tag:econsultancy.com,2008:/topics/product-management Latest Product Management content from Econsultancy 2016-12-19T10:00:00+00:00 tag:econsultancy.com,2008:BlogPost/68643 2016-12-19T10:00:00+00:00 2016-12-19T10:00:00+00:00 Why hackathons are valuable for marketers as well as techies David Moth <p>The events range in size and prestige, from small internal hackathons to competitions hosted by tech giants where there are big cash prizes on offer.</p> <p>While they’re normally associated with techies and coders, the Econsultancy and IBM iX hackathon I attended was aimed at inspiring marketers to consider new customer experiences and ways of working.</p> <p>It began with a discussion around the importance of Design Thinking, before the marketers broke into groups and were challenged to conceptualize product ideas that would ease existing customer pain points.</p> <p>For those unfamiliar with design thinking, this series of posts is a perfect way to get to grips with the concept:</p> <ul> <li><a href="https://econsultancy.com/blog/68503-what-is-design-thinking/">What is design thinking?</a></li> <li><a href="https://econsultancy.com/blog/68509-why-is-design-thinking-suddenly-so-important/">Why is design thinking suddenly so important?</a></li> <li><a href="https://econsultancy.com/blog/68510-how-can-marketers-employ-design-thinking">How can marketers employ design thinking?</a></li> </ul> <p>But aside from the lesson in design thinking, the event was a useful insight into how hackathons work and how they can be a worthwhile exercise for marketers.</p> <p>Here are some of my takeaways on why hackathons aren’t just for coders. We're also planning to run some more hackathons in partnership with IBM iX in 2017, so Econsultancy subscribers should look out for more information on how to apply.</p> <h3>Drags people out of their comfort zone</h3> <p>The most obvious benefit of a hackathon is that it gives people a day away from their regular tasks.</p> <p>All jobs have a certain routine or rhythm to them, and it’s important to mix things up to provide some variety and inspiration.</p> <p><iframe src="https://www.facebook.com/plugins/post.php?href=https%3A%2F%2Fwww.facebook.com%2Fzuck%2Fposts%2F10102285103820421%3A0&amp;width=500" width="500" height="511"></iframe></p> <p>Hackathons give people the opportunity to step out of their comfort zone and take on a new (and hopefully fun) challenge, if only for an afternoon.</p> <p>Stepping away from the computer to a new location – ideally off-site, not just a meeting room – can be invigorating and provides relief from the day-to-day grind.</p> <h3>Helps you to see the bigger picture</h3> <p>In the rush to complete tasks and hit deadlines it’s understandable that people become focused on the priorities and goals specific to their business unit.</p> <p>By challenging employees to consider customer pain points outside of their normal area of focus it forces them to take a broader view of the customer experience.</p> <p>Ideally this will give them a fresh perspective on their own role and how it fits within the customer journey.</p> <p>It might also encourage them to consider new solutions and ways of working when dealing with the familiar problems in their day job.</p> <h3>Puts the focus back on the customer</h3> <p>Design thinking is all about creating experiences that cater to the needs of the customer.</p> <p>Econsultancy’s <a href="https://econsultancy.com/reports/marketing-budgets/">research into marketing budgets for 2016</a> found that nearly three-quarters (73%) of company respondents are ‘working towards delivering cohesive customer experiences, rather than standalone campaigns or interactions’.</p> <p><img src="https://assets.econsultancy.com/images/0008/2464/cx_chart.png" alt="" width="345" height="426"></p> <p>But while customer experience has been an important trend within marketing for more than a year, many companies are still driven by business priorities rather than customer needs. </p> <p>At the IBM Hackathon attendees were asked to discuss pain points associated with a specific customer persona and then design a new product experience which solved that problem.</p> <p>Most employees probably don’t often get the opportunity to dedicate an afternoon to thinking about how to improve the customer experience, so the exercise is extremely useful for jolting employees into thinking about the broader customer journey and how they can impact it. </p> <h3>Work alongside new people</h3> <p>For the IBM hackathon we invited a select few of our subscribers, which gave attendees the opportunity to collaborate with new people from different businesses.</p> <blockquote class="twitter-tweet"> <p lang="en" dir="ltr">Our <a href="https://twitter.com/ibminteractive">@ibminteractive</a> Design Thinking Hackathon teams are just identifying customer pain points. Product ideas come next. <a href="https://t.co/CEk6LwNSPp">pic.twitter.com/CEk6LwNSPp</a></p> — Econsultancy (@Econsultancy) <a href="https://twitter.com/Econsultancy/status/805784694398844928">December 5, 2016</a> </blockquote> <p>This provides a useful networking opportunity, but more importantly we’ve found that people are more willing to open up when they aren’t around their normal colleagues.</p> <p>If you’re organising your own internal hackathon then it still gives people the chance to collaborate with new people, which will hopefully foster new relationships and help to break down those pesky silos.</p> <h3>New ideas</h3> <p>New ideas are the most obvious benefit, as it’s really the whole reason hackathons were invented. However, it’s not something we should overlook.</p> <p>While our Design Thinking Hackathon was focused on creating new products and processes, you could just as easily ask attendees to design a new marketing campaign.</p> <p>That’s exactly what <a href="https://blog.hubspot.com/blog/tabid/6307/bid/33369/How-to-Create-200-Hours-Worth-of-Marketing-Content-in-One-Night.aspx#sm.001sr30k9eo6fl3117d2lbkq7ozii">Hubspot did back in 2012</a>, hosting an event that gave its marketing team an evening to create an entire campaign from scratch in one evening.</p> <p>I’m a bit concerned by Hubspot’s measure of success for the hackathon - ‘we cranked out over a couple hundred hours of work in one night’ - but it’s still a great way of generating loads of new marketing ideas, alongside the other benefits mentioned in this post.</p> tag:econsultancy.com,2008:BlogPost/68625 2016-12-15T14:35:56+00:00 2016-12-15T14:35:56+00:00 What can marketers learn from SaaS (software-as-a-service) businesses? Ashley Friedlein <p>Popular categories include beauty and grooming, food and drink, and pets. Although startups such as Graze (healthy snack boxes on subscription) pioneered this space in ecommerce, the bigger players are rapidly trying to play catch up: Walmart (Beauty Box), Starbucks, Macy’s and others.