The UK has positioned itself as a global fintech hub. The sector is booming and shows no signs of slowing given that fintech enablement is high on the agenda of politicians in attracting international investment. With this comes deep competition. In 2018, it was estimated that there were 1600+ fintech firms in the UK and it is expected that this will double over the next decade.
Whilst the UK has a well-rounded fintech ecosystem, new entrants and incumbent fintechs are under constant pressure to survive. Growth demands investors, investors demand results in the form of profit, and profit demands effective performance at low cost. The ambition of many fintechs is to capture the market of its competitors and take a disruptive stance. Building a great product is the first step towards success in this industry, but marketing is the follow-through that will lead to genuine market share. Marketing has been deployed in this sector with mixed success. It’s seen as a costly function and sometimes put towards the bottom of the priority list. In this article our Fintech and Payments specialist from our Financial Services team, Malisha Patel, looks at the right time to build a marketing function and the core skills required within that function to achieve success. This is a follow-on piece from her last article, David vs Goliath: the power of marketing across the payments industry.
“One area to consider when timing your first marketing hire is positioning. Many businesses launch a product before they’ve really thought about precisely where it sits in the market, who it is aimed at and how it’s going to sell. The value of a good marketer should not be overlooked when designing the product and user experience as we tend to look at the world from a customer’s point of view. Having an experienced marketer on board who can not only do the research but also add the creative expertise required, can be the difference between early success and early failure.“
Says Richard Leader, Former Marketing Director at Funding Options.
The timing of the first marketing hire is critical; too early and you risk spending too much money too soon, but too late and you may have missed the window of opportunity to make an impact in the market against competitors. Having a clear and integrated marketing strategy should be an early priority. However, start-up companies sometimes don’t invest as much in senior marketing resource as they should because this is seen as prohibitively expensive. In the age of the gig economy, there is an array of very high level talent available on an interim basis. We have seen some pivotal early CMO placements into fintechs on an interim/fractional basis to form strategy, then the business hires more junior marketing professionals once they understand what is required to execute its strategy. This recruitment model allows businesses to accelerate the formation of their marketing team which ultimately leads to a stronger market position.
Alessandro Onano, CMO MoneyFarm, shares his thoughts:
“Early-stage start-ups in particular, often underestimate the value of having an experienced marketer on board since day one and the reason why, in most cases, is that they link marketing to acquisition only, through paid media, missing the real point which is that marketing above all is about understanding of customer needs. This misunderstanding is also often the reason why some brilliant start-ups, with a great and innovative idea, finally fail… because they forget they are solving a customer problem focusing too much on the product.”
In terms of the professionals required once the strategy has been formed, fintechs tend to have a much leaner workforce and as a result the first marketing hires will usually be versatile with a ‘get it done’ attitude. To execute the strategy, the skillsets needed vary depending on the stage of the business lifecycle and a business should adapt its marketing team depending on where they are. In the early, growth stage, it’s all about building a reputable brand and supporting it with meaningful content, then focusing on acquisition and retention.
However, it is becoming apparent that it isn’t a case of one model fits all. In some instances, early stage fintechs need to focus on the internal values, ensuring everyone is bought in the company’s vision and purpose. They may then look to start bringing in specialists that deploy simple, tactical marketing campaigns as they develop commercial strategies and build out operational functions. The need for a seasoned consultant may come later, but strong content right from the beginning could be the key for success.
David Swallow, Former Senior Marketing Consultant, Allica Bank comments:
“I would say the question about when marketing costs should be incurred comes down to when you want to start to embed the business’ values, culture, tone of voice and personality. Long before marketing campaigns are needed you must ensure the whole team has a clear view of what the business offers, is clear on the reasons why customers might value what you offer and understands the questions or concerns they may have.
When all employees at all levels get this, the proposition is reinforced, consistently delivered, and clear to the customer.
The principles stand for all businesses but the opportunity in fintechs compared to established players is that the organisations tend to be more agile, nimble, and able to make changes more quickly.”
