B2B Fintech customer acquisition is different in 2020. Customers are more connected than ever and expect a personalized touch. They do not want a shout or a directive or even a salesperson, in many cases. The customers of 2020 do not want to be sold to. Instead, they are focused on seeking out credible sources of information with whom they can build a relationship. Customer acquisition is about proving to prospects that you’ll be there for them, every step along the way.
As content marketing continues to take off and efforts are focused on digital channels, the fintech marketing landscape has become crowded and noisy. To find and capture new customers requires messaging at every stage of the buyer’s journey and customer lifecycle — from awareness to decision and from experience to retention, loyalty, and advocacy.
In such a crowded marketplace, customer acquisition can get pricey. Some experts posit that, while big banks may spend anywhere from $1,500 and $2,000 to acquire a retail banking customer, a startup’s CAC may run from $5 to $300. These are numbers that startups must contend with if they want to survive, though they’re also numbers that can be lowered with an evolving strategy that continues to be optimized over time.
B2B fintechs must get really good at driving brand awareness, generating qualified leads, and nurturing those leads. Remember, B2B buyers are no longer interested in being “sold to;” instead, 94% of B2B buyers do their own research before making a purchase decision. These research- and web-savvy prospects have high expectations. Succeeding in this new landscape requires a serious investment in your audience. It also means ensuring that your fintech customer acquisition strategy doesn’t have holes. We’ll look at a few areas where you may be missing pieces.
Planning & Goals
Planning action and defining goals are critical parts of any fintech customer acquisition strategy. Startups love the mantra “move fast and break things,” but it’s not a fintech customer acquisition strategy we’d advise. Taking the time to build a thoughtful strategy is a necessity. Whether you have an outline of a plan or a fleshed-out, fully-vetted strategy, documenting your plan can make all the difference.
Know that this plan will change — and that it’s OK. Put together documentation that outlines which platforms you will use, KPIs to measure success, timing, budget, and the team necessary to get it all done. Don’t forget to outline specific goals and objectives. The more specific you can be, the more effective your plan will be. Map out SMART goals that are specific, measurable, attainable, relevant, and time-bound. From there, you should be able to reverse-engineer a strategy that works.
Without planning or defining business objectives, you’re left to throw everything at the wall to see what sticks. While moving fast and shifting gears may be important, having a plan that you can iterate as you go is more important.
It may sound crazy to think that a person could put together a fintech customer acquisition strategy without having a team to execute, but it’s actually quite common. Whether you’re a fintech startup or scaleup, you likely have a team of employees that are wearing many different hats. Getting buy-in from people who already have their hands full on other initiatives and priorities can be a huge challenge. One way to go about this is to select a customer acquisition team (or lead) that has the bandwidth and knowledge to take on this important mission. Some considerations:
- Train the team/lead on the customer acquisition process and their specific role in onboarding
- Inform the team/lead about both short- and long-term goals
- Anticipate and plan contingencies for hiccups in the customer acquisition strategy
- Be sure the team/lead can navigate cross-departmental considerations with development teams, marketing, sales, and others.
A strategy and roadmap without people to execute and hold each other accountable are meaningless. Don’t skip this important part of your fintech customer acquisition strategy.
Your Cost of Customer Acquisition (CAC)
You may have a limited budget, so it will be essential to determine CAC before you get started. To calculate CAC, estimate the cost of all your sales and marketing expenses against a specific period of time, then divide that by the total number of customers acquired in that period of time.
CAC = (Cost of Sales + Cost of Marketing)
New Customers Acquired
You won’t have solid CAC numbers until you actually begin to acquire customers, but having a general sense should be helpful in planning. Once you get going, you’ll want to consider a more thorough CAC calculation:
CAC = (MC + W + S + OS + OH) / CA, where:
- CAC is customer acquisition cost
- MC is marketing costs
- W is wages for marketing and sales
- S is marketing and sales software
- OS is outsourced services
- OH is overhead for marketing and sales
- CA is customers acquired
This formula is helpful for framing CAC against specific time periods (quarterly or annually). Note that CAC is not a perfect measure and several factors can throw a wrench in your calculation. Frequency of customer purchases can create differences in CAC as can the length of your sales cycle (you may make a marketing investment in Q1 that doesn’t begin to yield new customers until Q4). Regardless, it’s important to keep tabs on CAC as that metric can help you adjust marketing and sales efforts throughout the year.
Launching a fintech customer acquisition strategy requires foresight, patience, resources, data, and the will to succeed. It also requires planning, a team, and at least a guesstimation of your CAC. Without any one of these things, you’ll likely be setting yourself up for failure.
If you’re looking for more information and more in-depth tactics and strategies, download the Fintech Customer Acquisition Playbook.