</p> <p>Perhaps the most interesting is Amazon. In many ways, its Prime membership is a form of subscription. It aims to reduce friction and encourage repeat purchase and loyalty.</p> <p>Amazon’s Dash buttons are also designed to make repeat purchase super easy. Amazon’s Fresh service for groceries, <a href="https://econsultancy.com/blog/67992-how-amazonfresh-is-hoping-to-threaten-the-uk-s-big-four-supermarkets/">recently launched in the UK</a>, is not strictly speaking a subscription service but it is close to that, aiming again to take away purchase friction for your weekly shop.</p> <p><img src="https://assets.econsultancy.com/images/0008/2301/amazon_dash.png" alt="" width="800" height="433"></p> <p>It seems even relatively low-consideration items that might not have regular or predictable repeat purchase cycles can work within a subscription offering. Printer ink is increasingly sold ‘as a service’ via a subscription model, for example HP Instant Ink.</p> <p>These shifts in business model and proposition have implications, of course, for marketing.</p> <p>Among the more sophisticated and mature players in digital subscription marketing and selling are SaaS (software-as-a-service) businesses. So <strong>what can we learn from SaaS marketing and models?</strong></p> <p>First, it is worth understanding the key business, and therefore marketing, metrics for SaaS.</p> <p>If you believe you are selling something one-off, then you tend to think mostly about top-of-funnel metrics, and cost per acquisition (CPA) is based on a single conversion event.</p> <p>In a subscription business, however, the key metrics are about usage, churn and yield, with lifetime value (LTV) and acquisition cost payback periods being the most important marketing metrics. If you have good loyalty, you can typically afford to spend more to acquire and keep customers.</p> <p>Second, and this relates directly to loyalty and yield, successful SaaS businesses are obsessively product-centric. They focus on the product, for example not underestimating the importance of the user interface.</p> <p>Marketing’s job becomes less about pushing out a message and more about listening to customers in order to help refine and improve the customer experience. This might include supporting customers with relevant and helpful content: Tutorials, demos, better product imagery and information, checklists, usage suggestions, tips, community and so on.</p> <p>Third, service and support should be seen as a revenue source, not a cost centre. In the SaaS world, it is often said ‘customer success is the new sales’.</p> <p>If your mindset is only a one-off transaction, then any support or service seems like a cost that detracts from the value of the sale you made.</p> <p>As soon as you look at it from a subscription perspective, with a certain LTV and the opportunity to upgrade the customer to a higher-level subscription offering, service becomes a fantastic opportunity to engage with customers, delight them and increase their profitability and yield. I have argued before that service and support should be considered part of the marketing function.</p> <p>Finally, we can learn from the culture and processes that SaaS businesses typically apply, not just to marketing but their entire operations.</p> <p>Many SaaS services are not only subscription-based but also monthly, rather than annual, subscriptions. This forces them to stay good all the time because customers can leave as quickly as they arrive. They have to keep improving the product, keep the service levels high, keep comparing themselves to the competition.</p> <p>This means their operational rhythm is ‘agile’, their culture is about rapid iteration, test and learn, about automation and scaling, about being ‘always on’. All things I hear marketing functions aspiring to become.</p> <p>Perhaps it is worth trying to envision your product or service as a subscription offering if it is not already. Perhaps you should consider hiring a marketer with SaaS-type marketing expertise.</p> <p>How might you do your marketing differently as a result?</p> <p><em>For more on this topic, see:</em></p> <ul> <li><a href="https://econsultancy.com/blog/66034-the-pros-and-cons-of-subscription-ecommerce-models/"><em>The pros and cons of subscription ecommerce models</em></a></li> <li><a href="https://econsultancy.com/blog/68545-five-ways-subscription-box-services-can-increase-customer-retention/"><em>Five ways subscription box services can increase customer retention</em></a></li> <li><a href="https://econsultancy.com/blog/67458-six-things-that-make-a-good-subscription-service/"><em>Six things that make a good subscription service</em></a></li> </ul> tag:econsultancy.com,2008:BlogPost/68489 2016-11-10T14:29:00+00:00 2016-11-10T14:29:00+00:00 Five ways financial services companies are adapting to the new digital age Juliet Stott <p>At a recent event, A New Age of Digital Finance, ORM managing director Keith Nation said: </p> <blockquote> <p>The millennials are expecting to interact with banks in the same way they do with Uber. The younger generation are time poor and they expect a world of hyper convenience; and they want a frictionless digital relationship with their bank too.</p> </blockquote> <p>But <a href="https://econsultancy.com/training/digital-transformation/">digital transformation</a> in this sector is slow to happen. Legacy systems, disparate data silos, internal resistance to change, lack of digital expertise, and tight governmental regulations are just some of the problems financial service (FS) businesses are trying to solve to meet consumer demand.</p> <p>In the meantime, challenger banks and startup fintech companies are offering new products and services that are attractive to the new generation of digital-first consumers.</p> <p>At the event, guest speakers from the UK’s biggest names in retail banking – including Barclays and TSB, along with wealth management company Allianz Global Investors – addressed their digital challenges and presented ways they’re overcoming these issues. </p> <p>Here is what was said:</p> <h4>1. Seeking out the single customer view</h4> <p>A digital consolidated data-set, which can be used across all channels to provide customers with a seamless digital experience, is the <em>“nirvana”</em> said Julian Brewer, Head of Digital Sales and Products at TSB.</p> <p>But many banks, including TSB, have a long way to go; legacy systems, ownership rights over proprietary data and fragmented data sources are just some of the many stumbling blocks that prevent <a href="https://econsultancy.com/blog/65425-what-is-the-single-customer-view-and-why-do-you-need-it/">the single customer view</a> becoming a reality.