Despite a difficult market, experts suggest fintechs remain savvy and selective when it comes to how they are pursuing new customers. Instead of simply pursuing larger market share by any means necessary, startups may benefit more from targeting customers who will offer them greater lifetime value.
Startups can also opt for fewer, more credible touchpoints. For example, partnering with a prospective customer’s employer can help build trust. Additionally, companies can also explore alternative acquisition channels like ChatGPT and TikTok to reach potential customers.
JPMorgan Chase is one example of how companies are selecting very specific types of customers, offering them incentives to open a checking account. It is essential for fintechs to consider the churn rate of their customer — the rate at which customers leave the company — and maintain it at an acceptable level.
Stephanie Choo, a general partner at Portage Ventures, mentioned that traditional fintechs often have low customers that don’t pay back the customer-acquisition cost within three to six months, creating a less valuable base. This is why it is important for fintechs to take a quality over quantity approach when it comes to attracting new customers.
Cynthia Kleinbaum Milner, Chief Marketing Officer at MoneyLion, suggested that fintechs look into alternative acquisition channels like ChatGPT and TikTok to reach potential customers. Ron Shevlin, Chief Research Officer at Cornerstone Advisors, highlighted the importance of targeting customers who will offer greater lifetime value.
Christie Horvath, founder and CEO of Wagmo, mentioned how fintechs can use pockets as distribution agents to reach potential customers with fewer touchpoints. She also emphasizes the difficulty of using TikTok as an acquisition channel, but suggests it may be a worth trying.
Overall, despite the challenging market, startups can still find success by being smart and selective about which customers they pursue, where they are acquired from, and what methods are used to acquire them.
