There have always been two major ways to expand your business: Grow it, or Buy it. This brings up some interesting questions about which is more beneficial. The correct answer is usually based on cost of customer acquisition and customer lifetime value. Right now, with the cost of client acquisition being so high, companies are turning to buying distressed businesses. One, it eliminates competition, and two, the customers can be acquired “on sale”. While mergers and acquisitions are common across all industries, there seems to be a significant propensity for growth by buying in the banking industry.
The unique problem that is causing an increase in the ” buy them” thought process is that in banking their revenue generating power has dwindled with the decline of interest rates. Not only that but as clients leave for competitors by natural attrition, there is a dire need for new customers. Buying seems to solve both of these.
While it may solve the issue of new customers at a reduced cost, how to transfer the old customer base to the new bank has always been a major problem. First, you have a bevy of new customers who have not gone through your buying process. You have no idea who they are and why they are in the product they are in. Secondly, you can fix problem number one by keeping the staff from the bought bank, but they’re not sure if the customers are in the correct products anymore either because they don’t know what products they have to sell. (more…)
All posts tagged: Customer Churn
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Predictive Analytics improves M&A Activity
Net New Sales: Sell More by Selling Less
“Selling more by selling less”, is a phrase that most salespeople write off. They can’t believe that you can increase sales by focusing less on acquiring new clients, and more on your current customers. This is a basic misunderstanding and over simplification of the sales equation. Most salespeople focus only on new people. They fail to recognize the huge crowd of people that have already decided to become clients. They forget about their current clients. They have already been sold, and are waiting to be called again. But you have already sold them you say? Sure, weeks, months, and sometimes years ago. Don’t your think they are ready for something else? They are. Salespeople just don’t know how to resell to someone that already knows their game, and therein lines the trouble. Learn how we helped increase customer loyalty by reselling current clients.
Sales is not about new sales, it is about net new sales. To increase net new sales, salespeople have to also be concerned with reducing the number of their current clients that are lost each month to customer churn.
Current clients. I find it fascinating that sales people never think of their current clients as leads for more sales. I think this stems from bad Customer Service Management systems that do not allow salespeople to keep track of when customers are ready to be sold another product, and management’s lack of understanding about how salespeople should be trained and compensated. But why? Why cant sales people just focus on new sales. Because new sales are only half of the equation.
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