The fintech industry has ignited and transformed the entire way money moves. With more than 12,000 fintech startups currently vying for their corner of the $112B market, the journey to go from a fledgling startup to a thriving business has never been more challenging.
In fact, it’s estimated that only 38% of all startups will make it past their fourth year – a sobering statistic. 82% cited cash flow problems as the reason, while 42% reported no market need, and 19% claimed they were simply outcompeted.
As dissimilar as these reasons may seem, they are all connected to one overarching theme: marketing. Or, more accurately, a lack of good marketing.
As an entrepreneur, it’s easy to get caught up in the excitement of your new product or service. No one believes in it more than you do, and you can’t wait for the world to believe in it, too. As investors start to back your dream with generous amounts of funding, it can be tempting to pour those resources directly into product development and ignore marketing. But what happens when you launch your innovative product to an audience that isn’t there? Even the most innovative products and services will fail if no one knows they exist.
Marketing bridges the gap between your dream and reality. It is the gravity that pulls you back down to earth and sets you on the road leading to long-term, sustained growth and success.
Last month, we outlined four ways fintech startups can position themselves and increase their chances of success. Today, we’re going to take a closer look at one of those ways, and talk about why a marketing-first approach is essential for the long-term success of any startup.
Fintech Startup Marketing: Start with Your Customers
Before running your first ad or making your first sale—you need to get to know your customers.
The best way to do this is to create buyer personas before launching your business. This essential first step serves a variety of purposes, but most notably, buyer personas will help you identify potential customers and tell you how to reach them.
Building Buyer Personas
Building out buyer personas can be time-intensive, but it’s an essential first stop on every startup’s journey. According to HubSpot, a company website that uses personas to craft its messaging is 2-5 times more effective than those that do not. For this reason and many more, these fictional representations of your ideal customers should serve as the foundation of your messaging, content, and marketing initiatives.
Effective buyer personas won’t feel like two-dimensional stats on a piece of paper, but three-dimensional people with goals, ambitions, hobbies, careers, etc. They should be based on actual data, not biased assumptions—which is especially challenging for startups. Without a big budget for market research or an existing customer base, many startups skip this step altogether.
Despite the challenge of creating personas from scratch, it’s far from impossible. Check out our tips below to get started.
Ask the Right Questions
Without historical data or extensive market research at your disposal, you’re going to have to hone in on who your ideal customer is by asking the right questions. Collaborate with your team for input and feedback along the way. Here are a few questions to get you started:
- Who are they? Start by assigning each persona a name. If they work, what is their job title? Are they self-employed? Do they stay at home? Be thorough in your description and leave no stone unturned. The more detailed you are, the more precise your buyer persona will end up being.
- What are their stats? This is where you go beyond the shell and start digging into the demographics of your buyer. How old are they? What gender do they identify with? What are their salary and total household income? Where do they live? What is their education level? Do they have a family? What does their daily routine look like? Remember, for this exercise to work, you need to be as descriptive as possible.
- What are their goals and challenges? Once you’ve defined who and what your buyer personas are, it’s time to dig deeper. What drives them? What makes them tick? What keeps them up at night? What do they dream about? How can your product or service assist them in achieving their goals? If the answer isn’t obvious or doesn’t come at all, it’s time to start over. Remember, this is an exercise in objectivity. If you’re forcing a connection between a potential buyer and your brand, it will end up hurting your marketing efforts rather than helping.
- What holds them back? By uncovering your buyer’s potential fears and concerns as a consumer, you can anticipate and overcome any objections they may have to the sales process.
- Is there anything else? Think about the niche your fintech startup serves, and identify different types of information you still need to uncover. If you’re launching a virtual lending company, for example, think about whether your personas will need additional support to feel comfortable submitting sensitive information online.
Use the Right Resources
Just because you don’t have historical data to lean on, doesn’t mean you can’t build effective buyer personas. Here are some ways you can better inform your efforts:
- Look at the competition. Identify your top 3 competitors and study how they communicate with their audience. Notice what social media platforms they’re active on, the language they use, and how people interact with their brand. If you can’t identify at least one competitor, there might not be a need for your product or service in the market.
- Conduct stakeholder interviews. Talk to other people on your team. Ask them what the brand means to them and what challenges they think your product or service solves. By asking for their perspective, you’ll gain invaluable insight into your company that you might not have thought of otherwise.
- Reach out to your network. Put a note on your social media pages asking for people to introduce you to someone in your target market. Ask each connection for a quick, 15-20 minute interview. Use the time to better understand your potential customers, refine your buyer personas, and start forming your messaging strategy.
The buyer personas you build in the startup phase of business might look different later down the road. As you start generating leads, making sales, and building your startup—don’t be afraid to refine your initial personas. Marketing should evolve with your business, adapting to new insights along the way.
What’s Next for Your Fintech Startup?
Building buyer personas before launching your business is the first step in marketing your fintech startup for long-term success.
Next time, we’ll take an in-depth look at how to nurture leads through the sales funnel. In the meantime, take a look at our infographic to discover what’s shaping the future of fintech according to the industry’s leading experts.
We’re here if you need us. Please feel free to reach out with comments or feedback on the article by sending a message to firstname.lastname@example.org. Be sure to join our email list so you don’t miss out on the finale of this three-part series. And if you’re ready to position your fintech company for long-term growth and success, schedule a free consultation with the CSTMR team today.