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Going global? 3 MUST DO’s when assessing new markets for expansion and growth

Blog written by Greg Watts, CEO at Findr

You’ve established yourself in your first market, and now looking to expand to new ones.

When assessing new markets, what characteristics should companies look for and how should they prioritise them? 

What makes a good’ market and what makes for a risky one?

In this article, we’ll look at three key considerations for any business looking to enter new markets.

 

1) Assess the landscape

Do you know how many fintechs actively operate in the UK vs other markets across Europe?

In 2019, Demand Creation Partners undertook an assessment of the fintech landscape in Western Europe. It found that out of a pool of 7,200 companies, nearly 3,000 ”“ or 41% of the total ”“ are active in the UK.

Further, the data shows that 81% of all fintechs in Western Europe actively operate in just eight countries. This is illustrated in the breakdown below.

You can now start to get a picture of how the region is constructed, allowing you to make an initial assessment of the suitability of different markets.

It may make sense to target a market with less competition and potentially lower barriers to entry to create a compelling use case for future growth.

 

2) Identify your launch criteria

When considering options for expansion, it can be tempting to start with larger, more mature markets such as the UK or US.

Despite leaving the EU, the UK remains the leading fintech market in Europe, accounting for half the region’s VC deals ”” for example, the $80 million funding of BitFury and $110 million funding of Monzo.

However, even with significant investment, the UK can be a hard market to crack.

It’s mature, with just over half of all payments made via card. And even though the US and UK share the same language, there are subtle cultural differences which must be understood before engaging potential partners or signing up users.

To assess your chances of success in a particular market, it’s important to research and weigh up your launch criteria, such as:

 

  • Macroeconomic factors including GDP, economic performance and availability of government incentives.
  • Competitive landscape ”“ How many other fintechs operate locally? How do they differ from you? Do you offer a compelling advantage?
  • Barriers to entry ”“ Are these high or low? How will local legislation or regulation impact your launch?
  • Structure of the local retail and payments market ”“ Is it comprised of home-grown players you’ll need to establish partnerships with or global organisations with which you already have relationships?
  • Consumer behaviours and indicators, such as penetration of mobile phones and percentage of cash versus digital payments.

 

Knowing where you stand vis-à-vis these criteria will help you to realistically gauge and prioritize which markets to invest in.

 

3) Undertake a detailed market assessment

Now that you’ve prioritised your launch market(s), the next step is to undertake detailed assessments of each.

A market assessment is a comprehensive analysis of market trends, entry barriers, regulatory requirements, competition, risks, opportunities and available company resources. Whether you’re thinking of venturing into a new market or launching a new product, conducting a marketing assessment is a critical step in determining if there is a need or customer base for your product.

A well-executed market assessment will enable you to decide where to apply resources for the best return.

 

4) Develop a go-to-market plan

Now that you’ve prepared your market assessment, the next step is to develop a go-to-market plan to ensure successful entry. Some key considerations include:

  • Access to local talent is crucial. Recruit leaders and sales and marketing personnel with a thorough understanding of the market. Be aware, however, that securing the best people can be difficult for a lesser-known brand, so think carefully about your resourcing strategy. In the short term ”“ while momentum is being built and resources are constrained ”“ you can support functions such as product, legal, operations and technology from HQ.

 

  • Identify local partners who can help you raise awareness and introduce you to prospects ”“ for example, chambers of commerce, payment associations or retail consortiums. Who are the banks, acquirers, PSPs and retailers you need to cultivate relationships with? Can you leverage existing relationships? Choosing partners with a presence in your target markets will save you a lot of time.

 

  • Differentiate yourself from local players. Understand local issues and market nuances and develop a proposition that resonates. Ask local experts to review your collateral to ensure your messages are relevant and cannot be misinterpreted through subtleties of language.

 

  • Create an integrated demand generation plan to qualify opportunities for the sales team such as must-attend events where you can build relationships with target clients and partners.

 

  • Identify a local PR agency to support your launch and develop a map of local influencers to form relationships with ”“ for example, journalists, bankers and retailers.

 

Bringing it all together

When assessing markets for expansion, it can be tempting to prioritise more mature countries such as the UK or the US ”“ particularly when you’re under pressure from investors.

However, these markets often have higher barriers to entry, making them harder to crack.

The goal for any fintech must be to create one or more use cases that prove a solution works; that there’s genuine demand for it; and ultimately, that customers will use it. In order to create these success stories it may make sense to prioritise markets with lower barriers to entry, where the chances of success are higher.

