Notes from FinTech Connect 2019: Data Security Has Value, But Isn’t a Value Prop

“Making convenience secure”
“Protect your applications”
“Protect and grow your business confidently”
“Prevents the threat of breaches”

Anyone walking the aisles at the recent FinTech Connect conference in London reading the taglines displayed in the booths would have gotten a clear sense of the overwhelming significance of security in the FinTech space. Not that it should come as a surprise given the constant threat of crippling breaches and compromised data.

What is interesting about the threat and the proclamations of powerful counter-measures is that while the threat hangs like a cloud over the industry, the potency of security efforts effectively require a leap of faith. Just because an application hasn’t been compromised doesn’t mean it can’t be. And when the risk calculation includes the potential damage from a reported breach, even the smallest possibility looms large.

Moreover, the proof of an application’s security lies in the absence of problems. From a marketing perspective, that is a proposition that is very difficult to communicate: part of the customer value you’re delivering is a lack-of-disasters. And a lack-of-disasters is only a differentiating attribute if your competitors have all experienced breaches. In fact, then, data security is table stakes—vital, but not the thing on which you want to hang your positioning hat.

So if data security is important, but is impossible to prove or leverage as a differentiator…

  • Is there still a way to claim some ownership of it as an attribute?
  • Can you create value around an attribute for which nothing happening is a positive outcome?

The answer to both questions is “yes, through content marketing.” Developing and distributing a consistent, relevant, and valuable stream of data security content for prospects and customers is a proven, powerful way to instill confidence and build stickiness. Demonstrating data security expertise through content marketing does infinitely more than a promissory tagline to establish a position of trustability in customers’ minds and reinforce perceived value.

When done well, content marketing can create loyalty even in the face of low switching costs because customers and prospects become hooked on the valuable material delivered and come to recognize you as a knowledgeable and indispensable partner. Moreover, while it’s easy for a competitor to copy tagline promises of data security, it’s much more difficult to duplicate an effective content marketing engine.

 

 

Customer Segment Intelligence Delivers Balance to Your Customer Success Initiatives

In customer success management, there will always be a tension between treating each customer as special and unique in order to ensure their success, and serving all customers without exploding the CSM team budget. One way to strike a balance between these two poles is the collection, maintenance, and efficient utilization of customer segment intelligence.

Customer segment intelligence is the knowledge base of elements relevant to the sale and utilization of your product/service by companies within a target segment. These elements would likely include:

  • Key “firmographic” attributes of companies in the segment (e.g., size, geography) that might influence purchase and adoption
  • Market trends
  • Decision-making structures and influence networks
  • Typical needs and objectives related to your product/service
  • Propensity for and approach to technology adoption
  • Common objections to purchase
  • Common obstacles to implementation/utilization

Equipped with this kind of intelligence, SaaS companies can develop segment-specific customer success programs and segment “playbooks” that will produce better results more efficiently.  They achieve this by being adapted to align with the particular characteristics and meet the particular needs of companies in that segment. A “one-size-fits-all” onboarding program is almost always better than no onboarding program is likely to miss the mark for some customers.  A custom implementation plan is highly effective but unscalable.  A customer segment intelligence-based onboarding program strikes a balance between these extremes by delivering a template that applies to a group of customers, but is effective because it is built on the foundation of knowledge of the typical operational constraints on the companies’ ability to get quickly to value and capture quick wins.

As is the case with the aforementioned onboarding, most customer success initiatives benefit from segment intelligence. For example, it is much more effective and efficient to have a series of segment email templates for cross-selling and/or up-selling rather than each CSM writing new emails from scratch for every upsell/cross-sell opportunity and rather than using a single, generic “canned” email that fails to be compelling because it doesn’t speak to the specific segment needs. Similarly, understanding when breadth or depth of utilization should register either as a concern (too low) or an opportunity (very high) requires knowledge of the relevant segment-specific benchmarks rather than benchmarks based on the entire customer base, much of which may behave very differently than the customers in one specific segment.

Moreover, this intelligence delivers further operational efficiency gains by enabling lesser-tenured CSMs to ramp up and effectively help customers faster. Playbooks, templates, and diagnostics provide a foundation of proven tools and process that gives newer CSMs with good relationship-building skills the opportunity to succeed quickly.

In an upcoming blog, we will discuss best practices for gathering and distributing customer segment intelligence.

Where online sale of lip gloss and B2B software customer retention converge

Sometimes marketing inspiration and confirmation of instincts comes from places you wouldn’t normally look. This recent blog post on getelastic.com is case in point: http://www.getelastic.com/the-easiest-way-to-increase-conversion-by-20/. On the face of it, this post would seem to be quite far afield from the world of customer retention in B2B software, or any of the other B2B industries in which EMI works for that matter. And indeed there isn’t much that links lip gloss and software; but there is a link in the approach to solving marketing challenges.

The getelastic blog post starts off with a research-based data point: ecommerce customers are 20% more likely to purchase a product that has at least one customer review. Then, based on that data point, it presents several reasonable ways to obtain that key *first* review. The ways to do this are only important if you’re interested in driving web purchases. What’s important outside that context – and especially in a B2B context like CSM strategy for SaaS – is the way in which marketing research and analytics have identified an operational measure which becomes the strategic focus. Increasing web sales is obviously the business goal, but it’s so broad and influenced by so many factors that it’s unwieldy as an operational focus. By isolating one key factor that has a significant impact on the objective, exploration and testing of tactical options becomes significantly easier. In mathematical terms, you solve for “reviews” because you know that it will drive conversions.

Take this approach out of the world of online sales of lip gloss and into the world of B2B software customer retention and it is still just as effective. Retention is impacted by a multitude of factors –satisfaction, perceived value, switching costs, depth and breadth of utilization – each of which can be affected by a set of strategies and tactics. To optimize retention, you must first sift through all the potential factors to identify those that actually have the greatest impact. Once you have effectively ranked the factors based on their likely impact, then you can develop retention marketing strategies – new communications approaches, new messaging, testing – that specifically and precisely aim to drive improvement in that factor.