</p> <p>Brewer said many of the banks are looking to find ways of bringing data together within a DMP; however this is a complex and costly endeavour.</p> <p>TSB uses a tool called Tealium Audience Stream to create a CMP (Customer Marketing Platform) which pulls the limited data sources available to the bank together into a single view, and delivers many of the benefits of a more traditional DMP.</p> <p>“From this, we’re able to use our first-party data to create real-time audience segments and tailor our digital onsite and offsite marketing to great effect, and make this experience more relevant to our customers,” he said.</p> <h4>2. Reclaiming digital content</h4> <p>In recent years, many asset manager marketers have fallen into the trap of giving their content to other sites, either for free (to aggregators) or have paid other publications (such as The FT or CityWire) to publish their content, in the belief that it will bring them closer to their clients and prospects.</p> <p>This has been a mistake, as these aggregators and publishers have ended up owning the relationships with the asset manager’s customers, and not shared any information on how the content was consumed.</p> <p>Tom Hughes, Head of Marketing at Allianz Global Investors, said: “Marketers need to understand the value of their own website and the insight it provides.”</p> <p>He said marketers need a change of mindset, as websites should no longer be viewed as just “shop windows.”</p> <p>“Websites need to provide a utility for clients; they need to have content that’s useful for them so they are are encouraged to return.</p> <p>"Every click, and every interaction that happens your website, is valuable. If you can work out the causation between this activity and the sale of a product, that’s gold,” said Hughes.</p> <h4>3. Taking control of your CRM</h4> <p>The advancement of digital has come with an abundance of data; and more pressure for marketers to answer questions from the C-suite such as:</p> <ul> <li>What’s the ROI on our spend?</li> <li>Who’s been on the website? What did they click on?</li> <li>Who opened that email? Where did they open it? From what device?</li> </ul> <p>In the past, when marketing was a linear process and the CRM was used to manage sales funnels, marketers didn’t get involved in data. But that’s all changed.</p> <p>CRM is now the hub of information and the crux of the relationship between marketing and sales.</p> <p>Jason Lark, MD at Celerity, said: “If you don’t have a hold on your CRM and how it connects with all the platforms you’re building, and if you don’t know how each communication is performing, then you’re going to fail.</p> <p>"You need a good website, with high performing content where you can capture data. [It’ll] underpin your relationship with your customers and your sales team.”</p> <h4>4. Putting the customer at the heart of the digital transformation</h4> <p>Barclays Bank has refocussed its business model and says it is putting its customers at the heart of everything it does.</p> <p>“We want to help our customers hit their financial goals and achievements, and we’re going to use our transactional level data to do this,” said Sharukh Naqvi, Barclays Bank's VP of analytics and personalisation.</p> <p>Barclays is not the only company realigning its business model to put the customer at the core. Disney has invested heavily in the customer experience.</p> <p>It’s created a piece of wearable tech, a wristband called Magic Band, which enables its customers to make purchases without a credit card or cash, gain entry to its parks and resorts, book Fast Passes, make dinner reservations and receive personalised offers.</p> <p>As Brian Solis, leading expert on experiential business models, said in his latest book:</p> <blockquote> <p>In order to be competitive, brands must get better not only at understanding and satisfying customers’ wants and needs but at anticipating them, even before customers know what they want and need.</p> <p>This proactive experience is quickly becoming the new standard.</p> </blockquote> <h4>5. Catering for more sophisticated audiences</h4> <p>The millennial generation are internet natives. They are mobile-first and learn, work, shop and socialise online.</p> <p>They expect speedy, efficient customer service across all channels, from any institution they choose to engage with, day or night. If financial services brands can’t provide great digital service, said Andy Farmer Executive Strategy Director at ORM, then these consumers will go elsewhere.</p> <p>“The rise of fintech companies like Funding Circle, Nutmeg and eToro is no surprise; they’re very attractive to digitally-able younger consumers. These brands aren’t taking huge marketshare at the moment, but they are nibbling away at the edges.”  </p> <p>Traditional banks are reacting to this change in a number of ways, such as creating “<a href="https://econsultancy.com/blog/68356-what-is-an-innovation-lab-and-how-do-they-work/">innovation labs</a>” within their businesses.</p> <p>And, in some cases, directly investing in fintech companies outright; all to keep pace with technology and remain competitive.</p> <p><em>For more on this topic, see:</em></p> <ul> <li><a href="https://econsultancy.com/reports/digital-transformation-in-the-financial-services-sector-2016/"><em>Digital Transformation in the Financial Services Sector</em></a></li> <li><a href="https://econsultancy.com/reports/digital-trends-in-the-financial-services-and-insurance-sector-2016/"><em>Digital Trends in the Financial Services and Insurance Sector</em></a></li> <li><a href="https://econsultancy.com/blog/67202-what-s-the-future-for-big-banks-in-a-fintech-world/"><em>What's the future for big banks in a FinTech world?</em></a></li> </ul> tag:econsultancy.com,2008:BlogPost/68420 2016-10-24T10:11:00+01:00 2016-10-24T10:11:00+01:00 How to make your mark as a disruptive startup Nikki Gilliland <p>So, where exactly should you start?</p> <p>Recently, we sat down with six executives from the <a href="https://econsultancy.com/reports/top-100-disruptive-brands-2016/" target="_blank">Top 100 Disruptive Brands</a> list, a report produced in association with Marketing week, to find out their top tips.</p> <p>You can see the interviews in full by watching the video below, or read on for a summary of what they said.</p> <p><iframe src="https://player.vimeo.com/video/184675406" width="640" height="360"></iframe> </p> <h3>Buying time</h3> <p>According to Eren Ogazir, the founder and CEO of Push Doctor, time is one of the most important factors for setting up a company. </p> <p>As a result, whether it is in terms of help from friends or family or free services from those around you, he emphasises how you should focus on buying yourself time in order to gain the flexibility you need.</p> <p>In doing so, you will be able to move towards the end solution at a quicker pace, without having to worry about finding extra income.