Efficiency gains are created through specialisation. To create synergies and exploit economies of scale, your fiduciary company should focus on specific client segments. The basis for this is careful customer segmentation. In this blog post, there are tips for your customer strategy.
For a long time, people talked about economies of scale, especially in the manufacturing industry: As the production volume increases, the cost price per unit decreases. For the manufacturing company, this means higher margins, more market share – or in many cases both. The causes of the scale effect are efficiency gains in production through specialisation or automation, marketing advantages, learning effects, greater purchasing power vis-à-vis suppliers and the degression of fixed costs. But it is not only companies in the manufacturing sector that can achieve economies of scale; fiduciary companies also benefit from specialisation and automation.
If you outsource repetitive accounting tasks such as processing receipts, sub-ledger reconciliations and generating reports to Fiduciary software you save valuable working hours. A fully automated accounting solution without software breaks completely eliminates the need for manual data entry, reducing the effort involved in accounting to control tasks. If your fiduciary company concentrates on mandates with similar process flows, the cost price per unit will therefore fall due to the economies of scale. In fiduciaries, the time spent per mandate thus represents the economy of scale. This enables fiduciaries to devote more time to looking after clients and acquiring new clients. With an increasing number of mandates thanks to the additional efforts in the area of client acquisition, your fixed and standby costs such as rent, wages and software licences are in turn spread over more projects. This reduces the costs per project and creates a so-called fixed cost degression.
Reading Tip: To what extent is the business model of fiduciary companies changing as a result of advancing digitalisation? In our Whitepaper “The way to a digital fiduciary”, you can read how fiduciary companies can best exploit the potential of digitalisation.
These are the questions you should answer for customer segmentation
In order to exploit the economies of scale mentioned above, it is advisable to focus on certain company characteristics such as industry, number of employees, legal form or life cycle phase. For this purpose, carry out a customer segmentation. Determine which client segments your fiduciary company can and wants to serve in the coming years. Answer the following questions:
- Who are your ideal customers? What do they have in common in terms of industry affiliation, company size, company form or business model?
- What makes a mandate exciting for your fiduciary company?
- What are the needs of your current and potential clients? Can your fiduciary company meet these demands in the medium term?
- Where can you offer your customers real added value?
- Is there any customer segments you do not want to work with (anymore)?
Find out what challenges your existing and potential clients face in their daily work and how your fiduciary company can support them. When developing new offerings, consider the needs of those client segments on which your fiduciary company wants to focus in the future. With innovative and client-oriented services, your fiduciary company can stand out from the competition and strengthen its position in the market.
When promoting your offers, it is also essential to know and understand the target group. Only then can you determine the right communication channels and plan marketing measures. Do your potential customers primarily obtain information from industry magazines or LinkedIn? Where is the best place to get in touch with interested parties again? Do you need search engine advertising to reach your target group? The more homogeneous your existing and potential clientele is, the more you benefit from economies of scale and learning effects in marketing as well.
Customer relationships do not have to be continued at any price
If your fiduciary company focuses more on the most profitable client segments, you can achieve higher margins due to the economy of scale, as described above. When defining a client strategy, you may – and should – also consider whether it is worth continuing to work with all existing clients. In view of the increasing complexity of fiduciaries, smaller fiduciary companies in particular are unlikely to be able to serve all client segments effectively and efficiently in the future. As a result, certain mandates may no longer fit with your fiduciary’s new direction or way of working. That may be. Remember: only those who work in a focused way can achieve economies of scale. Giving notice to clients can be difficult. Thank them for their cooperation so far. But show why you can no longer look after a company as you would like.
What are the benefits of being more client-centric for your fiduciary?
Closely related to more focus is greater customer centricity: If your fiduciary company focuses on selected client segments, this allows for greater client centricity. This means that your existing and potential clients will increasingly come into focus. Customer centricity can increase sales, the loyalty of your customers and the recommendation rate.
Extra Tip: With the right fiduciary software, you have a stable and secure platform to reduce the time spent on routine activities and instead create, promote and bill for more client-centric services. Experience in a free live demo how the Swiss fiduciary software Accounto helps you to work in a more focused and client-centric way.
In practice, it is often easier and cheaper to retain existing clients than to attract new ones. Therefore, develop the relationship with your clients and lay the foundation for up- and cross-selling. Up-selling means offering more sophisticated services than before and cross-selling is selling additional services. When up-selling and cross-selling, your fiduciary company can in turn support economies of scale.
