MOVING ON THE
MIDDLE MARKET
K
WHAT'S NewS Issue 6 October 1995
market news
7
Aggressive marketing based on sound regional expertise
forms the key to the bank's strategy for tackling a domestic
market where we currently occupy a third position. While
Rabobank is extremely strong in the SME and increasingly
prominent in the larger corporate markets, the so-called
middle market is almost virgin territory. Rob Hartog talks
us through ongoing plans to increase our current
10 percent market share.
'The reason for our relative absence from
this market is historie,' he says. 'Essen-
tially, we were an agribank. In the 1960s,
we moved strongly into urban areas in
order to cover the savings market as a
base for our lending. We were extremely
successful here and a natural progression
was into local small and medium-sized en-
terprises. At the same time, Rabobank
Nederland was also moving into the upper
market. But we never truly defined policy
^■or the middle market.'
So what exactly is the middle market? The
policy document on which the new strat
egy is based describes it as: Clients and
prospects whose financial services require-
ments are so varied and complex that they
require a more than average knowledge of
products, markets and sectors. 'You could
also define them as companies with a
turnover of at least NLG 20 million and
more than 20 employees,' Hartog adds.
mm MIDDENMARKT
mm Rabobank gaat actief de midden-
markt bewerken. Momenteel heeft de bank
slechts 10 procent van deze aantrekkelijke
markt in handen. Door de overheid zijn on
langs tien economische groeiregio's aange-
wezen. In al deze regio's zullen teams be-
^^staande uit drie ervaren accountmanagers
en een ondersteunende persoon worden in
gezet. Zij zullen vanuit een van de grotere
plaatselijke banken in hun regio nieuwe
cliënten voor de bank moeten winnen.
The bank's study on the global Sugar and
Sweeteners is now available from Marketing
Services,+31 (0)30 216 2804.
Most of these companies are exporters.
That means they have all kinds of often
complex needs. Our local banks, cannot
possibly be expected to have that kind of
know-how. So, I'd say they've done pretty
well to get the market share we already
have.'
But the bank clearly wants a bigger slice
of this particular pie. And it is prepared to
put its money where its mouth is. The
middle market project will have a time-
scale of around five years and will be re-
cruiting at least 50 highly qualified new
staff. 'The strategy we have developed is
aggressive,' Hartog says. 'The government
has defined 10 economie growth areas
around the country. We are planning to
put in place a specialized team at one of
the large member banks in each of those
areas. The teams will consist of three ac
count managers and a support staffer.
Their job is to bring in new clients by first
defining prospects in their particular
region, discovering what these companies
need and coming up with solutions. They
can bring in specialists if needed'.
Hartog explains: 'They will have to have
indepth knowledge of the region, know
how in the main sectors located there, and
an equally sound insight into the bank's
products. 'So, we are busy recruiting the
first group of five teams now. We're trying
to find them within the local banks them-
selves, in Utrecht and, of course, outside.
If we are going to achieve our goal of
doubling market-share within the space of
five years, then we have to bring in a very
powerful sales force that is at least as good,
and even better, than ABN Amro's. It's
rather like when opening a new branch.
They are the main competition as they have
60 to 65 percent of this market, while ING
is second player with about 20 percent.'
Mark the evening of December 1 in your
diary as it is party-time for CBSers. Look out
for the program and international activities
in the next issue.
The first five teams should be in place
early in the new year. 'Our focus will be
new business, new business and more new
business,' says Hartog. 'We will be aggres
sive and consistently persistent. But we're
also a relationship bank, so we know it
will take time to build the kind of con-
fidence essential to this kind of relation
ship. There are 10,000 companies in this
market in Holland. We currently work
with only 10 percent and our target is at
least 20. We also know it's not going to be
easy but at the end of the day, this is not
really a basis-point business. We have to
prove to this market that we are the best
relationship bankers in the country.'