According to an Adaptive Labs research report, 55% of SMEs would definitely pay more for banking services that were simple and easy enough to use, to free them up to get back to doing the bits they love, and a further 34% would consider it.
If backed up in the real world, those stats are good news for UK neobank startups Tide and Starling, both of whom are going after the coveted by highly intricate SME market, and hardly want to enter into a price war with the incumbents. There’s also Coconut, who is also having a crack.
The thing is, when you drill down to the features on offer from all of them, they all feel rather similar. So, what is it that would make a SME decide one particular tech startup is the must have ‘Nike of SME banking’?
This week I’ve been mulling over the importance of brand metrics. I was recently introduced to System 1 Research, some of whose work has looked at the way consumers make decisions in markets where there is an abundance of ‘like for like’ products (banking, anyone?).
A key pillar of their thinking aligns around a concept they’ve coined as ‘Fame, Feeling and Fluency.’
- If a brand comes readily to mind, it’s a good choice (Fame).
- If a brand feels good, it’s a good choice (Feeling).
- If a brand is recognisable, it’s a good choice (Fluency).
According to System 1, the brand’s current market share can be explained by looking at the three Fs together, but future market share is a function of ‘feeling’. The science is in – if you feel more, you’ll buy more. Emotional led sales people around the world can finally say ‘I told you so’.
CEOs and leadership teams at Coconut, Tide and Starling are after one thing – market share. There are a lot of programatic and paid acquisition driven strategies that could lead them up the garden path, away from that destination. Here’s hoping they’ve realised it’s not just about products, feature, comparison tables and fancy apps, but it’s about hitting those three Fs harder than their peers. Brand investments like that still takes a degree of faith for senior leadership teams. Lucky startups are risk takers.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.