The “David vs. Goliath” trope is a fine, inspiring tale of the little guy persevering against all odds. But what if your business is the proverbial Goliath? All of a sudden the Davids of the world become less charming.
This is the reality for many large, legacy corporations who – in the midst of ongoing technological acceleration – find themselves practically surrounded by Davids. Lean, agile companies, well-funded, fantastically branded, and leveraging the latest tech to take every advantage available.
Nowhere is this more apparent than in Financial Services. Seemingly overnight, legacy banks and insurance providers found their century-plus of industry dominance challenged by up-start start-ups. Now, simply being established isn’t enough. In fact, while challenger banks only generated $20.4 billion in 2019 (by comparison, Sunlife Financial made $30 billion on their own), by 2027 they’re predicted to reach nearly half a trillion dollars. These disruptors like KOHO, Simplii, and EQ are eliminating brick & mortar, launching user-friendly apps, and cutting back costs to win the pocketbooks of younger generations.
So what can legacy Goliaths do about it?
It’s pretty simple, really – they’re more innovative and much, much quicker to respond to changing customer demands.
Legacy corporations are hampered by their enormous scale, and decades of stagnant processes. Making any minor change at a major bank can feel like steering a cruise ship – turn the wheel and in about an hour the boat will be pointed in the direction you want.
On the other hand you have the challenger banks, who operate less like a classic financial service company and more like the swift-moving tech companies that define places like Silicon Valley. These companies not only are able to offer a highly personalized experience, gorgeous, glitzy branding, and extremely targeted ads, they also leverage performance marketing tactics such as motion design in their ads, user-generated content, and using the channels where their audience hangs out (they can get onto TikTok faster without the bureaucratic red tape).
The branding is, of course, a major part of the equation. The FinTech Times even deigned to ask “Is Challenger Bank Success All Down to Branding?” And there’s no denying the bright oranges and pinks that define challenger banks stand out amidst the solemn blues and greys of their legacy competitors. For example, check out this work we did for SALT, a crypto-backed loan company:
But it goes beyond the colour palette – the personalized, more human interaction offered by user-experience-first challenger banks, unhampered by dated core technology is just that much more appealing to the newer generations.
“A more ‘human’ brand identity matters most to digital natives, who have likely never considered a bricks and mortar bank premise as a primary point of contact”
Your business’ brand is a bit like its soul – and people are searching for their proverbial soulmate, for brands who share their values. While large legacy banks have coasted on their air of authority for decades, people are increasingly looking for something, well, a little less cold.
While “digital marketing” may be used to describe 99% of campaigns these days, the truth is there are individual, nuanced streams of marketing that fast-moving, tech-driven brands are leaning on, often overlooked by the legacy players who still prefer old-school radio and television – channels increasingly less popular among the up-and-coming generations. One of these is performance marketing.
Performance marketing specifically refers to campaigns that only pay service providers after specific, trackable goals have been achieved. A great example of this is Cost Per Click (CPC) ads, where you only pay for clicks on your ad. But performance marketing also drills down to Cost Per Sale (also called affiliate marketing), or scales up to Cost Per Impression (CPM) ads. The idea is that you literally get what you pay for – and you’re paying to engage potential customers.
This is a huge advantage for challengers looking to upset legacy dominance. With leaner budgets, spearfishing becomes more cost-effective than casting a wide net. While tossing up a billboard may have been an effective way to put as many eyeballs on your ad as possible, it was expensive – with no guarantee those eyeballs were attached to people who fit the profile of your customers.
Sign into Netflix, receive 30 movie recommendations based on your preferences. Log on to Spotify, and enjoy a custom playlist designed to delight based on your favourite songs. And Amazon? Expect to be referred to highly specific products customers just like you bought. This is the experience your customers are coming to expect across industries.
Legacy industries, like banking and insurance, are no different. People are increasingly willing to sacrifice the comfort and tradition of the old-school for the custom, personalized, tech-first experience offered by challengers. Whether it’s hybrid bank accounts with special features such as sub accounts or better earn rates because there's no brick and mortar costs, insurance that is activated as soon as you're done filling out the online form or credit cards that round up your change to invest it and help you budget better, the offers from challenger banks are getting more and more tantalizing.
The biggest thing holding the Goliaths back is an outdated corporate mindset, one which prefers things that have worked rather than what will work. Broadly speaking, you need to change from a “Complacency Mindset” to a “Future-focused Mindset.”
Think like a challenger:
"Radical innovation requires radical changes in processes, skill sets, technology, culture, and mind-sets—all of which can be daunting and require time, significant investment, and focused commitment."
Once you’ve changed your mindset, it’s time to hop in your ship and blast off. Here are 3 to get you challenging the challengers:
You know those nimble, tech-enabled companies causing waves in your industry? We’re making some waves of our own, elevating the accessibility and quality of design by leveraging global talent.
Whether it’s designing an engaging performance marketing campaign or refreshing your brand to connect more deeply with your customers, Superside works with legacy companies to offer them the design advantages they need to keep pace with challengers.