</p> <h3>Simplifying the proposition</h3> <p>Justin Basini from ClearScore suggests that disruptive startups can be guilty of over-complicating their proposition, especially when entering a complicated market like finance or technology.</p> <p>However, the best thing to do is to hone it down to a single sentence so that it can be communicated to consumers in simple terms.</p> <blockquote> <p>In the case of ClearScore, it is “get your credit score for free for ever”. It doesn’t get any simpler than that – it is really easy to communicate. </p> </blockquote> <h3>Caring about the customer</h3> <p>It might sound obvious, but many startups focus on the end goal rather than finding out exactly what it is the customer wants from your product or service.</p> <p>The founder of Pact, Stephen Rapoport, explains how a non-existent marketing budget meant that he was forced to take other measures in order to get the word out to consumers.</p> <p>By using social media channels like Twitter, he was able to build trust on a one-to-one level with customers – even delivering the product in person. </p> <p>This enabled him to tweak and hone the company’s proposition, website and product in line with customer feedback.</p> <h3>Sticking to your guns</h3> <p>Having a strong vision for the company is a given, but Emma Chalwin, Marketing Leader at Salesforce, suggests that sticking to it in the face of opposition is key.</p> <p>Whether the obstacles are in the form of resistance to investment or simply people not believing in your idea, it is easy to waver at this point and bend to the perception of others.</p> <blockquote> <p>If you really believe that your proposition and your vision for the customer experience within your industry is valid, then really stick to your guns and take that risk.</p> </blockquote> <p><em>Download the <a href="https://econsultancy.com/reports/top-100-disruptive-brands-2016/" target="_blank">Top 100 Disruptive Brands report</a>.</em></p> tag:econsultancy.com,2008:BlogPost/68368 2016-10-12T15:11:43+01:00 2016-10-12T15:11:43+01:00 To win over millennials, brokerage firms rethink their digital services Patricio Robles <p>In an attempt to address that challenge, a number of upstart brokerages are rethinking how their services function and how they charge for them.</p> <p>For example, <a href="https://www.robinhood.com/">Robinhood</a> is a brokerage firm that has a unique proposition: _ts customers can trade only through the company's smartphone app, which is far more simple than those offered by many brokerages.</p> <p>The firm, which has raised over $60m in funding from investors, says that 80% of its users are millennials and the average age of its customers is 28.</p> <p>Not surprisingly, many of Robinhood's customers reportedly have smaller accounts, but the company is betting that as they increase their earnings and funnel more of their money into stock market investments, the loyalty it has built will pay off.</p> <p>Another startup broker, Divy, aims to attract millennials <a href="http://www.barrons.com/articles/two-new-mobile-investing-apps-for-millennials-1453527209">by adding</a> a social layer to investing and allows its customers to buy fractional shares of company stock with friends and family in increments of as little as $10. </p> <p>"Investing in very small increments, while looking at what your friends and colleagues are doing, helps you think about the markets much more broadly," the company's founder, Marc Teren, <a href="http://www.barrons.com/articles/two-new-mobile-investing-apps-for-millennials-1453527209">told Barron's</a>.</p> <h3>Applying familiar business models</h3> <p>Some brokers are rethinking their business models, going so far as to apply business models from other industries.</p> <p>For example, last month, Motif, a Silicon Valley-based brokerage startup that bills itself as a "next-generation online broker," <a href="https://www.motifinvesting.com/about/press/press_release/motif-enters-subscription-economy-introduces-motif-blue">launched</a> a subscription-based trading service called Motif BLUE.</p> <p>According to Hardeep Walia, Motif's founder and CEO:</p> <blockquote> <p>Today’s subscription-based economy means more affordable, customizable services. We don’t think that investing should be an exception, and that’s why we’ve set out to create the Amazon Prime of our industry.</p> </blockquote> <p>Motif BLUE allows customers to trade as frequently as they like without racking up transaction fees.</p> <p>Like many subscription services, Motif BLUE has multiple subscription tiers that offer different features and costs, and a one-month free trial is available.</p> <p>All tiers allow customers to create investment models, configure recurring investments and rebalance their portfolios without management fees.</p> <p>Motif says that its BLUE subscription offering "marks a shift toward business model innovation" whereas previously the company was "focused on product innovation."</p> <p>That's an important point for financial services firms that are attempting to court younger investors.</p> <p>While these firms can update their services and create new ones that are designed to appeal to their young customers, how those customers pay for those services is arguably just as crucial.</p> <p>This is because young consumers are often more comfortable with business models that are not as common in financial services.</p> <p>With BLUE, Motif can potentially lure customers who like the idea of all-you-can-eat trading for a flat monthly subscription fee.</p> <p>And millennial-focused Robinhood doesn't charge its customers transaction fees at all.</p> <p>It relies on other sources of revenue, such as interest from margin accounts, to cover the trading costs other brokerages charge their customers.</p> <h3>Will it work?</h3> <p>There's evidence that all of this is working. For instance, since its launch Robinhood has attracted over 1m customers.</p> <p>But the real question for brokerage firms that are rethinking how their services are structured and sold is whether millenials will stick with them as they grow up and their needs change.</p> <p>There's a danger they will graduate to more traditional brokers that might not meet their needs today but will tomorrow.</p> <p><em>For more on this topic, see:</em></p> <ul> <li><a href="https://econsultancy.com/blog/66536-digital-transformation-in-financial-services-challenges-and-opportunities/"><em>Digital Transformation in Financial Services: Challenges and opportunities</em></a></li> <li><a href="https://econsultancy.com/reports/digital-trends-in-the-financial-services-and-insurance-sector-2016/"><em>Digital Trends in the Financial Services and Insurance Sector</em></a></li> </ul> tag:econsultancy.com,2008:BlogPost/68273 2016-09-07T09:37:16+01:00 2016-09-07T09:37:16+01:00 Is customer loyalty extinct in financial services? David Moth <p>At a DMA event I attended this week several industry speakers discussed exactly this topic, and the prognosis for financial services appears to be fairly depressing.