Taking the time to identify criteria for market entry will allow you to focus your resources more effectively and accelerate your plans for growth.

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The Critical Role Partnerships Play When Scaling Fintechs

Blog written by Greg Watts, CEO at Findr

Alongside raising investment, securing the right partnerships is critical for business survival.

Indeed, in a recent research report from PwC, over 75% of CEOs rated partnerships as important’ or critical’ to their success.

Yet with many partnerships taking months if not years to come to fruition, it’s no wonder that so many businesses fail ”“ and waste considerable resources ”“ in the process.

So why do so many fintechs struggle with what we call the partnership problem?

Here are some reasons:

  • They haven’t identified the right target partners;
  • Their approach is too generic;
  • They haven’t spent sufficient time identifying key stakeholders;
  • Their offering and content doesn’t resonate with target partners;
  • They don’t spend enough time or resources in the right places generating awareness.

In this article for Fintech Scotland, we’ll explore why businesses struggle with the Partnership Problem and provide tools and tips to enhance your approach and accelerate your efforts.

 

Get focused

In theory, partnership development is a straightforward process.

However, many businesses often fail at the first hurdle ”“ which is to have a razor-sharp focus on targets.

For example, it’s quite common to hear that a fintech wants to create partnerships with all’ retailers or banks in a particular market, then expect their sales teams to hit the phones and secure meetings.

However, with finite resources, that approach often misses the mark.

Fintechs ”“ and indeed, all businesses ”“ need clear partnership criteria.

The criteria for each business will vary, but some questions to consider may include:

  • Which verticals, sectors or categories do you want to focus on? Within those, what are the priorities and why?
  • What are the characteristics of your target partners? For example, are they high frequency retailers such as coffee chains or do they boast high transaction values, such as luxury brands?
  • How easily can you partner with them? For example, a Tier 1 retailer such as BP or Asda is likely to take more time to partner with than a smaller coffee chain. Given how important time to market is ”“ it can often take months if not years to partner with large businesses ”“ targeting smaller partners initially to create case studies that demonstrate the value of your proposition may be a more efficient strategy.

Once you’ve evaluated your target partners, assign weightings to provide focus on where to spend your time and resources.

 

Sharpen your door opening approach by creating buyer personas

How often have you received a cold, un-researched introductory note on LinkedIn or via email?

It’s remarkable that so many businesses don’t tailor their approaches, then wonder why they don’t receive a response.

In fact, if you haven’t met someone before, you have less than a 3% chance of securing a meeting with them (unless you’re on Findr of course – where we average 27%)

It’s imperative you know as much as you can about your target partners before you approach them ”“ or any resources used to try and engage them will simply be wasted.

To maximise your chances of getting a meeting with a target partner, you need to make assumptions about what they may be looking for to help you tailor your approach.

To do this, it helps to develop buyer personas from which you can create content that makes them want to engage with you.

As you create the personas, points to consider are:

  • What problems do you fix?
  • What benefits do you offer? How do these compare to other players or competitors?
  • Why should they engage with you?
  • What channels do they engage with? How can you reach them?
  • Which events or forums do they attend?
  • Who ”“ if anyone ”“ do they currently partner with? And, critically, why would you be a better partner?

Cluster them to create segments with common challenges and issues you can solve.

Ultimately, you need to articulate why they should engage with you.

Once the personas have been created, you can focus on your content plan, encompassing your website, social media feeds, thought leadership and other marketing efforts.

 

Make it a team effort

Too frequently, partnership development and lead generation are viewed as the sales team’s responsibility.

Yes, the role of a salesperson is to sell ”“ however, he or she must have the full support of the business behind them to generate leads. Without that, the effort is likely to fail.

At Findr, we believe that the entire organisation should be involved in generating business and creating partnerships ”“ albeit in different ways ”“ and that any efforts not focused on growing the business should be questioned.

Thinking of it in these terms can help galvanise and focus your resources.

 

Bringing it all together

Creating partnerships sounds easy. However, without the right planning and focus, the results may be disappointing.

Being ruthlessly clear on who you’re targeting and why they should engage with you ”“ and then creating content that resonates ”“ is the most effective approach to creating long term, valuable partnerships.

Photo by Savvas Stavrinos: https://www.pexels.com/photo/monochrome-photography-of-people-shaking-hands-814544/