Best Practices for Selling into Enterprise Financial Institutions
Big banks are large, complex, and difficult to navigate. In fact, financial institutions of any size are. Even as an employee armed with a Workday roadmap, understanding team dynamics and reporting lineages can be a challenge internally, let alone from outside the gates.
This challenge doesn’t end once a sales call with a financial institution (“FI”) is landed either. Converting a call to a multi-year contract and implementing a product brings an onslaught of complexities in navigating the product’s place within the organization during the sale, closing, and implementation process.
But for the brave founders willing to stick it out, on the other side of the sale come deeply entrenched, multiyear, and in many cases, six figure contracts. To get you to that side, are several best practices informed from over a decade of personal experience working with product partners at SVB, JPMorgan, and Wells Fargo and dozens of financial partners in between.
To start, first and foremost comes landing your champion.
Crowning Your Internal Champion (s)
Many startups might consider a six-figure contract a drop in the bucket for a bulge bracket bank. But when competing among dozens of internal priorities and cost cutting initiatives, a six-figure contract is a much bigger deal to an FI than a startup might imagine. In one division alone, imagine the chaos of a hundred priorities, budgets, reporting structures, and product roadmaps, supported by professionals with their own incentives — including keeping their jobs.
With this in mind, the best partnership conversations always lay the groundwork up front by identifying and instilling passion in early champions. On an initial sales call, founders often gloss over their mission for the sake of talking about very specific partnership details, losing the excitement and vision in the process. By sharing passion for their mission, a founder can solicit buy in from their prospective champion and enable internal advocacy as the product makes its way up the corporate ladder and into the real budget decisioning room. This is especially important when considering a champion is generally not making the final decision and will need to seek approval from a slew of constituents before any pilot, beta, or contract is approved.
Champions of course being plural not singular. Landing a champion shouldn’t stop at one individual or even one division. Cultivating opportunities to connect with contacts across an organization is one of the more successful tactics I’ve seen employed, especially for the earliest stage startups that need as much support and table pounding across the organization as possible. This often includes champions across corporate development, partnerships, product, or even venture investing — what’s important is having buy in across the organization. The more touchpoints, the less point of failure risk, the more firepower internally. More on that later, though.
Following a successful first meeting, come several follow up meetings that dive into more practical, detailed areas of a startup’s fit in a financial institution’s product suite. These meetings address questions like: ‘What exactly are the bank’s needs and how integral are the missing parts of your platform to the overall solution?’ or ‘Is the bank looking for an out-of-the-box solution?’ or ‘How comfortable is the bank partnering with a company from an early stage?’. Many startups also skip over this piece in the early conversations. These discussions can serve as proactive qualifiers as to which bank prospects are ready to grow with a startup and which banks need more time. If a bank isn’t ready now, then a startup should always keep the door open with the bank’s partnership team and other POCs as the product develops.
Brand Awareness on a Budget
Many smaller startups feel as though their size and relative obscurity work against them when competing against well-funded, later stage platforms with millions to spend on marketing. And while a multi-million marketing budget certainly never hurt, anecdotally, the most impactful marketing comes for free and in the form of happy customers. Nothing sells better than the success and passion of a startup’s delighted customers who bring not just enthusiasm but living examples of ROI to the conversation. For startups with little to no money to spend on marketing, offering up existing customer references early on can be game changing in instilling both an understanding and passion for a product.
Another high impact, efficient channel are blog posts educating customers on the problem, a product’s ROI, and/or the market gap a startup is working to fill. One of the most successful marketing campaigns I’ve encountered was a simple LinkedIn piece that went viral leading to dozens of customer inbounds. The post was simple, clean, and easy to understand — it broke down the problem into a digestible piece of literature that resonated with buyer no matter how advanced in understanding they were of the problem or product at hand.
Beyond generating inbound leads, educational posts can help push existing prospects over the finish line. If a bank or FI hasn’t heard of a startup’s product or mission, the first thing they are going to do is look the product up. Putting out a range of content introducing the product can be extremely helpful in building brand awareness early on.
Diligence & Discovery
Among many considerations for early-stage startups is understanding an FI’s need to remain on the cutting edge of tech be that with payments, fraud, or web3, while also managing risk and scale considerations of their own. For example, a payments product might have proven early efficacy and market pull but can it handle the needs of a global bank? What is the risk of failure at a global scale and what are the financial, compliance, and brand damage considerations a bank must risk weigh this against? Though a startup might not be ready to scale with a global bank now, periodic updates to banks as the startups builds a scale ready product, first with larger fintechs, then credit unions and regional banks, are key to staying top of mind.
Underscoring all of this is that selling into financial institutions is not linear and will be fraught with stop and go processes and trials. Understanding the risk reward is especially important in this context as on the other side, not all contracts are created equal. Many a founder have found that the onboarding and risk requirements, coupled with the customization needs of certain institutions, don’t make sense from an economics perspective. And that’s OK but far more important to diligence on the front end of any customer or partnership conversations.
Speed Dating with a Banker
There is a significant disparity in how FI’s adopt, strategize, and view tech partnerships. It’s therefore important to be mindful in making sure an FI is culturally in tune with a startup’s own value set. Specifically, is this FI acting as a thought partner? Are they sharing watch-outs with a startup’s best interest in mind? Making sure a prospective partnership organization understands how a founder thinks about product development is integral and vice versa — it is a partnership after all.
One starting point is evaluating an FI’s historical propensity to partner, buy, or lead the market with tech adoption. Finding and investing energy in an identified early adopter FI can save an enormous amount of time, money, and heartache down the road. Similar to finding a lead for a financing round, once a recognizable FI logo has adopted a product, landing other FI logos becomes easier, with risk averse FIs more likely to follow on and in a much more efficient manner. In some cases, startups have successfully secured an equity investment from a large FI at the Series A or Series B, a move that brings with it substantial messaging, awareness, and validation of the product being sold. Finding the right partner is a two-way street and should be steeped in similar values and clarity around where each party stands with partnerships, innovations, and culture.
While selling into financial services can feel never-ending, the ultimate payoff of landing an FI as a client can mean a six, seven, or even eight figure multi-year contract. And while the challenges of getting in front of FI will weed out many a startup from the race to the top, for those employing a targeted sales strategy, the payoff is well worth it.
Disclaimer: views are my own and may not reflect those of SVB Capital.