</p> <p>I’ll get the bleakest vision of the future out the way first.</p> <p>During an overview of disruptive fintech startups, Barry Clark from Future Foundation mentioned an app called <a href="https://www.knip.ch/">Knip</a> that acts as a mobile insurance broker.</p> <p>The app enables users to compare and buy insurance products, manage their policies, and even make a claim.</p> <p>While this sounds like a great service for users, this type of app has potentially dire consequences for financial services companies.</p> <p>As Clark pointed out, in this example Knip owns the customer relationship and products are completely commoditized. The insurance companies are just faceless providers.</p> <p>If these apps continue to gain popularity (and potentially branch into other areas, such as banking), should financial services companies stop investing in brand marketing altogether?</p> <p>Would it not make more sense to focus all investment into creating a brilliant back-end and operations team to ensure that integration with platforms like Knip is quick and simple?</p> <p>Stripping out marketing costs would also mean that products are cheaper for the end user.</p> <h3>Emphasising value over price</h3> <p>Following on from Clark, Katrina King from Direct Line Group (DLG) asked how financial services can combat price comparison sites by shifting their messaging to emphasise value instead of price.</p> <p>The harsh truth of the matter is that loyalty to insurance companies is mainly due to customer apathy.</p> <p>If people can be bothered to shop around for a new policy, then decisions are often driven by price - a reality reflected in the marketing messages we see from financial services companies. </p> <p><img src="https://assets.econsultancy.com/images/0007/8830/price_vs_value.jpg" alt="" width="800" height="421"></p> <p>The challenge for DLG, which shuns comparison sites, is how to avoid this race to the bottom and put the focus on the value of its services rather than the cost.</p> <p>The result was DLG’s recent ‘Fixers’ campaign featuring Harvey Keitel, which highlighted the ways in which the company helps customers when they have an emergency.</p> <p>For example, DLG provides a free hire car for 21 days if a customer’s own vehicle is stolen or damaged.</p> <p><iframe src="https://www.youtube.com/embed/QW0Y1cHpocM?wmode=transparent" width="640" height="360"></iframe></p> <p>King said that most customers only recognise the value of their insurance product when they’re complaining about something (e.g. “Why don’t you cover xx?”), as people buy on price assuming they’ll never actually have to make a claim.</p> <p>Therefore the campaign had to put a big focus on educating customers as to why value is important when buying insurance.</p> <h3>Great success</h3> <p>The Fixers campaign achieved excellent results for DLG.</p> <p>This slightly blurry slide shows that the number of people who said they feel close to the Direct Line brand increased by eight percentage points from August 2014 to September 2015.</p> <p><img src="https://assets.econsultancy.com/images/0007/8831/campaign_results.jpg" alt="" width="900" height="450"></p> <p>Furthermore, DLG received a number of positive emails from customers thanking the business for adding the benefits such as free car rental.</p> <p>As you can probably imagine, it’s not often that people write to their insurance company to say thanks.</p> <p>King said that the campaign was a success as it was created with the customer in mind. Furthermore, the messages were constantly tested and optimised to ensure maximum impact.</p> <h3>What does the future hold?</h3> <p>King’s final slide presented her view for how insurance brands can continue to compete with price comparison sites and fintech startups.</p> <p>That’s also where this post will finish.</p> <p><img src="https://assets.econsultancy.com/images/0007/8832/the_future.jpg" alt="" width="900" height="472"></p> <p><em>For more on this topic, read:</em></p> <ul> <li><a href="https://econsultancy.com/reports/digital-transformation-in-the-financial-services-sector-2016/"><em>Digital Transformation in the Financial Services Sector</em></a></li> <li><a href="https://econsultancy.com/blog/67919-five-fintech-start-ups-aiming-to-replace-traditional-banking/"><em>Five fintech start-ups aiming to replace traditional banking</em></a></li> <li><a href="https://econsultancy.com/blog/67202-what-s-the-future-for-big-banks-in-a-fintech-world/"><em>What's the future for big banks in a fintech world?</em></a></li> </ul> tag:econsultancy.com,2008:BlogPost/68159 2016-08-08T14:58:00+01:00 2016-08-08T14:58:00+01:00 Five ways fintech upstarts are disrupting established financial institutions Patricio Robles <p>Here are five ways fintech upstarts are disrupting large, established financial services players.<br></p> <h3>Unbundling</h3> <p>Historically, large banks served as one-stop shops and could count on their loyal customers to turn to them for all of their financial needs.</p> <p>For example, it was once a given that depositors would turn to their bank when they needed a personal, business or home loan. </p> <p>The internet changed that dynamic, and today, large numbers of consumers - perhaps the majority - aren't anywhere near as loyal to their bank.</p> <p>Instead, they are eager to shop around and comfortable using multiple providers to fill all of their financial services needs.</p> <h4>Example</h4> <p>In the wake of the Great Recession, many banks curtailed their lending to businesses.</p> <p>That created a void for upstart non-bank lenders like <a href="https://www.ondeck.com/">OnDeck Capital</a>, <a href="https://www.smartbizloans.com/">Smartbiz</a> and <a href="http://www.fundbox.com/">Fundbox</a>, which are all focused exclusively on helping small businesses access the capital they need to grow.</p> <p><img src="https://assets.econsultancy.com/images/0007/7814/smartbiz.png" alt="" width="807" height="423"></p> <h3>Creating better, more innovative products and services</h3> <p>Thanks in part to the unbundling trend, fintech upstarts often have the opportunity to create better products and services than their entrenched competitors.</p> <p>After all, what might be for a large financial institution a relatively small part of its business could be the entire focus of a fintech startup.</p> <p>That allows the latter to focus on building a better mousetrap and in turn win customers over.