An effective content marketing strategy will set the tone of voice and build credibility and trust internally and amongst the customer market, but can also harness influence within the sector, tip funding bids and drive sales. Digitally focused content marketers are therefore in high demand.
Acquisition strategies have always been the focus of early stage start-ups. When scaling growth (particularly if you’re still in cash-burn phase) it’s all about cost per acquisition (CPA). So finding the channel that can deliver large volumes of users for the lowest cost is the path to glory. At this point ‘attribution’ is king, so effective analytics and reporting of data is critical. Fintechs use technology and data to provide an experience that is smart, calm and clear. So often though, these fundamentals don’t filter down into marketing strategy. Being able to interpret data and glean insights into customer behaviour is the lynchpin of customer acquisition in this sector. That’s why fintechs are looking at making early hires of professionals who are strong in SEO, PPC, social media, mobile, website, affiliates and analytics, with the objective to solve the customer problem already set.
“Fintechs have almost become one-trick ponies in my eyes; Amazingly strong at acquiring (external investment/ new customers/ great talent to build) but highly ineffective in retention (monetising loyal customers/ retaining talent/ servicing customers). Where I think Fintech’s need to improve, and fast, is with their Marketing Retention strategies” says James Done, Vice President, Prepaid at CornerCard UK.
More recently, businesses have started to recognise that retention strategies are equally as important, particularly with new players entering the market all the time. The time, cost and effort to drive acquisitions needs to be retained in order to see longer term benefits and marketing ROI. Email marketing, marketing automation and engagement specialists are therefore also in high demand.
In the longer term, businesses start to look at bringing PR in-house and developing partnerships. PR is essential for a growing Fintech. In addition to building a ‘buzz’ around the brand, media strategies are important to ensure the market is engaged and to build a great story customers can relate to. Partnerships are equally as important, particularly as fintechs look to scale even further and associate themselves with other more established and credible brands in the market place.
Savvy business owners will also have one eye on the road to acquisition. How appealing is the business to a potential buyer? From a marketing perspective, PR and partnerships form an important part of this, as does branding and vision. Businesses with a strong place in the market are clearly more desirable but in some ways the brand image needs to be flexible should, for example, it be acquired by a large bank.
The primary takeaway that we see for fintechs is not to delay in getting a marketing strategy and team in place, but also to be creative about the way in which you do this. Devising a market-winning strategy requires a professional with a wealth of commercial experience, who can provide guidance to the leadership team, but most importantly, who can also be hands on and get the job done. The mistake that businesses make is to assume this requires a permanent hire. A fractional or interim professional can achieve great results on a hugely flexible basis and means the business is brining in top end experience and knowledge, just when it’s needed, and not for a moment longer! Then it’s about recognising and getting a core team with the exact skillset to execute this strategy in the most efficient and successful way with content being the top priority and underpinning any additional tactics.
Alessandro Onano, CMO MoneyFarm continues to conclude:
“It is all about the right fit for the challenge that the company needs to face but nowadays, almost regardless of the size of the company and the marketing budget available, the CMO or the marketing team in general needs to focus more and more on content and organic growth rather than on paid media which is almost completely automated and so almost commoditised.”
It is important for a business to have a good understanding of the variable level of skills & expertise available in the market alongside clear objectives…this will be the first step to knowing who they need in the business and a clear plan will determine the when!
James Done, Vice President, Prepaid at CornerCard UK believes:
‘Maybe the question could be refined to ‘what level of [marketing] experience is required at each stage of a business’ growth’.
tml Partners is an international executive marketing recruitment firm specialising in senior appointments across marketing and corporate communications. Malisha Patel is a leading member of our financial services division, and partners with leading brands across fintech, payments, retail & investment banking and insurance markets – to support the best in class development of in-house Marketing, Communications and Digital expertise. For more information and to discuss the growth and structure of your marketing function, contact Malisha Patel for a confidential chat.
