Many fintechs think their products speak for themselves – It’s simply not true. This article discusses the rise of fintechs in the UK and five classic mistakes they make regarding marketing – and some advice on how to rectify them as proposed by Harvest Digital.
Risen from the ashes of the financial crisis, UK fintechs have filled the gap left by a glut of cash-strapped high street lenders failing to innovate. Digital first with user experience at their core; none of the baggage of financial crises past; no mis-sold PPI or dodgy restructuring to tarnish their image, one might think they were onto a winner.
Most have ambitions of taking on the incumbents. Monzo, the challenger bank, for example, has recently signed up its millionth customer. “Our goal is to provide an account to everyone on Earth,” proclaimed chief executive Tom Blomfield in a recent interview. He has a point. Its bright orange debit cards have become a millennial status symbol virtually overnight.
The UK is a hotbed for fintech startups – a light-touch regulatory framework and tax incentives have created an atmosphere in which innovation can breathe. Most people couldn’t name more than five of these start-ups – and yet, according to EY’s internal analysis, on behalf of the treasury, over 1,600 fintech companies currently operate in the UK.
But not every fintech is Monzo, or even a bank. A plethora of firms working in every space – from international money transfer to retail finance; payment and compliance solutions to online mortgage brokering – are parking their tanks on the lawns of incumbents. But the failure rate is remarkably high. Fewer than 90 percent of startups productise their ideas, or are adopted by the potential users.
The reasons why are abundant – from burnout and fatigue to legal issues and misjudged overheads. According to the Confederation of British Industry, 14 percent of startups fail due to poor marketing. The thin line between life and death – success and failure – is the number of users one can get on board.
You could have the best product in the world, but if you don’t put it in front of the right people, in the right way, at the right time, no one will know about it. Through arrogance or insouciance, many fintechs think their products speak for themselves. It’s simply not true. Rome wasn’t built in a day, nor are incumbent-beating startups. At Harvest Digital, we’ve seen it all over the years. Here are five classic mistakes fintechs make regarding marketing – and some advice on how to rectify them.
Build or buy?
When your budget is tight, your company young and tech-savvy, building your ad operations in-house may seem a no-brainer; a cost-efficient panacea, devoid of the many trust issues plaguing the ad industry in the last few years. But in-housing can be perilous – a lack of skills and pre-existing relationships, plus an inability to match the price points negotiated at agency rates often spells doom for in-housers.
There are basic questions one should ask before DIYing. It is not a black and white decision. Is your finance team sufficiently ready and willing, skilled and agile, to handle hundreds of publisher relationships? Can your firm find the talent to replicate the expertise of a dedicated third party? Will you be able to evaluate the performance of internal teams as rigorously as you would an agency? If the answer is “no”, perhaps consider outsourcing.
When you’re in growth mode, efficiency is king. By having all digital channels planned and bought through a dedicated team of experts, advertisers are much better able to re-allocate budgets from poorly performing channels to better-performing ones. This is not to say that the same cannot be achieved in-house, but it is operationally more challenging – and if you get it wrong, potentially more costly.
There’s an old marketing adage about “cutting through the noise”, which in the fintech space stands the test of time. As you know, it is crowded out there. “Cutting through the noise” is hard when many firms, offering similar products and services, are chasing the same clients. Some creative targeting goes a long way.
Finding audiences based on location, demography and behaviour is a good place to start. Using sequential storytelling to show ads to a specific audience, in a particular order, using a defined frequency, and structured narrative is another. Important also, is failing fast, learning, and adapting. No two campaigns are the same. A dedicated third party can manage reach and frequency much more efficiently, and coordinate campaign timings and delivery more efficiently, recalibrating as they see fit, hugely increasing your chances of success.
Startups want agencies that reflect their own work, ethos, and output. For lean, digitally native brands, which thrive in a climate of innovation, the intransigence of a slow-moving behemoth has limited appeal. The advertising industry is going through a similar transformation to banking. The oversized ad networks of the eighties are learning the hard way that they are not agile enough to serve digitally native firms. So why then would you approach WPP to push your message? That’s like approaching RBS for advice on restructuring a small business.
Lack of creativity
Having a mate that does a bit of graphic design make your adverts is probably not ideal, yet to cut costs, many do. High quality creative has been proven time again to make a significant difference in converting potential customers. Think of all the advertising that has led you to purchase. Was it the low-rent, high volume, product-and-price campaign, or the big creative that “zigged where others zagged”, to borrow a phrase. The average Londoner can see as many as 4,000 adverts in a day. If your ads stand out among the noise, people will click on them. It’s simple really.
Not seeing the value of marketing
Marketing of all descriptions is often lambasted as a necessary evil; a means to an end, an afterthought. Hurt feelings aside, it’s simply untrue. Fintech’s often have an unenviable marketing task. They cannot rely on decades of brand equity, they do not have pre-existing relationships with potential customers, and worse still, they may have a product that the market doesn’t understand and doesn’t know how to describe. So successful digital marketing needs to educate, excite and engage – and all with a limited budget and impatient investors. This is why finding the right partner – and preferably one who has been there before with other fintech startups – is so important.
About the Author
Mike Teasdale is the Planning Director and Co-Founder at Harvest Digital and heads up the Strategy and Insight Team. He is also an Adjunct Professor at Hult International Business School and helped to set up the IDM’s Award in Digital Copywriting. He has presented at numerous conferences, including three times at SXSW in Austin Texas, and contributed a chapter to ‘Multichannel Marketing Ecosystems: Creating Connected Customer Experiences’. He was recently shortlisted in the Top 100 Influencers of the Year by Creative Pool.