</p> <h4>Example</h4> <p><a href="https://www.sofi.com">SoFi</a>, an alternative lender which provides student loan refinancing, mortgages and personal loans, targets working professionals and has created an underwriting model that takes into account a borrower's education and career experience.</p> <p>In fact, as of this year, SoFi doesn't even look at a borrower's FICO score when making a lending decision.</p> <p><img src="https://assets.econsultancy.com/images/0007/7812/sofi.png" alt="" width="743" height="404"></p> <p>In addition to its unique underwriting model, SoFi offers its borrowers services such as career counseling, unemployment protection and access to community events.</p> <p>It even runs an Entrepreneur Program to help borrowers who are starting companies.</p> <h3>Improving customer experience</h3> <p>In addition to creating better products, many fintech upstarts have thrived by improving customer experience.</p> <p>While large financial institutions didn't have to worry about customer experience because of the historical lock-in they held, fintech companies use customer experience as a key point of differentiation, which gives them a real edge in customer acquisition and retention.</p> <h4>Example</h4> <p><img src="https://assets.econsultancy.com/images/0007/3863/mondo_8.jpg" alt="" width="250" height="444"> <img src="https://assets.econsultancy.com/images/0007/3860/mondo_5.jpg" alt="" width="250" height="445"></p> <p>Mondo Bank, a UK banking startup, <a href="https://econsultancy.com/blog/67613-what-banks-can-learn-from-mondo-s-record-breaking-1m-crowdfunding-campaign">raised over £1m</a> in less than two minutes in a record-breaking crowdfunding campaign thanks in large part to a simple but compelling goal: to build "a bank that’s as smart as your phone."</p> <p>While competing with big banks is not easy, <a href="https://econsultancy.com/blog/67730-fintech-startup-mondo-provides-slick-impressive-ux-review">Mondo's slick app</a> is a good example of how upstarts are creating customer experiences capable of wooing consumers away from entrenched financial institutions, many of which have antiquated customer experiences that leave a lot to be desired.</p> <p>Mondo isn't the first banking startup to focus on customer experience. Simple, a US-based branchless bank, launched in 2009 and was acquired by BBVA in 2014. </p> <h3>Offering better pricing</h3> <p>'You get what you pay for' is often true, but it isn't always true, especially when it comes to financial services.</p> <p>Consumers are increasingly aware of this and that means fewer and fewer of them are willing to pay a premium for a less-than-premium product or service.</p> <p>Fintech upstarts are exploiting increased consumer sophistication and decreased trust of large financial services providers to create offerings that have more compelling pricing.</p> <h4>Example</h4> <p>Fintech startups have taken aim at financial advisors, many of whom have come under fire for charging fees that skeptics argue are unjustified.</p> <p>Robo-advisors like <a href="https://www.wealthfront.com/">Wealthfront</a> and <a href="https://www.betterment.com/">Betterment</a> offer lower-priced alternatives that are automated.</p> <p>While the billions in assets under management that these two companies have accumulated constitute a small percentage of the market, traditional advisory firms have taken note and large firms, <a href="https://intelligent.schwab.com/">such as Schwab</a>, have launched their own robo-advisor offerings.</p> <p><img src="https://assets.econsultancy.com/images/0007/7813/betterment.png" alt="" width="769" height="279"></p> <h3>Targeting underserved markets</h3> <p>Even the largest financial institutions have left unfilled gaps in the markets they serve.</p> <p>In some cases this is intentional; underserved markets are often seen as being too small or risky to be worthwhile.</p> <p>That has created opportunity for forward-thinking upstarts, many of which not only hope to build a business serving these underserved markets, but to leverage them as footholds for later expansion into other markets.</p> <h4>Example</h4> <p>There are more than 2bn unbanked individuals around the world, and even in the US, by some estimates, 90m individuals do not participate in the banking system.</p> <p>One early fintech player, <a href="http://www.oportun.com/">Oportun</a> (previously Progreso Financiero), specifically focuses on the unbanked and underbanked Hispanic population in the US, offering unsecured loans to individuals with little to no credit history.</p> <p><iframe src="https://www.youtube.com/embed/kTTwRn0LoaI?wmode=transparent" width="560" height="315"></iframe></p> <p>Another upstart in the US targeting underserved consumers is <a href="https://www.lendup.com/">LendUp</a>.</p> <p>It has positioned itself as an alternative to traditional payday lenders, and "[strives] to provide an actionable path for customers in eligible states to move up and earn access to more money at a lower cost."</p> <p><em>For more on this topic, read:</em></p> <ul> <li><a href="https://econsultancy.com/reports/digital-transformation-in-the-financial-services-sector-2016/"><em>Digital Transformation in the Financial Services Sector</em></a></li> <li><a href="https://econsultancy.com/blog/67202-what-s-the-future-for-big-banks-in-a-fintech-world/"><em>What's the future for big banks in a FinTech world?</em></a></li> </ul> tag:econsultancy.com,2008:BlogPost/67736 2016-04-19T09:36:37+01:00 2016-04-19T09:36:37+01:00 Five great examples of creative commerce Patricio Robles <p>Here are five examples of companies taking advantage of so-called 'creative commerce'.</p> <h3><a href="http://www.nike.com/us/en_us/c/nikeid">Nike</a></h3> <p>Nike's NIKEiD service gives customers the ability to create their own shoes, apparel and accessories.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4018/nikeid-blog-flyer.png" alt="" width="470" height="213"></p> <p>When it comes to shoes, the level of customization offered is significant.</p> <p>Not only can customers choose the colors of the shoes and design elements on the shoe, in many cases they can change the material style and select a symbol for the tongue of the shoe.</p> <p>And they have the option of adding personalized text to the heel of their shoes, making them a truly unique creation.</p> <p>At times Nike capitalizes on events, like the retirement of NBA basketball superstar Kobe Bryant, and entices customers with the opportunity to customize limited-edition products.</p> <blockquote class="twitter-tweet"> <p lang="en" dir="ltr">The Kobe XI <a href="https://twitter.com/hashtag/MambaDay?src=hash">#MambaDay</a> iD is now available for 24 hours only. Make the moment yours. <a href="https://t.co/MXTKUYqosM">https://t.co/MXTKUYqosM</a> <a href="https://t.co/ekULdW8EWT">pic.twitter.com/ekULdW8EWT</a></p> — NIKEiD (@NIKEiD) <a href="https://twitter.com/NIKEiD/status/720443813647544324">April 14, 2016</a> </blockquote> <h3><a href="http://www.buildabear.com/">Build-A-Bear Workshop</a></h3> <p>Most companies add customization to their product mix but Build-A-Bear Workshop is a brand that is built on customization.