How To Tackle The Biggest Challenge for FinTech Companies - Customer Acquisition
In the last few years I have been mentoring multiple early stage fintech companies through accelerator programs as well as directly. Although I should not be I am continually surprised to learn that few companies at this stage put as much effort into sales as they do on product and funding, especially in the B2B space.
Whilst it is clear you need to have a solid product and market readiness, FinTech companies should start thinking about their sales strategy early on. This is important not only for the future success of the business bu
t also in other activities such as raising investment.
Often founders are too focused on trying to polish their product into perfection and run out of money before generating any significant revenue. Getting your customers to pay for your product or service is always hard, but selling to banks and financial institutions is even harder and most probably the biggest challenge for fintech startups. One key reason why FinTech startups need to start thinking about sales strategy in their early days is simply because of the lengthy sales process to close your first few deals. Many I speak to expect to close the deal in 1-2 months, in practice it can take up to 6-12 months and double that in large banks if you don’t have the right connections and network. This can be a killer for cash-flow.
Therefore besides CTO, the most difficult position to fill in a fintech company is Chief Commercial Officer (or Sales Director to us older folk).
Some advice for Fintech companies who are struggling with their sales efforts:
Before raising the question of making a sale, start helping your prospects with the problems your product is solving. For example, create content around the problem you are solving, attract questions and discussions and then build from there.
Introductions are always good but make sure they are actually relevant to your proposition. Head of Innovation might not always open the right doors for you. The challenge for you is moving from the innovation teams to the line of business who will benefit from, and pay for, your product or service. Know your ‘hot introduction’ persona.
Clearly define who will buy your product. I see many companies just targeting tier one banks when their product is more suited to tier two, brokers or asset managers. In fact the sales cycle here is much shorter. Therefore, have a clear strategy of who will be your early adopters and why. Bear in mind that selling to enterprise is very different from selling to startup or consumers directly.
The biggest challenge selling to highly regulated sectors like financial institutions is ensuring that your technology meets compliance. Make sure you have solutions on the table and answers to the questions you might get. This Is one of the biggest reasons why the sales process is lengthy, or in the worst case scenario doesn’t happen at all.
Prepare use cases! You are still an innovator, and for financial institutions this means you are a risk. If you already have clients, even if it’s one or two – make sure to create user cases that you can share to earn trust
To pull this together – start thinking about your sales strategy from day one. Product is important but you need to find ways to help your clients pay. If you are a fintech company struggling with your sales strategy and acquiring new clients feel free to get in touch and we can discuss together ways we can help you. This post appeared first in Finextra