FinTech continues to see double-digit expansion, and much of the market’s growth now comes from B2B FinTech. Opportunities in payment platforms, SME lending solutions, and SaaS-enabled back office tools have investors lining up behind B2B-focused FinTech companies.
That’s according to KPMG’s latest report on the industry, which also points to regulatory technology (regtech) as an additional growth driver for the segment.
Accenture thinks alternative finance powers a huge part of the current B2B FinTech trend. B2B FinTech companies are filling the gap left by banks’ withdrawal from SME lending, leveraging big data analytics to enhance the creditworthiness assessment process.
This means that instead of directly competing with banks, a lot of B2B FinTech companies actually complement traditional financial institutions. Accenture says this approach makes many of the B2B FinTech’s business models readily scalable and sustainable (not only in alternative lending but also in payment processing and workflow streamlining).
Alongside these strong opportunities, however, B2B FinTech firms also face a number of serious marketing challenges unique to the industry, with the biggest being customer acquisition. Attracting prospects and turning them into customers can be very difficult for most fledgling FinTech companies since:
- It can be hard to convince potential buyers about adopting an unfamiliar product.
- The typical FinTech firm hasn’t yet established brand recognition.
- Limited marketing budgets often mean fewer marketing options.
But, as we’ll learn in this post, any B2B FinTech company can handily meet these customer acquisition challenges by focusing on the buyers and the process they follow.
The buyer-led, consensus-based path to purchase requires vendors to be a proactive part of the buying process. While buyers prefer self-directed research, vendors that actively help potential customers find what they need will be in a better position to influence prospects and win the deal.
To help you translate this into something more concrete, today’s blog entry answers three key questions about B2B FinTech buyers and their purchase cycle. This post pulls together findings from the latest research on the FinTech industry so that you’ll get data-driven marketing insights, not simply anecdotal advice.
Who actually makes the buying decision?
Respondents in a survey of B2B FinTech buyers carried out by PR firm CCGroup say they make a major IT investment once every six months. The challenge lies in the fact that FinTech purchases rarely involve only a single decision maker.
Over half of the survey respondents say a purchase decision requires the approval of 10 people. For large companies, the buying group can include:
- C-level executives, EVPs, and VPs interested in the financial, operational, and marketing aspects of a purchase
- Directors and department heads in charge of horizontal and vertical business streams
LinkedIn’s study of a broader group of B2B tech buyers echoes similar results and highlights some very interesting findings:
- More than 7 decision makers are involved in B2B tech purchases.
- Around 48% of Gen Xers contribute to B2B tech buying decisions, while 41% of millennials provide input to tech purchases.
- The average tech committee consists of technology/engineering roles (44%), external-facing roles (23%), back-office roles (21%), and other roles (12%).
What influences them?
The CCGroup study reveals a number of factors that drive B2B FinTech purchase decisions in large companies. Respondents rated these factors as “most important” or “important”:
- Internal business analysts
- Existing relationship with vendor
- Industry analysts
- Industry consultants
- Web Search
- Vendor webinars
- Vendor-led events
- Vendor whitepapers
- Direct marketing
- Trade media
- Business media
Meanwhile, Arketi Group surveyed three generations of B2B tech buyers and found that different combinations of factors and sources influence each cohort’s tech buying decisions:
- Millennials rely on industry analysts 38% of the time when evaluating a tech purchase, followed by vendor face-to-face meetings (36%), and vendor website (33%).
- Baby boomers mostly consult industry analysts (50%) as well as colleagues (49%) and vendor face-to-face meetings (48%).
- Gen Xers refer to colleagues and vendor websites (both at 40%) as well as analysts and tradeshows (both at 38%).
What do they want to know about a product or vendor?
According to the 2017 U.S. Technology Marketing Report, the product information that B2B tech buyers seek varies with the size of the organization and the stage in the buying cycle:
- When evaluating a product, 68% of B2B buyers consider its reliability, while 64% want ease of use
- To help them gain internal buy-in, 49% of B2B tech customers use product cost information, while 43% prefer ease of integration.
- Reliability makes up the top concern for both large firms (with more than $10 million in annual sales and small companies (less than $1 million in revenues), while mid-sized firms put ease of use on top of the list.
- B2B tech buyers consider pricing information as the most helpful resource during the purchase stage.
The CCGroup survey highlights some of the things that B2B FinTech buyers want to know about vendors during the decision process. The study considers three buying cycle stages: longlisting, shortlisting, and purchase stages:
- Longlisting stage: FinTech buyers at this stage want to know if a specific vendor is knowledgeable enough about the latest industry trends.
- Shortlisting stage: Potential FinTech customers that are shortlisting vendors look for candidates that understand the challenges and priorities of their buying audience.
- Purchase stage: During the purchase stage, FinTech buyers look for evidence that a vendor has successfully delivered to similar customers.
While there’s no one-size-fits-all approach to influencing B2B FinTech buyers, there’s also tremendous value to be had from getting to know your potential customers up close. The key thing to remember is that buying decisions are made by teams instead of individual decision makers. Moreover, these decision makers need different types of information as they identify and evaluate their choices. Your job as a marketer is to help them make informed decisions.