Growing a business means working with more clients, data and resources, and firms should be able to handle these
In the corporate environment, a scalable company is one that can maintain or improve profit margins amid increasing sales volume. In financial markets, being scalable means that a financial institution can handle increased market demands.
Whether in a financial context or within the context of business strategy, scalability describes a company’s ability to grow without being hampered by its structure or available resources when faced with increased production. The idea of scalability has become increasingly relevant in recent years as technology has made it easier to acquire customers, expand markets, and scale.
What makes a business scalable?
At its core, a scalable business focuses on the implementation of processes that lead to an efficient operation. The workflow and structure of the business are what allow for scalability.
All scalable companies have an established group of leaders, including C-level executives, investors, and advisors, who provide strategy and direction. Scalable businesses also have consistent brand messaging across their divisions and locations. A lack of brand enforcement sometimes causes companies to lose sight of their core value, thus decreasing their scalability.
A scalable company also has affective tools for measurement, enabling the entire business to be assessed and managed at each level. This management leads to efficient operations and helps with capital budgeting – the process that a business undertakes to evaluate potential major projects or investments, according to Investopedia.
Why is scalability important?
As businesses grow, their main objective is to continue to meet market demands, which are never static. These demands shift as people’s needs and wants change and as resources flow in and out of availability. To be able to meet those demands and stay competitive, businesses need to change what they do.
Scalability matters because business growth means working with more clients, data, and resources. Those who cannot handle these increases might lose their efficiency or see the quality of their products and services suffer, which can lead to poor client relations and a lowered business reputation.
From a financial perspective, scalability is crucial because it lowers what a company ends up paying out. For instance, if you have 100,000 clients and buy a technology system that can support a million clients, you do not have to replace that system (assuming it still functions well mechanically) when you reach 200,000 clients and above. Likewise, if you buy state-of-the-art equipment, it will not quickly become outdated, and you will not need to put money into new hardware for a while.
All businesses need to be scalable on one or more levels to hold onto and build market share. However, small businesses must be particularly mindful of scalability, as they have the biggest potential for growth and need to maximize the return with resources.
It is natural for small businesses to want to make as many areas as scalable as possible, and business leaders should work toward that goal. Still, they should recognize that not everything might be scalable. A lack of scalability in one or more areas does not necessarily stop them from moving forward, but it does influence how they approach their system design, equipment purchase, and even talent acquisition, according to Touch Support.
How do you scale a business?
Here are the top ways to increase your books of business:
Social media outreach
An increasing number of financial services companies and professionals see an unprecedented opportunity to network, educate and engage with clients and prospects on social media. Seven out of 10 financial advisors are using social networks for business purposes, according to research by LinkedIn and FTI Consulting. Meanwhile, 56% of financial professionals surveyed by American Century Investments in 2014 said that they saw a significant business potential in social media, up from 44% five years earlier.
One way of using social media to reach out to clients and prospects is by publishing great social content, according to Salesforce.
When seeking options for financial services, the first stop for today’s customers is often online. Financial services brands are in an ideal position to engage with customers and social communities with great content to help them reach their respective goals. When you help them as a trusted advisor, it humanizes your brand and builds goodwill. While it’s not advisable to provide specific financial advice on social channels, there are still great ways to engage.
You should have a social media content plan that includes plenty of original utility content to serve your social communities’ needs. Creating an editorial calendar can help you keep a consistent content stream.
Security and privacy issues, combined with heavy regulations on financial matters, may seem daunting for financial services companies looking to venture into the very public social web. However, with the right technology and internal policies in place, you can secure your social profiles and maintain compliance. It’s also important to establish governance of your social channels with publication and approval processes to avoid posting content that may be off-brand or against regulatory compliance.
Many financial services firms are striving to use thought leadership to set themselves apart from competitors. However, few in the sector are being targeted enough in their content strategy – or bold and compelling enough in their point of view – to meet these objectives.
Here are some ways to improve thought leadership in the financial services industry, according to Longitude:
Gain deeper insights into clients’ needs. Consider undertaking primary research, such as round tables or interviews, or assembling a thought leadership editorial board to help focus your significant research programs on the areas that will add the most value to your target audience.
Be willing to share knowledge. Compliance headaches, the rapid rate of change in the sector, and resourcing issues are a few reasons financial services firms often err on the side of caution when including practical guidance in their thought leadership. However, if you frame it in the right way, your willingness to share insights and knowledge will be the key to winning your audience’s attention and trust.
Guide clients through uncertain times. Draw a line between delivering insightful thought-leadership content and giving professional advice to clients. In times of economic uncertainty, however, there are opportunities to take the lead in guiding industry thinking.
Keep pace with the sector. In the era of globalized and interconnected financial markets, the pace of change can be very rapid. Timely market insights and commentaries play a more critical role in helping market participants make decisions. There will always be a place for large-scale thought-leadership research that analyzes the trends influencing the sector. However, expert insights that shed light on more immediate events are becoming increasingly valuable.
Use targeted content to compete in growth areas. It can be tempting to cover every issue across your business with separate pieces of dedicated content. However, content marketing resources (and audiences) are finite, and in most cases, it is not possible to cover everything well. At the content-planning stage, you should evaluate every project – how it will support your growth strategy for the next year or two.