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The Art of Battling Giants

How can a small fintech and services firm compete with their larger competitors? This is probably the one question I get asked more often than any other by CEOs of smaller technology and fund administration firms. Considering their global multi-solution competitors with their vast marketing budgets, sales resources and account teams, it seems like a grossly unfair playing field. However like Saint George and his Dragon, David and his Goliath, compete you must and win you can – by standing firm and unintimidated by your competitors’ size and focusing on your strengths and their weaknesses. All is not lost For a number of large firms in the sector, particularly fintech firms, sales and marketing costs eat up well over 50% of new revenues every year. A phenomenal portion of this spend is wasted on activity that doesn’t provide a return on investment. It isn’t difficult to name the top fintech and services firms in our sector but can we name their solutions? No is typically the answer. Millions of sales and marketing budgets are spent each year on corporate name recognition and mass marketing campaigns that reinforce the ‘vendor’ label rather than instilling the comfort and trust we associate with a trusted advisor. A scenario we are all familiar with – highly targeted sales people desperate to make quota rushing around the market looking for the next deal, the next buyer. It is simply not in their DNA to invest in people who are not buying and neither is it in their best interest. Turn these lessons in your favour So what are their weaknesses? Put simply, it is that they have engineered such a high level of complexity in their sales and marketing strategy that they have lost sight of the fact that they operate in what is effectively a niche market, a market with an identifiable and manageable universe of mainstream buyers. It is important to acknowledge that even the largest firms need only build relationships with a few hundred target organisations (one of the largest market data vendors in the world acquires 80% of its revenue from 70 clients). Instead, the marketing department churns out campaign after campaign, much of which misses the mark. Sales is no better. Along their growth trajectory, they lost sight of how they started – by having relationships with the market. Their weakness is your strength Don’t try and compete with them – change the rules. Segment your market. It is unlikely, for example, that you would define your market as the ‘buy side – full stop’. Applying some simple qualifiers like geography, firm size, and current supplier. Once you’ve accomplished this, you should be left with a smaller, more manageable number of firms. Recognise that in each of these firms there is a small number of people who are change agents, whose decisions start buying processes and for this reason they are often called ‘starters’. It’s reasonable to expect that a list of key people within these firms would amount to a manageable list – probably a few hundred people and certainly less than a few thousand. That being the case, you don’t need to spend thousands on PR, events and exhibitions in the hope that they might read an article and call on. You don’t need to hire another sales person to find today’s buyer only to lose the deal to a large better known ‘vendor’. What you do need to do, and what your larger ‘vendor’ competitors are not, is to put in place a strategy that identifies and qualifies these people and then cost effectively builds and maintains relationships with them positioning you as a trusted partner / specialist. The distinct advantage – when they come out to buy – is they will know you and you them.

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