting the market is a good approach (eg attracting just high net worth clients), in the end it could have the effect of fostering increased competition in those segments.

5. Consider an acquisition, JV, or alliance

• Long a practice in the financial services industry, the opportunities – the necessity – to reach across normal alliance-partners exists even more due to the advent of fintech.
• Non-traditional partnerships that might be considered include with firms in the publishing, marketing, and association sectors.

6.  Grow the size of the market

• While this is a nice thing to do, it’s likely one that will be determined by societal shifts, regulatory changes, or other external issues.
• For financial services providers in local or regional markets, the best strategy may be to identify and pursue under-serviced segments.  Pursuit will likely involve development of unique-to-market/buyer products, and identification of strategies to engage current non-buyers (look to youth and recent immigrants as a first step).

7. Find and cultivate more clients from your current prospects

Arguably the most effective strategy is to re-qualify your entire prospect database, to identify buy-ready prospects.

• This process takes substantial planning, but can help the firm get the ‘jump’ on its competitors, by having sales people make calls as the leads are just beginning to display buy-readiness.
• Elements of this strategy include a complete sales development, and content marketing campaigns, powered by marketing automation software

We’re serious about strategic growth – in any market.

Let’s talk.