The financial services market is fast evolving, as challenger banks encroach upon the established high street banks’ traditional markets. However, while the challengers are slowly making inroads into market share, there is still a long way to go before it is a level playing field.
As Enterprise Account Director at Avention OneSource® Solutions, I work with a number challenger banks and am often asked the same sort of questions by their business development teams. Unsurprisingly they’re most concerned with how to gain an edge in new customer acquisition. Using data tools to understand potential markets, prospective customers and the industries in which they operate is absolutely vital to gaining this edge, so I wanted to share some of the advice I give to the most common questions.
Q: How do I find potential clients?
KS: It’s likely that you’re responsible for business development in a specific region or industry sector, and the first step to success is understanding which organisations sit within this territory (or ‘patch’). A vital tool for this is the use of a data platform which helps identify and segment companies that sit within a certain patch. In today’s digitally focused world there is so much data available online, and by using the right tools, you can quickly analyse which companies sit in your patch, what industries the companies operate in, and what levers are driving these. This information can be cut to match your bank’s corporate client base, say £20-£50m, or business banking base, £500k-£2m, as well as segmenting by financials like operating profit, assets, EBITDA, etc.
Ultimately, you need to know who to talk to at a prospect company and when to approach them. So while a static list is a useful starting point, using a dynamic list can help you achieve much more when it comes to prospecting. A dynamic list will continuously update your target database as corporate information evolves, and some platforms, like Avention’s OneSource platform, allow you to integrate triggers that alert you to a company’s corporate activity, like management changes, new office openings, acquisitions, client wins, results, etc. These signals can give you a reason to make contact with a prospect, with a pertinent and insightful reason for a call or an email that demonstrates your understanding of the company and its sector.
Q. How can I incorporate my professional network to generate new leads?
KS: Advisors like accountants can be a good source of leads or associations for challenger banks. For example, if you have a good client relationship with the auditor of an existing client, you can search your target market to look at who else they audit in that sector – all of this information can be found in a business intelligence database. From here the information can be segmented by region, sector, cash flow and debt leverage – enabling you to build up a picture of mutual customers, and potential customers to target or ask for a referral or introduction from their other advisors.
Q: How can I keep up to date with growing companies in my patch? What should I be looking out for?
KS: We are putting a lot of effort into training our customers in this area, as we can help them have far more meaningful business conversations with high-growth companies, which in turn helps them to win business and become a strategic partner.
The important thing to remember is that companies’ growth will change over time. So while a potential customer may be experiencing a period of rapid growth that could indicate a need for additional funding, this growth may slow and the company would no longer be an ideal target.
Buying a static list means the likelihood that the company continues to fulfil the criteria will decrease as time passes. However, by using a dynamic list that’s continually updated based on what companies are doing (including those that are enjoying rapid growth), you can be far more confident that your target prospects will always match your criteria.
For instance, OneSource can provide information about whether companies are launching new products or expanding into new territories, as well as any executive changes. OneSource Triggers go way beyond Google Alerts and provide much deeper insights into your target market’s activities – enabling you to keep abreast of the fastest growing businesses in the sectors or regions you are following.
Q: Do you have any recommendations for other types of data that can support new business targeting?
KS: One thing that my customers using OneSource really like is the ability to monitor and review the Mortgage and Charges register of a company. It means that you can find out what long terms debts exist at a company and who that debt is owned by, enabling you to analyse how you can make a competing offer or provide financial advice to prospects. This means you can then call them with something tangible to discuss and offer.
Q: Should I compare companies in my patch against their peers?
KS: I would say that this is really important. When looking at companies of interest, it’s really useful to be able to benchmark them against their peers according to data such as turnover, balance sheet, cash, etc. This gives you a good indication of how strong an organisation might be within its industry sector and is a key instrument for anyone providing financial services. By understanding what a peer group’s credit line should look like, if a particular company looks out of step compared to its comps, then it may warrant further questioning, and this type of insight can make the difference when trying to get trust and time from prospects.
Q: How do I find companies similar to those I have just sold to?
This is an important practice in any sales organisation (particularly in a regional set-up), with the principle being that if you have just sold to one company that provides a certain service or product, you should seek out and approach comparable organisations . By using a business insights provider, you can match prospects against their sector credentials and relevant experience. It’s a warmer way of going in and opening up a discussion: “We work with X and have helped them achieve Y, and we’d like to talk to you about some areas we believe we could help you with…” You can segment in a number of different ways, such as by industry sector, turnover, number of employees – or even whether the company is acquisitive – to find relevant information that enables you to tailor your pitch.
Q: How can I help manage risk in my existing portfolio?
KS: I would encourage you to look at the parent companies and subsidiaries of your customers since activity here could have repercussions. This should be a key part of portfolio management – building a system that you can use to look across your portfolio of accounts and help identify key risk indicators. These could be triggered by M&A activity, executive changes or significant movement in credit risk or key financial points. One of the most effective ways do this is to upload all your accounts onto a platform such as OneSource and then set up relevant triggers. These triggers can send alerts daily or weekly, depending on preference. This is a highly useful risk management tool, used by both established banks and challengers to monitor key customers.
As all my customers in this industry will attest, demonstrating sector expertise is absolutely vital to winning new business. There’s a huge amount of business information generated every single second, and challenger banks need to be able to exploit this if they are going to steal market share from the banking behemoths. There are tools out there that can equip you with these insights; get in touch if you’d like to know more.