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4013/5616800137_3b50b5b261_z-blog-flyer.jpg" alt="" width="470" height="314"></p> <p>The retailer, which has been in business for nearly 20 years now, invites customers and their children into its stores where they can let their imaginations run wild as they build their own stuffed toys.</p> <p>Build-a-Bear Workshop is publicly traded and generated over $375m in revenue last year, proving that creative commerce isn't just fun for customers but also profitable when employed well.</p> <h3><a href="https://blendbee.com">BlendBee</a></h3> <p>Creative commerce isn't limited to products we wear or use. Case in point: BlendBee, which offers custom tea blends.</p> <p>Customers select a base tea, up to eight ingredients, and a name for their blend, and BlendBee's "tea expert will create the best tasting tea from your ingredients."</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4016/blendbee-blog-flyer.jpg" alt="" width="263" height="162"></p> <h3><a href="http://villycustoms.com/">Villy Custom</a></h3> <p>Creative entrepreneurs are finding ways to customize products that historically have been quite expensive.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/4014/villycustoms-blog-flyer.jpg" alt="" width="470" height="243"></p> <p>Fleetwood, the founder of Villy Customs, created his company to allow customers to build their own "bad ass custom bikes."</p> <p>Claiming to be the "digital online cruiser bike builder," Villy Custom appeared on the television program Shark Tank in the United States, where he raised investment from billionaire internet entrepreneur Mark Cuban and real estate mogul Barbara Corcoran.</p> <h3><a href="http://www.funkysofa.com/">FunkySofa</a></h3> <p>True customization of large items, like furniture, is now accessible to everyday consumers through companies like FunkySofa.</p> <p>It allows customers to design custom sofas, as well as sleepers, loveseats, chairs, sectionals and ottomans. </p> <p>With many of the pieces customers have literally hundreds of combinations to choose from.</p> <p><img src="https://assets.econsultancy.com/images/0007/4017/funkysofa.jpg" alt="" width="706" height="280"></p> tag:econsultancy.com,2008:BlogPost/67500 2016-02-10T11:14:44+00:00 2016-02-10T11:14:44+00:00 What is digital product management? Ben Davis <h3>What is digital product management?</h3> <p><strong>A business <em>without</em> digital product managers:</strong></p> <p>Defined by waterfall processes, the I.T. department is isolated somewhere behind a locked door.</p> <p>Speed and safety of I.T. development is prioritised. These metrics are considered proportional to efficiency (and ultimately revenue) with less regard to customer satisfaction once requirements documents have been created.</p> <p>Application managers exist, if not in title, then in function. For example, there may be one developer who knows a customised <a href="https://econsultancy.com/blog/67153-is-it-time-to-trade-your-cms-for-a-static-website-generator">CMS</a> or <a href="https://econsultancy.com/reports/ecommerce-platforms-buyers-guide">ecommerce platform</a> better than anyone else.</p> <p>This means that a lot of important decisions are taken by an employee that isn't incentivised to improve customer experience. That's almost expediency in the eyes of some product management zealots.</p> <blockquote class="twitter-tweet"> <p lang="en" dir="ltr">"what the user wanted"... an illustrated <a href="https://twitter.com/hashtag/usability?src=hash">#usability</a> perspective on design/consumer research <a href="https://twitter.com/hashtag/mr?src=hash">#mr</a> <a href="http://t.co/IteNx8hE">pic.twitter.com/IteNx8hE</a></p> — Amy Santee (@amysantee) <a href="https://twitter.com/amysantee/status/193429307153068033">April 20, 2012</a> </blockquote> <p><strong>A business <em>with</em> digital product managers:</strong> </p> <p>Teams are held accountable for understanding customer needs and improving products or experiences to suit.</p> <p>Product management teams focus on creating minimum viable products (MVPs) quickly and then iterating ahead of full release.</p> <p>The development environment must facilitate product managers' involvement, individuals who should have both business and tech nous.</p> <h3>How is it implemented? </h3> <p><strong>1. Define your digital products</strong></p> <p>Businesses need to define their digital products. For a bank this could be a mobile banking app, a deposit machine in branch, the website homepage etc.</p> <p>These products are often identified through distinct customer need (banking on the go, avoiding queues) or business need (reducing call centre dependency, or speeding up service).</p> <p>How will improvement to these digital products be measured? This is another consideration - perhaps an increase in <a href="https://econsultancy.com/blog/67473-seven-conversion-rate-optimization-trends-to-take-advantage-of-in-2016">conversion rate</a>, a change in customer banking habits etc.</p> <p><em>Econsultancy's blog could be defined as a digital product</em></p> <p><img src="https://assets.econsultancy.com/images/0007/1608/Screen_Shot_2016-02-09_at_15.27.06.png" alt="econ blog" width="615"></p> <p><strong>2. Pair product managers with parts of the customer experience</strong></p> <p>This could mean assigning a product manager to money transfers within the banking app, for example.</p> <p>Product managers here have freedom to both iterate existing functionality, as well as conducting more fundamental changes if they're shown to be achievable and valuable.</p> <p>For example, this product manager might recognise that a wholly separate mobile method of transfer would be preferred by users.</p> <p><strong>3. Create and test MVPs</strong></p> <p>End users are involved early on in the <a href="https://econsultancy.com/blog/67341-digital-marketing-incubation-how-to-develop-a-test-learn-culture-2">testing phase</a>, providing feedback on product utility that could provide a counterpoint to the views of internal stakeholders.</p> <p>Businesses transitioning to this style of iteration often begin with a siloed project in a lab environment, demonstrating proof of concept before moving into the broader business. </p> <p><em>Image via Lean Startup</em></p> <p><img src="https://assets.econsultancy.com/images/0007/1612/mvp.jpg" alt="mvp" width="349" height="278"></p> <p><strong>4. Foster developer and manager interaction</strong></p> <p>Frequent two-way interaction between product managers and developers, who are preferably co-located, is the only way to ensure that customer needs are met in the production process.