the 3 pronged attack startups need for a victor’s growth rate
You run as fast as the dog that is chasing you.
Contxto – That’s how Hernando Rubio—CEO and Co-Founder of Colombian fintech app Movii—describes keeping ahead of competitors within the startup ecosystem but not quite getting away.
You, dear founder, will understand the feeling. You’ve got momentum on your side and you’re growing… just not fast enough.
Even before the rabid dog that is coronavirus entered the race, Movii’s ambitious user growth wasn’t where it wanted it to be. Despite their monthly double-digit growth, reaching a million users required them to step up their game greatly, and they weren’t there quite yet.
Rubio was aiming for a million users by the end of 2019, so they needed to upgrade their tactics in order to achieve their high growth milestones.
Turns out, having a good product and good intentions can only get you so far. As a startup founder, you know this too. You may well be learning it the hard way as you read this.
The three-step solution to surviving the startup ecosystem
Movii knew that the product it was selling was watertight, but they were still floundering when it came to actually getting customers to sign up and use it. What it needed was to see how the product they were offering was being experienced by current and potential customers.
They sought out a software solution that would allow them to understand what their users were doing inside their app. In the end, they chose CleverTap, a company specialized in marketing analytics and customer retention.
What they needed was to absolutely maximize the number of customers—and therefore, revenue—that they could possibly get—and that they were losing out on otherwise.
Often, you’ll find that a solution polishes up the surface of a problem without addressing the underlying issues. What I found to be interesting about CleverTap was that its approach is different. Sure, it looks back at the problems a company is dragging from the past, but it also deploys present-facing, real-time solutions, as well as forward-looking ones.
A three-pronged attack, if you will.
Step One: Find your friction
What’s holding your growth back? With their new solution in hand, Movii found that a lot of their problems stemmed from the friction caused by blind spots they didn’t even know they had.
How you engage is crucial. For instance, being picky about where a customer can find you is a dire pitfall. However, it is also a pitfall that digital platforms, even great ones like Movii, often fall into.
As a startup, when you limit yourself in this way, what you are doing is forcing users to use your preferred path to adoption rather than theirs. You can probably see how this is really just a path to failure.
Therefore, by implementing a specialized mobile marketing platform, Movii opened routes for customers to easily find their products across 12 channels. Never did so many customers have so much access to one single fintech solution.
Step Two: Smash the lethargy
Next, Movii found an ever greater source of friction: the status quo.
The startup realized that, one thing was getting people to download their app, another was maximizing the number of transactions occurring on it. Folks were simply not taking that second step.
The blame wasn’t to be put squarely on Movii’s shoulders. As a founder, you know that being disruptive means preaching alone sometimes.
Similarly, back when Movii was founded in 2019, over 85 percent of Colombia’s transactions were still being carried out via cash. Digital transactions just weren’t the done thing, either because users didn’t understand or trust the idea of them.
Movii had to literally work to change culturally ingrained behaviors in Colombia. Talk about a tall order… if they had tackled the entirety of Colombia’s 52 million people as a single, homogeneous block.
Luckily, amongst its arsenal of tools was CleverTap’s user segmentation solution. It allowed Movii to concentrate on the customers with the right traits. The kind of user virtually on the verge of using the digital payment features on offer.
This solution allowed Movii to craft specially designed campaigns to target inactive customers. After the tool was implemented, 63 percent of the contacted users finished the onboarding process and became full-fledged members of their community.
You too need to identify stumbling points to create a specially tailored omnichannel journey. Not just to get your solution to your users, but to use the data to educate and engage them on a case by case basis.
It’s amazing how much you can do when you can get a really good look at your market and customer base. And yet, getting a snapshot of what was happening in the marketplace in a single instance was not going to cut it to reach the rates of growth this Colombian startup needed.
So, Movii took a step further with its market mapping tool and glimpsed into the future.
Step Three: Beat the curve
OK, so now we know what to do to capture customers’ interest. Turns out, that’s the easy part.
What a startup actually needs to do to max-out its growth is to foresee what the marketplace’s behavior is going to be in the future.
Market segmentation tech is what is needed to meticulously come to terms with what customers’ core needs actually are. The segmentation tech that Movii used analyzed real-time behaviors, providing insights into customers’ future actions. This was what it saw:
- Some were classified as Loyal Customers or even Champions—the folks that already believed and were heavily invested in the product.
- Others were flailing in their interest or commitment—segments called Cannot Lose Them, Need Attention, About to Sleep—, automatically throwing up red flags.
- Then there were those new customers whose behavior indicated how enamored or not they were at first sight—Promising or Potential Loyalist segments.
Such meticulousness would not be possible without a defining pillar within the onboarding edifice: Artificial Intelligence (AI) and machine learning.
AI specifically gave Movii a massive boost. Since now they could assess if a customer could be given a “nano-credit” because the fintech could see if they were in a position to afford it, given their previous behavior.
Data analysis can be a bit of a pain. Your startup may be a bit too young to have a specialized data science team and, as you grow, your database is just too big to analyze manually.
Movii found that integrating an AI-powered tool solved this paradox. With it, Movii—and for that matter, you and anyone else—can carefully analyze information to get genuinely actionable reports. Sometimes what your data is telling you is not what you think…
Bonus step: Survival of the finest
Movii was now able to make completely clear-eyed, data-driven decisions to both understand the present and future standing of their customers.
The Colombian startup went on to make brilliant gains after adopting the necessary technology.
It experienced a fourfold increase in its click-through rate (CTR). It reduced customer loss by over a third—that is, reduced their user churn by 36 percent—. And, at last, they were back on track for their original ambitious targets.
But, perhaps most importantly, Movii future-proofed itself for the new digital economy.
You should too.
At Contxto, we’ve talked a lot about the paradox of digital economies of scale: To be competitive you must be massive, but you must be personalized.
Movii’s realization was that, by analyzing and segmenting your customers manually, you were already setting yourself up for failure. By strategically automating this high-volume, high-specificity task through AI, they were returning human labor back to where it needed to be—being creative, talking to partners and customers, planning for the future.
The startup ecosystem is enough of a dog eat dog world to have to worry about a race to the bottom. Innovators like Movii show the way forward. A new economy in which companies get ahead by creativity and streamlining, not by milking their customers.
“Our mission over the next 10 years is to allow all Colombians to form part of the digital revolution,” promised Movii CEO, Hernando Rubio, in a recent statement.
The rat-race for profits of the past is one thing, but I like this new style better. With the right user retention and mobile marketing tools, you needn’t worry about outrunning the dogs when you are galloping like a unicorn.
-AG
