Creating a Market-Buyer Profile™
In our last post we began to address one of the root causes of a fintech vendor’s growth frustrations, namely, “Too little focus on the Buyer”. That post described why understanding buyer needs in proper detail is of critical importance. This entry will talk about how to document buyer needs. This post goes deeper than most because buyer understanding is the lynchpin of growth execution.
The Norm: Guessing
For strategic growth – beyond organic revenue – the fintech vendor is selling to new buyers and often mistakenly assumes that the new buyers have the same needs as the existing customers. Even existing clients being offered a major, new product will not have the same needs as they have had to-date. In formulating the strategy, the vendor will usually do a market analysis and uncover high-level buyer care-about’s, but this is not nearly enough detail to design a compelling, urgent solution.
A telltale sign of insufficient buyer understanding is that the designed solution becomes bloated because vendors tend to err on the side of over-engineering “in case” the component is needed. The hundreds of trade-off decisions that must be made are difficult. The fintech vendor is forced to guess about things like feature scope, support mechanisms, required partnerships, product innovation, etc., etc. The fundamental answer to these trade-offs is “it depends on who is buying the product and why”.
Best-Practice: Profile the Market & Buyer
To get to the proper level of understanding of new buyer needs, the fintech vendor must document the urgent needs of the buyer institution (not the needs of the personas in the buying group). The fintech vendor must uncover answers to questions like the following sample:
- What are the urgent and compelling needs of a buying institution?
- Why haven’t their needs been met?
- What would be the ideal solution to get their needs met?
- Where would they get such a solution?
- And many more
The most important principles in this exercise:
(1) Make it about the buyer, not the vendor (easy to say, hard to do). Focus on what the buyer wants, not what the vendor has
(2) Understand all the buyer needs, not just the functional needs. The buyers will likely have preferences about pricing structure, onboarding, partnerships, architecture, security, and much more,
(3) Consider the needs of 80% of a market-full of buyers. For this exercise, ignore infrequent use-cases and individual buyers.
How-To: Timing & People
Buyer needs can be documented in a tool like the Market-Buyer Profile from KGA, but any documented needs analysis will do.
Ideally, the Market-Buyer Profile can be done prior to designing the solution (certainly prior to investing in the design). As discussed above, without the Market-Buyer Profile, the design will be loaded with guesses and become bloated.
A key consideration when performing the analysis is which people to involve from inside and outside the organization. Market experts should create the deliverable, not product experts. The fintech vendor already knows plenty about the products and the exercise must not be biased by what the vendor offers. Internal market experts can often be found in Sales, Solution Consulting, Client Onboarding, and Relationship Management. External experts might include industry analysts, publishers, partners, current / former clients, and more.
The first effort in creating a deliverable like the Market-Buyer Profile is to specify with significant granularity which market segment and which solution space is being documented. If the product/market definition is not specific enough, the deliverable will include generalities. The market is sufficiently granular when there is a belief that 80% of that market has the same needs. For example, “US Banks” is not granular enough since banks in different asset ranges will have different needs. The granularity of the solution space is influenced, but should not be determined, by the vendor’s solution space. For instance, if the market is “Canadian Indirect Auto Lenders”, the lender-borrower lifecycle must be understood, but if the vendor has no solution for collections & recovery, then that might be excluded for the exercise.
After product/market definition, secondary research is almost always required. Usually, the fintech vendor has research about the use of its products in the market; however, the buyer-needs research must be about the buyers in their business. Why does the buyer want to urgently invest in the solution scope being examined? Primary research is hardly ever required: the answers to the key questions are out there but must be collated into the buyers’ perspective.
The final part of the methodology involves the market experts (above) drafting the Market-Buyer Profile and validating their perspectives with those not involved in the draft. It must include plenty of input from outsiders. The buyer needs deliverable leads to the design of the solution that meets the compelling, urgent needs of the new buyers.
With a strong understanding of buyer needs, it is MUCH easier to design the compelling, urgent solution. How to do the design that goes beyond the functional needs will be the subject of future blogs. We’ve already posted a series on the design of effective partnerships.