Is it better for OakNorth to focus on acquiring new SME clients or deepening relationships with existing enterprise customers?

Introduction

The trade-off question at hand is whether OakNorth should focus on acquiring new SME clients or deepening relationships with existing enterprise customers. This scenario involves balancing growth strategies for a fintech company serving both small-to-medium enterprises (SMEs) and larger enterprise clients. To address this trade-off, I'll analyze the current situation, evaluate potential impacts, and provide a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on the business context, I'm thinking our revenue model might be subscription-based with additional services. Could you confirm our primary revenue streams and their relative importance?

Why it matters: Helps prioritize acquisition vs. retention strategies Expected answer: Subscription model with upsell opportunities Impact on approach: Would influence focus on new clients vs. expanding existing relationships

• Considering user impact, I'm assuming we have different product tiers for SMEs and enterprises. Can you outline the key differences in features and support between these segments?

Why it matters: Identifies potential for cross-selling or upselling Expected answer: More advanced features and dedicated support for enterprises Impact on approach: Could reveal opportunities for moving SMEs to higher-value tiers

• From a technical perspective, I'm curious about our platform's scalability. How easily can we onboard new SME clients compared to expanding services for existing enterprise customers?

Why it matters: Assesses feasibility of rapid expansion in either direction Expected answer: Scalable for SMEs, more complex for enterprise expansions Impact on approach: Might favor SME acquisition if significantly easier to scale

• Regarding resources, I'm wondering about our current team structure. Do we have separate teams for SME acquisition and enterprise account management, or is it a shared resource pool?

Why it matters: Determines flexibility in resource allocation Expected answer: Separate teams with some shared resources Impact on approach: Influences ability to quickly shift focus between strategies

• Looking at timelines, I'm thinking about our fiscal year goals. Are we under pressure to show short-term growth in client numbers, or is there more emphasis on increasing average revenue per account?

Why it matters: Aligns strategy with immediate business priorities Expected answer: Balanced approach with slight preference for revenue growth Impact on approach: Would help prioritize between quick wins and long-term value creation