Fintech PR and Marketing Mistakes: How to Avoid Them?
Fintech startups face many unique marketing and PR challenges. Our Founder Yana Lapitskaya and Julija Jegorova of Black Unicorn PR shared their experience at a seminar organised by Rise Vilnius during the FinTech Week and gave an interview on the subject to Delfi.lt
By: Jurate Zuolyte
Your seminar is about the most common mistakes fintech startups make in their PR and marketing. What is so special about this sector talking about the PR aspect? Do you see some special challenges which they are facing?
Julija: The PR and Comms sector is usually underestimated and not always understood in terms of its purpose, how it works and what impact it may have. PR is often confused with marketing and advertising.
Especially with startups, PR is not for sales, but to build a trustworthy company image. Startups will often lack media features. Especially with new products or services, consumers look for third party validations such as reviews, articles and contact with other buyers. The voice of journalists, with their reputations and role in society, means a lot to consumers. Having huge publications can generate awareness, but the more trustworthy the publication the more the consumer will trust the brand.
Dealing with financial services or products, trust is even more significant. Perceived trust, apart from perceived benefits, is what will drive a consumer from the beginning of the customer journey to a purchase. We are talking about managing income money, wealth, requesting credit. It may involve giving certain financial information, and it may involve getting penalised with debt or a bad credit rating. In B2B environments, fintech may deal with managing large amounts of financial information. A consumer or business looking at fintech will have a lower risk tolerance and will take a closer look at the third-party validation.
Yana: Typical startup mistakes in marketing transcend a specific sector. Therefore, it will be important to cover off the fundamentals applicable to fintech as much as to any other startup. This includes things like ignoring marketing altogether, adapting the ‘spray and pray’ approach, trying to jump into the sales mode before building awareness and many more. Talking about the fintech world is like adding a specific lens to your camera – it will help to capture the nuances that either don’t exist or are less critical in other sectors. Trust, that Julija is talking about, is a perfect example. It takes a long time to create and a short time to destroy. The ability to focus on this and other fundamentals is a challenge that can literally make or break a fintech startup.
So as your seminar name is hinting, what are these most common mistakes fintech startups make and how can they avoid it?
Julija: Firstly, fintech startups have some of the most difficult financial, legal and technical hurdles to overcome. Nevermind doing the right research and going for the right idea in a highly competitive environment with giants that count with much more experience and resources.
Given all these are taken care of, there remains the issue of gaining the trust of the consumer. Like mentioned earlier, potential buyers will want to see third parties validating the brand, and with more rigour when it comes to fintech. Consumers are also more educated and resourceful. They will be savvy and compare providers when considering a solution for their needs, doing due diligence research that will expose them to company features in the media. Their perceptions will be shaped by things that they find, and their choice of similar products might ultimately depend on the provider that has a better reputation or presence in the public sphere. The more sophisticated the buyer, and the more costly the product, the more important it will be to establish a reputation.
When it comes to fintech, the media can also act as an interlocutor to describe product features and benefits and amplify advertising and sales efforts.
When a consumer enters the ‘customer journey’, one of the first things they need to do is confirm whether they have a need for a particular product or service. A lot of fintech solutions are complex, the media could help to break down into the language their audiences are more likely to understand.
Yana: To quote Joseph Conrad (a British writer and novelist) - it’s only those who do nothing that make no mistakes… So, mistakes are not necessarily a bad thing! The goal is to have the best shot at what you do as a startup and the idea behind our session is to help startups avoid most of them. To give you an example, all great fintech startups I know, like Revolut, can explain very clearly, in one line, what they do. If your idea is so ‘complex’ that you can’t explain it briefly and simply enough – it means you are not clear about it yourself. Or at least this is the message your external audience will be getting. This is another beginner’s mistake I want you to avoid.
Some startups start talking about themselves in the very early stage: sometimes they have only the idea and already write a press release about it. How does it look for you, is it ok, does it help to attract the attention of potential investors and customers? From the other side, isn`t it dangerous if something goes wrong and you will ruin your reputation, or somebody will steal your idea?
Julija: Some startups can pull this off, but ideally new companies need to have a game plan, an overview of why they are doing things at a certain time. You can’t bet on a press release to provide you with your future success, especially when you don’t have much on the table. There won’t be actual customers without a basic product, and it will be hard to attract high-quality investors. Besides, unless the story is very interesting or promising in terms of the future, a press release in such an early stage may not be successful in the first place.
