Are fintechs and insurtechs bad at PR?
According to business information tool Crunchbase, there are over 25,000 fintechs and 2,000 insurtechs in the world today. With more than 300 additions to their database in the past year alone, new startups are constantly coming online. Each new business will have to secure the awareness and trust of consumers, partners and investors alike. Good PR is a critical step in that endeavour – yet so many founders seem to misunderstand what PR is and what benefits it can bring to their business.
As a journalist, I get to see first-hand the discordant and occasionally haphazard way in which some fintechs and insurtechs – particularly newer entrants – approach the topic of PR. So we asked two industry insiders, with long lists of fintech and insurtech clients, to give us their perspective of raising awareness as a new business.
Do fintechs and insurtechs understand the need for PR?
One of the first mistakes that founders make is to assume that they’re too small for PR, or that brand communications is only for larger players with entire teams of people. This isn’t the case; indeed, as a fledgling company, the need to raise awareness in the days after launch is more important than at any other time in a company’s journey. Research suggests that 20% of businesses fail in the first year – so getting your name out there is essential.
Thankfully, startups today appear to understand the need for PR. According to Kimberley Waldron, Founder and Managing Director of SkyParlour – an international communications agency with clients in fintech, payments, cybersecurity and ecommerce – awareness is growing.
“I think a lot of modern start-up owners understand the importance of PR and are familiar with the benefits it can bring a business, especially in ultra-competitive fields like technology, fintech and insurtech,” Waldron tells us.
But there is still progress to be made: “For one, there’s still some work to be done to ensure business owners understand the true value that PR can bring to their company and when to use it,” Waldron tells us. “Like with anything, you get out what you put into PR, so it’s important for companies to work hand-in-glove with their chosen PR partner, especially during the early days of a relationship. Ultimately, you need to be working towards a broader goal.”
Simon Hayes, Managing Director of NextGen Communications, which represents an impressive list of insurtech innovators and startups, agrees that we have made progress in cementing the importance of good PR: “Just about every insurtech we meet these days understands the power of PR in helping them build their brand and tell their story – two things that are needed to oil the wheels of their success.”
But he accepts that, with some clients who have had bad experiences in the past, it can be difficult to dispel preconceived notions of the PR industry. Some firms let the side down by charging high fees to cash-strapped startups and then fail to deliver tangible results; or they might throw all of their resources at the initial pitch, calling in their most experienced and charismatic executives, before passing the account itself onto junior staff.
“The answer is to set clear KPIs in advance when using a PR firm including expected outputs, outcomes and results,” Hayes says. “Also, insurtechs should not be afraid to ask for case studies and testimonials from real clients. Any PR agency worth their salt will be happy to provide these things.”
Hayes explains that, like any business relationship, it will take time to build trust between an agency and a client. But generally, you should start to see value emerging after the first four months.
“The first month will be spent on discovery, strategy and planning, and the next three months on delivery,” he tells us. “If you are uncertain of the value, you should ask to set up a trial period, like a paid proof-of-concept (POC). This way, you are limiting the downside of your PR investment. If it works, you can then continue with a campaign with peace of mind and clear, measurable objectives.”
What mistakes do fintechs and insurtechs make?
According to our experts, there are some common mistakes that both fintechs and insurtechs make when they take their first tentative steps into PR. Kimberley Waldron believes that, in part, this is because many startups have scaled so quickly that they experience challenges in getting their message out.
“We’ve worked with numerous emerging businesses who fit that profile,” she tells FinTech Magazine. “It’s always an exciting prospect but it’s also a period that must be managed very carefully, particularly in relation to PR and how a company positions itself.
“Ultimately, as a company evolves, its PR image must evolve too. There’s no value in a company that closes multi-million dollar funding rounds retaining the same messaging, tone or audience that it had when it was little more than a slide deck. While everyone enjoys those early days when companies first fight to find their voice, the true story of a business is always written later when they’re leading within their field.”
Simon Hayes argues that young startups must earn the right to be noticed: “One of the most common mistakes made by insurtechs is that they only reach out to the press when they want something, not realising that their ‘amazing hot news story’ will just get lost amongst hundreds of other emails in the journalist’s inbox.
“These firms will bombard the press with supposed news, hoping that something gets picked up, whereas in reality it is more likely to be ignored, or worse, blacklisted. Journalists have pages to fill and limited time, so they must see you as a helpful source of information, rather than an irritation.
“If these firms do get to meet a journalist, another mistake they make is to ramble on about their own achievements, rather than the value they provide and the difference this makes to the industry.”
Bootstrapping: tips for doing PR on a budget
Kimberley Waldron, SkyParlour:
Simon Hayes, NextGen Communications:
Alex Clere, FinTech Magazine:
When is the right time for me to use a PR agency?
When you understand the downstream benefits that await you, it becomes obvious why good PR is so important. NextGen Communications’ Simon Hayes says: “People like to buy from brands they have heard of and are familiar with. PR is one of the most effective and cost-effective tools in the marketing mix to deliver that, especially for firms looking to raise their profile in new markets.”
Kimberley Waldron from SkyParlour believes that every business has a great story to tell, but some communicate it better than others. For new clients that were previously sceptical about the power of PR, they tend to generate more value from engaging a PR agency than they first envisioned.
“Sometimes people have preconceived notions about the benefits PR can bring, or see the field through a myopic lens. It’s not just about generating media attention and coverage for our clients; we also help to support with things like award entries or ensuring our clients are getting regular speaking slots at major industry events and exhibitions.”
Can I afford to start paying a PR agency?
For many founders, the question of cost is the most important one. Instead, you should be focused on the value that a new PR partner can provide and whether it’s proportionate with the funding that you have available as a new business. Generally, startups tend to engage PR agencies for the first time once they raise their first $500,000.
Kimberley Waldron says: “For the most part, startups tend to be quite cost-orientated, especially when compared to more established businesses. Because of this, they often want to see the potential for real value to be generated from any activity, including PR, which is certainly no bad thing.
“In fintech and technology, there are all different kinds of founders and leaders – some serial entrepreneurs, some intrapreneurs turned founders, geniuses straight out of university and some accidental entrepreneurs that stumble upon a solution. All these different experiences and personality types lead to a different approach to PR, and a different expectation as to what a successful comms programme should cost.”
For some bootstrapped firms, PR may genuinely be one expense too far. Simon Hayes recounts the time he first entered the world of insurtech at Startupbootcamp as a mentor nearly six years ago: “Several of the insurtechs after the three-month programme wanted to work with me,” Hayes recalls. “None of them had a budget, but I had to explain that I work better when I am paid! We stayed friends, and I am thrilled to say that one of those firms, Nuvalaw, is now a paying client, which is getting some great traction in the market with businesses like Admiral.”
For those in the very early throes of business, there are still steps you can take to secure valuable exposure without an enormous PR budget. There is a lot of goodwill out there, so attend industry events – like FinTech LIVE London – and build up that network of useful contacts, who will be able to share your growth story with prospective new clients and investors. Even those who don’t prove useful in the short term may be valuable in the long run.
Also, Simon Hayes says, be active on social media and share your news with followers and connections. “Don’t just post,” he says. “Read what others are saying, especially influencers, and join the conversation.”