</p> <p>This necessitates developers and managers who understand each others' roles and can therefore approach development in the same way.</p> <p><strong>5. Measure and incentivise performance</strong></p> <p>Conversion rates and direct customer feedback are more important than their preceding business outcomes (such as platform change).</p> <p>That's to say that appropriate customer-focused metrics should be in place to determine the success of any new or improved product.</p> <p>Outcome for the customer is prioritised above clean handovers and untouched specifications. Failure, as we all know, is not necessarily a bad thing, but it should be defined in the right way (and as quickly as possible).</p> <p><img src="https://assets.econsultancy.com/images/0007/1614/incentive.png" alt="incentives" width="600"></p> <h3>Who is a digital product manager?</h3> <p>Digital is maturing quicker than employee skills. That means tech-savvy businessmen and business-savvy techies are still gold dust.</p> <p>Digital product managers can be C-suite in waiting, such should be their grasp of technology, user experience, <a href="https://econsultancy.com/blog/67346-agile-development-what-do-marketers-need-to-know">agile methodology</a>, finance and marketing.</p> <p>Interpersonal skills are also important, given the sprawling nature of a product manager's role (liaising with multiple departments).</p> <h3>Why take this approach?</h3> <p>Failure is faster and more diverse, leading to greater innovation. This ultimately should lead to increased and possibly new revenue streams.</p> <p>Customer loyalty is engendered by a business that is transparently innovating. Brand advocates are further brought into the fold and frustrated customers are heard.</p> <p>An agile environment is also more exciting and empowering for the best and the brightest recruits.</p> <p>For more information on digital transformation, <a href="https://econsultancy.com/training/digital-transformation/">see the Econsultancy digital transformation hub</a>.</p> tag:econsultancy.com,2008:BlogPost/67105 2015-10-29T14:12:50+00:00 2015-10-29T14:12:50+00:00 Knowing what you're not: defining your design principles Ben Davis <h3>GoCardless</h3> <p>At #canvasconf last week, I listened to Tom Petty, Head of UX and Design at GoCardless.</p> <p>Tom detailed how the team at GoCardless went about creating a new product and defining design principles in the process.</p> <h3>Creating a new product</h3> <p>Initially, the company had two products; a Direct Debit payment dashboard for small companies and an API allowing integration with large corporations such as The Guardian and Trip Advisor.</p> <p>The challenge was to cater for those companies that were falling down the gap. These were companies that didn't want full integration but needed more control than the small business product provided.</p> <p>Whilst there was a rationale for developing a new product, the team knew the danger in creating a middle option which might be all things to all people.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/8359/screen_shot_2015-10-25_at_18.17.08-blog-flyer.png" alt="gocardless on mobile" width="300"></p> <h3>People, provocations, principles</h3> <p>In designing this new product, the GoCardless team followed a loose philosophy that Tom termed 'people, provocations, principles'.</p> <p>'People' is about knowing who the customers (merchants) are who will use this new product. Design necessitates deep knowledge of the prospective user and GoCardless needed to know exactly what sort of companies they would be targeting.</p> <p>Provocations (or questions - though sadly this doesn't start with a P) refers to how a company can respond to a customer's needs. Tom discussed the creation of a product roadmap constructed out of customer questions, rather than merely product functions or presumed answers.</p> <p>This roadmap of questions allows for much more focused and relevant product development, as a form of customer problem solving. </p> <h3>Creating principles that can be disagreed with</h3> <p>Design principles should be framed as decisions. They need to be points of view that can be disagreed with.</p> <p>Phrases such as 'keep things simple' do not convey an opinion (who would opt to overcomplicate for the sake of it?) and the GoCardless team took a while to come up with principles they could stand by.</p> <p>Looking at other companies for inspiration, Tom cited Amazon's brand principle of 'investment over profits' as an example of a definite point of view, one that other companies may disagree with or even flip on its head.</p> <p>So, after much trial and error, GoCardless settled on three design principles. Tom highlighted how they have to be memorable (perhaps make them rhyme), otherwise they will be quickly filed away and forgotten, rather than becoming rules to work by.</p> <ul> <li><strong>Small users over all users</strong></li> <ul> <li>Start simple and hide the gnarly stuff. Customers should land at a product aimed for the small business, then can gradually take control of more features.</li> <li>One example of this is the ability to sign up to the service by adding the minimum required information. With this principle, small users are not allenated by a complex product.</li> </ul> <li><strong>Attention over retention</strong></li> <ul> <li>Design to prioritise features that demand attention. Don’t take users down the rabbit hole, give them what they need first and allow these functions to be performed as quickly as possible.</li> </ul> <li><strong>Hammer over the handyman</strong></li> <ul> <li>Focus on doing one thing really well. Be the best at recurring payments, don't diversify into loans, invoicing, analytics, commerce, or become a bank.</li> </ul> </ul> <p><img src="https://assets.econsultancy.com/images/0006/8360/Screen_Shot_2015-10-25_at_18.16.11.png" alt="GoCardless website" width="615"></p> <h3>Organisational culture</h3> <p>This is just a short case study about design principles, but I thought GoCardless' three principles were eloquent enough to provide food for thought for companies in the midst of <a href="https://econsultancy.com/blog/66223-with-a-blank-sheet-what-organisational-structure-would-you-choose-for-marketing-and-digital">organisational change</a>. </p> <p>Celebrating the fact that you can’t please all of the people all of the time is a necessity when defining great digital products for a defined audience.</p> <p>In organisations still failing to compete in digital and wondering how to meet the needs of customers online, creating new design principles may be one vital weapon in the <a href="https://econsultancy.com/blog/67031-chief-customer-officers-ccos-a-fad-or-the-future">Chief Digital Officer</a>'s arsenal.</p>