The start-up phase for any fintech business is usually a helter-skelter period where firms are rapidly developing their product, determining their market, creating their brand, hiring staff and undertaking a myriad of other essential tasks while keeping a close eye on costs. The need for scalable marketing expertise at such times is clear.
Common marketing challenges in the start-up phase usually include limited resources, lack of expertise, high competition and unclear positioning. Businesses that persevere through the start-up stage are usually the kind that look for external help – such as consulting an expert, fractional executive. Enter the Fractional CMO (Chief Marketing Officer).
Challenges faced by start-ups
Most fintech start-ups face considerable financial challenges long before they reach a point where hiring a full-time CMO is essential. Often there have been many years spent conceiving a software product and writing code (and a business plan) and then trying to make that first sale. Without angel investors or VC backing, marketing is usually a secondary concern during this period in a firm’s lifecycle.
Hiring an industry specialist marketer on a fulltime basis in a fintech’s early years would be unattainable for many fintech founders – yet there are fundamental marketing decisions to be made ‘off the bat’: what is your value proposition; what is your target market; what is the competition’s strengths and weaknesses; what does your ‘market map’ look like (so you can effectively position your product); what does your ‘brand’ represent (not just a logo); how do you trademark and so on. You need expert guidance through this process. Leaving all this responsibility to someone whose primary focus is not marketing can result in expensive mistakes that may take years to unravel.
Fractional CMOs offer a cost-effective solution by working on a part-time or project basis. Start-ups and growth businesses can access top-tier talent without the burden of a hefty salary, benefits, and other full-time costs. This cost-efficient approach is particularly appealing to fintech start-ups with budget constraints but don’t want a novice running their marketing operation.
Benefits of hiring an FCMO for start-ups
An FCMO provides bespoke support: they’ll look at exactly where your business is at in its own journey and plan from there. This guarantees strategic insights and guidance that is tailored to the unique needs of each start-up. These actions create accelerated growth through targeted marketing strategies.
Tech start-ups can experience rapid shifts in their growth trajectory as the demand for their solutions grows. Once the firm has gone beyond its first beta client and has a small roster of proven customers, growth can be achieved at an almost alarming rate. This kind of high growth phase demands much more marketing commitment in order to maximise the many opportunities that arise. The amount of time required for marketing from a founder or other key employee with non-marketing responsibilities increases to the point where it becomes unsustainable.
A Fractional CMO provides the flexibility to scale marketing efforts up or down as needed, accommodating changing business requirements. Whether it’s launching a new product, entering a new market, releasing a solution upgrade or pivoting the strategy, a
Fractional CMO can adapt quickly to support these transitions.
The working arrangement for a FCMO can align with these key times for businesses – perhaps shifting from mainly remote working to more hours in the office, or one or two days per month to one or two days per week.
Key contributions of FCMOs in scaling start-ups
Market research and analysis
This stage includes identifying target markets, customer segments and competitive positioning.
It may sound obvious, but conducting thorough market research is the foundation of a successful fintech venture. You need to choose a specific niche within the fintech industry where your start-up can provide innovative solutions. Some niches are dominated by global players with budgets to die for. Think about the niches that are currently underserved – perhaps by legacy technology or high maintenance inhouse systems.
Determining your target services means focusing your limited resources on a specific niche as a launchpad for future innovations. Then you must identify your target audience and understand their pain points.
Many fintech firms are product-driven rather than market-driven, meaning that they are inspired by the notion of providing innovative technology rather than delivering what the market is asking for. If everyone in a niche is happy with the software they have, then it will be a challenge to convince them to change vendors.
Don’t forget to look at the competition. Perform competitive analyses to identify
strengths, weaknesses, opportunities, and threats among the main players. Sometimes the most successful firms in a niche are not the ones with the best software, they just have the best marketing.
Brand development
Brand development involves the crafting of a compelling brand story, based on research to identify what resonates with the target audience.
A brand is not just a logo; it’s the meaning associated with an entity, earned through a combination of reputation (past), experience (present), and expectation (future). Brands can encompass products, services, organisations, places, or even people.
An effective brand strategy outlines an action plan designed to achieve a beneficial long-term goal, that answers the fundamental questions of who, what, when, where, and why. Building a powerful brand requires an ongoing commitment to excellence and an understanding of the qualities that define the brand. The successful strategy fosters a consistent attitude and a carefully managed experience that meets or exceeds consumer expectations.
Go-to-market strategy
This is the design and implementation of a robust go-to-market plan to attract and retain customers. Key elements include:
- The 4 P’s – the strategy should consider product, price, promotion and place (distribution).
- Positioning – FCMOs develop and maintain clear, differentiated positioning for each product in the portfolio.
- Integrated marketing campaigns – FCMOs are responsible for overseeing the execution of cohesive marketing campaigns that align with overall business goals.
- Channel management – utilising appropriate channels (digital, social, traditional media) to reach target audiences effectively.
- Timing and budgeting – ensuring that all elements of the marketing mix (advertising, sales, PR, exhibitions, email, etc) are deployed at the right time and to budget.
Performance metrics and KPIs
Setting and tracking key performance indicators to measure success and ROI is key. This task also includes reviewing analytics to set new goals and using data analytics to refine strategies and improve campaign performance.
From strategic expertise and cost-effectiveness to flexibility and fresh perspectives, this type of outsourcing empowers fintechs to navigate the complexities of marketing while focusing on their core competencies. You also don’t have to worry about them suddenly leaving to take a better job, or (worse still) going to a competitor!
With the guidance of a Fractional CMO, start-ups can position themselves for growth, innovation, overseas expansion and a competitive edge in the market – without breaking the bank.
Want to know exactly how a Fractional CMO could support your fintech business? To
speak to our in-house expert, simply get in touch with us today.
