Last Updated on June 15, 2021 by admin
Customer acquisition — finding prospects and converting them to customers — is a tall order. There are a whole funnel and flywheel involved, including awareness, consideration, and conversion. In the world of fintech, the emphasis is often placed on the “tech”, or building the underlying solution. The thing is, the biggest costs are typically associated with customer acquisition.
Making your brand name known, getting in front of the right prospects, engaging with prospects, and turning those leads into customers is an involved process. It requires collaboration between marketing, sales, UX, and product teams. So it’s no surprise that many fintechs either choose to divert focus more prominently on the tech or go in the completely opposite direction and focus entirely on “quick fix” growth hacks geared towards (unsustainable) customer acquisition. A successful customer acquisition game plan will strike the perfect balance.
Aggressive Customer Acquisition Tactics Come With a Cost
This “growth at any cost” mentality can be expensive, which is why it’s important to consider customer lifetime value (LTV) along with customer acquisition costs (CAC) when evaluating the success of these measures. If the LTV/CAC ratio is less than one, it might be time to consider the sustainability of the growth mechanisms being used.
Some fintechs rely on aggressive customer acquisition tactics to do one of two things in the fintech space: 1) they become too expensive and unsustainable, or 2) the industry outgrows them. Fintech represents an iterative improvement on financial services — using technology. Technology itself is iterative and often democratizes services by reducing fees and expenses. This is why the industry outgrows certain tactics like commission-free trading, which started as a novel idea and has since been matched by nearly every broker in the game. Low rates for credit and high interest rates for savings accounts are also popular customer acquisition tactics even though they tend to attract price-sensitive customers that are difficult to cross- or upsell to more profitable products and services.
What Does a Good Fintech Customer Acquisition Strategy Look Like?
Since customer acquisition is expensive, it’s important to create an effective customer acquisition game plan that makes the effort worth your while. There are several opportunities to consider.
Partnerships are a key way for fintechs to leverage existing ecosystems to generate new opportunities and cross-sell products and services. Finding a mutually beneficial partnership enables existing brands to take advantage of other relevant customer bases that can generate thousands of new leads in real-time. Selling both directly and through an intermediate party is a great way to hedge against pricier customer acquisition options as it tends to be must more sustainable and inexpensive.
Search Engine Marketing (SEM)
Both paid and organic search engine marketing tactics deserve some attention when it comes to fintech customer acquisition. Optimizing content in a way that helps your target audience find it and advertising your best content are both great ways to drive awareness of your brand. When it comes to search engine marketing, there is both a paid and organic aspect. The organic element is called search engine optimization (SEO) and focuses on optimizing content so that your target audience has an easier time finding it.
SEO is a popular customer acquisition method for a couple of reasons: It’s relatively easy, and it’s very cost-effective. SEO and organic growth have also been reported as the #1 inbound marketing priority for companies around the world. Put in the time to learn SEO strategies, stay up to date with trends, and optimize your blog posts — and you’ll find your content ranking better than before.
Paid search marketing (more commonly called pay-per-click, or PPC) is advertising a search result that you create on a Google SERP. Depending on how optimized your ads are and how much you are willing to pay, you have greater control over having your website being found by searchers.
There are plenty of tools, services, freelancers, and agencies that are experts at paid SEM. If you don’t have the in-house resources to manage it, you have plenty of options. Given the sheer volume of free (and paid) tools available, training an in-house resource might not be out of the question, either. Leverage tools like Google Keyword Planner, SEMRush, Moz Open Site Explorer, and Ahrefs to get the insights you need.
With the right customer and prospect data, fintechs can build a highly-successful email marketing system that can be used to attract, convert, and retain customers. Why is email marketing a good idea? Consider the following:
- The number of active email users is forecasted to reach 4.3 billion in 2023
- The average expected ROI is $42 for every $1 you spend on email marketing.
- The average open rate for a welcome email is 82%.
- Emails with personalized subject lines generate 50% higher open rates.
Paired with a solid content marketing strategy, email marketing can be personalized to reach
people at every stage in the buyer’s journey. Fintechs can leverage personalization and dynamic content features within email marketing services to provide a truly tailored experience for prospects.
Content marketing is an especially effective customer acquisition method for fintechs. Content is a relevant, cost-effective way to grab prospect’s attention and compel them to action. One of the biggest benefits for fintechs is that content can help build trust and credibility while also educating an audience. It can be used to add value by providing something to an audience — for free.
Blogs, ebooks, white papers, videos, and other content can all be used at every stage in the marketing and sales funnels. Content marketing is also highly flexible and can be adjusted over time as you receive feedback from prospects and customers on what they like and what they dislike.
Striking the right balance with your customer acquisition game plan is important. Not enough focus will inhibit growth, but too much focus on aggressive, high-cost tactics may prove ineffective in the long-run. Creating a well-rounded, holistic strategy that can pivot and iterate over time is the most effective approach, and a focus on creating high-value content can help fintechs optimize customer acquisition over time.
Your exact strategy — and the combination of tactics you use — will depend on your unique fintech business. The most important thing is to measure, analyze, and pivot based on data and insights as you begin to see your customer acquisition plan in action.