At this very early stage, what those in these startups need to do is reach out to their networks, expand these and become more involved in the industry. If needed, they should reach out to potential clients to scope interest in their product. There are plenty of events and other opportunities to meet investors, and what will work out better is to be very targeted.
I’m a strong believer in the need to make sure your product works well before shouting about it. There needs to be a balance between product, marketing and PR, the three need to work in unison to help drive sales. It is imperative that the communications strategy be aligned with the general strategy.
Yana: I think you should get the word out as soon as possible as in this day and age it makes little sense to keep ideas to yourself. You are much more likely to achieve great things through sharing, collaboration and openness rather than by being protective and closed from the outside world. There is an argument that in a startup environment an idea is not worth anything without the implementation. I still think ideas are powerful but at the end of the day implementation is what defines your value as a company.
These days ideas are a shared commodity and more often than not several companies will be working on a similar idea simultaneously without even knowing about it. So, guess who wins in the end? Those who get the implementation right and who communicate their idea in the best way, to the right audiences – this includes investors and customers alike. So ultimately those who dare win.
Which communication channels for fintech startups are the most effective? Maybe it is enough to communicate on social media? Maybe you have tips on how to be seen there?
Julija: Nowadays, it’s not easy to get in the media with buzzwords alone. Fintech, blockchain, cryptocurrency, ICO are words that are increasingly less powerful. You have to have an interesting, credible, newsworthy story.
Social media alone is not enough for any company of serious ambitions, and much less for fintech.
However, it is not a matter of choosing a communication channel over another. Each of them serves a different purpose and are all important. In some industries, some are more important than others. Even within fintech, it could depend on the customer profile. Is it a B2B product? Then, LinkedIn will be significant. Is your product related to investing? Email marketing could be an important channel. Is your demographic high-net-worth individuals or entrepreneurs? Try advertising in podcasts or with physical adverts in public spaces. For instance, many London fintech startups such as Moneybox or Nutmeg have advertised in commuter trains where they know they will be seen by "white collar” City workers.
In terms of media outlets, national and trade media will be most important. It’s also important to understand the demographics behind publications. There are podcasts for entrepreneurs and the business-oriented that will have a perfect demographic for fintech. Wealthfront has done this successfully. In terms of trade publications, there are financial publications, technology publications, publications about fintech, and publications about specific areas of fintech. Which of these to get in touch with can also depend on the kind of story you currently have to pitch. There’s still nothing that gives you as much credibility as getting an in-depth article in a reputable publication.
Yana: I love social media, I think it’s so powerful! The recent examples show it and also illustrate what can happen if this power ends up in the wrong hands… So, we all have a responsibility to use it ethically.
Social Media channels must be used by fintech full stop. Does it mean other channels are unimportant? Not at all! You always need to account for different audiences and different purposes of your communication.
Social media is also such a broad term… In our context talking about the use of messengers like WhatsApp, Telegram or purpose-built solutions is more relevant than, say, talking about Snapchat.
Messengers are used widely by well-established banks for customer support as well as by cryptocurrencies of all shapes and sizes that use them to build and manage their communities.
Only a very low percentage of startups are successful. How to tackle this challenge from PR side and to convince the audience your startup will be one of the lucky ones?
Julija: I think what we need to convince the audience of its impact the product can have on their lives. People are looking for things that will reduce their anxiousness and things that will enhance their happiness. This can be translated to saving time, saving costs, increase wealth, for companies it might mean increase sales, margins, make processes more effective, improve employee morale, the list goes on. PR is about building an image, an identity. This will be what audiences will perceive about the startup.
The most effective fintech startups will not only achieve media placements with PR, but they will develop an identity that links them intrinsically to the value they can provide to people’s lives and businesses’ needs.
Yana: All you need to do is convince the audience you are solving one of their pressing problems and you are the best company to deliver on this promise because of who your founders are, the level of expertise they have or the technology they use... There could be several reasons, but they must appeal both to the rational and emotional part of your audience brain. In this case they will want you to succeed and some will even help you succeed – by buying your product, investing in you, being loyal to your brand etc.
This is what I like most about marketing – its ability to change people’s behaviour, turn ordinary people into superheroes, and give startups superpowers.