Acquire More Customers with Analytics

24 Jun 2024

Every Fintech needs new customers, but they can’t spend huge amounts of money to acquire them. Therefore, customer acquisition needs to be a well thought out, and money-conscious process. This article will cover how to achieve that.

Targeted Marketing

Digital advertising has created the ability for businesses to perform hyper-targeted advertising. By targeting your ideal customers more efficiently, you reduce how much it costs to acquire a single customer.

In order to perform this targeted advertising, you need to know your existing customers. More specifically, you need to know their demographics:

  • Age

  • Gender

  • Location

  • Income

  • Social media

  • Level of education

Fig 1: Customer demographics

Business demographics are a bit different:

  • Years in business

  • Revenue

  • No. of employees

  • Location

  • Industry

These data points enable you to perform the targeted advertising, directly affecting your Customer Acquisition Cost (CAC). It also enables you to create customer hypotheses, such as “Our customers are most likely to convert from LinkedIn.” Being able to perform these tasks and confirm these hypotheses is extremely important.

You can further improve your acquisition strategy by using customer behavior analytics to determine which groups of customers are superusers. These customers are the ones who are most invested in your product, so they are extremely important - they log in most often, make the most transactions, have the highest asset value.

They are your best customers, they’re the most likely to stay with you and because they appreciate your product, they’ll refer you to their people - which is why you should pay special attention to them.

Acquisition Funnels

Unfortunately, customer acquisition isn’t as simple as being acquired or not. It is a series of steps that each potential customer must take in order for them to use your services and pay you for it.

If you design this process well, it will be very good at moving the customer from one stage of the funnel to the next, until they start paying for your services.

Stages in the funnel (image below):

  1. Acquisition - visitor signs up to your product.

  2. Email verification - user confirms they own their email address.

  3. KYC verification- performing KYC is a confirmation of intention.

  4. Funding the account - customer shows intent by depositing money into their account.

  5. Activation - customer purchases an asset (crypto, stock etc.).

Fig 2: Acquisition Funnel with KYC bottleneck

Questions you’ll want to answer using data:

  • Which acquisition channels have the best and worst conversion?

  • What is the conversion rate of each stage in the funnel?

  • How many customers need to be acquired to get 100 activated customers?

  • What processes or initiatives increase conversion in each stage?

  • What processes have a negative impact on conversion in each stage?

Referral Campaigns

Once you have acquired a customer and gained their trust, they are primed to become a source of new customers for you. Getting this right reduces your Customer Acquisition Cost (CAC) and increases your brand value.

Incentive options for a referral program:

  • Each successful referral gets you an entry into a prize pool

  • Pay per successful referral

  • Rewards points or similar gamification

What you want is to identify one that works for your business. Gamification has become extremely popular in the crypto space, and can be very successful in Fintech too. Pay per successful referral works really well in high value services, whereas a prize pool may be more cost-effective for products where revenue per customer is lower.

To get your referral campaign right, you need to A/B test it. And for this, you need to collect data on how your customers interact with your referral process. Everything from different versions of campaign pages, images, wording, to differing incentives and outcomes.

A/B test everything from how many referrals come in to how many customers click on the referral instruction page. It is an iterative process where mostly small (but sometimes big) steps are taken in the right direction, increasing how many referrals you get per existing customer.

Conclusion

Customer acquisition is arguably the most important aspect of any successful business. It needs to be effective, while being cost-efficient. In this article, we’ve shown that data is an excellent way to make the right decisions when it comes to reducing your CAC and growing faster as a result.