This is going to be the final post on this series. I hope you have found this to be very informative. Did you miss any? You can read part 1 & 2. see links here https://www.lawrenceobi.com/Part 1
and part 2 https://www.lawrenceobi.com/Par 2
Someone talked about segmentation and not participating in every market. Yes that’s true but what most banks also do is they outsource management of some segments to third party providers or partner strategically. Because those segments might not be their core or it might be expensive managing and acquiring the customers there. Banks understand partnership, so they look for strategic partners to push certain kind of business to their market while they just provide support. So this could be the case for you in your business, Partnership is key. Let me also emphasize that it depends on your business model and what your business goals are.
So to the main discussions.
3. They look for where the crowd gathers
Banks don’t just open branches anywhere, they look for where the footfall is high and there is a genuine demand for banking service. With business presence and a lot of commercial activities and the banks can recover or break even in less, within 12 months or slightly more. Because it’s very expensive to start a new branch. Banks don’t want to waste funds, there must be business case that will justify the investment. Even in the bible it says who wants to first build a house and not count if he will be able to finish it. You must justify your investment in any business or even location. So, do the simple maths, project and show the potentials, banks don’t joke with that. This doesn’t imply that some of the banks have not made mistakes, in fact some have even closed or merged some of their locations as it turns out to be unprofitable over time.
I have handled a lot of financial projects both local and international and as the project manager of these projects, I must always show the business case and why we need to make that investment before the sponsor approves, nobody wants to throw his money away based on speculations there must be data to back it up.
That’s why you see banks like GTbank don’t open branches like every other bank, they are very strategic in their investment and they always get it right.
I believe that before you start a business or sell any product, you must be able to identify your market and where you will get the maximum of your customers, do the analysis and consider the size and their impact on the product or services you are about to launch. If your customers are on social media platforms, there is no need investing hard earned money on physical locations except there will be a general impact on your brand or product.
in a nut shell, identify and follow where the most of your customers are and pitch your tent there.
4. Always Concerned about Operating Cost:
Banks understand the impact of operating cost, so they don’t joke with it, that’s why you see that banks can sack thousands of people without blinking an eye lid. Because operating cost can wipe out all your income and put you in a loss-making position, they always seek ways to reduce cost and one of the easiest ways is to reduce the workforce. I don’t always agree with their style though, but this happens regularly. You won’t understand this except you are running your own business. I never understood this until I started running my business, a lot of cost were just dropping on my table, so I started watching all our expense lines and you know what? apart from power especially in Nigeria, staff cost is one of the highest.
As I close this series I will say, don’t just stop where you are, keep improving, keep growing and make a difference
I appreciate all who liked, made comments and shared their perspective. If this series have been very helpful, please share with your friends and on every platform. Also drop your message for more conversation
To Your Success