Amanda Pitcher

If you’re a Fintech start-up leader or marketing manager, or are launching a disruptive new product or service, you should be familiar with the innovation adoption curve we discussed in our June blog: Fintech Growth and the Diffusion of Innovation. We highly recommend reading that post first, but to briefly summarise: the Diffusion of Innovation curve is a 57 year-old theory that categorises consumers into five segments, based on how likely and early they are to adopt innovation…

This post focuses on the “Innovator” and “Early Adopter” segments from the Diffusion of Innovation model. It’s these segments that must be won over if your Fintech solution, or product is going to get traction. These are the consumers who actively seek out new products or services, and are willing to invest both money and time on innovation – money to purchase, and time to understand it and put it to use. They’re responsive, quick to give feedback and recommendations for improvement and vital for refining your product or service before approaching the Chasm and Early Majority – which we’ll cover in the next blog in this series.

Know your target segments

If you’re aiming to target Innovators and Early Adopters, you need to understand them first.

The needs, behaviours and goals of audiences across the products and services offered by the multiple sectors in financial services can differ wildly. Research-based personas allow you to truly understand your target and existing customers – their needs, goals, pain points, what products they need and why, and how they need and want these products and services delivered (Yell has created this financial services persona template, which is a great starting point).

There are, of course, key characteristics we can use to identify Innovators and Early Adopters. Using our own extensive research, as well as collating insights from EY Global Financial Services Institute research, and other leading industry bodies, we’ve highlighted these shared goals and needs.

Identifying Innovators

Think of the people you know who had an iPhone 10 years ago, who were the first in your circle of friends to stay in someone’s spare room, via Airbnb, or booked a ride with Uber while others warned against it and used taxis. Representing 2.5% of the population, these are the Innovators. A small segment, but a vital one – they’re engaged, interested, and active.

Innovators are not only eager to try something new, they’re actively seeking out the next “best” thing. They have a problem they are trying to solve – an easier/better/faster way of banking, super that provides them with greater flexibility and visibility, or a way of investing their spare change. They’re constantly seeking – reading, researching, signing-up to be the first to try before there’s even a product on the market. Innovators are the first to know.

A 2015 EY survey of 10,131 digitally active consumers across Australia, Canada, Hong Kong, Singapore, the U.K. and U.S. identified two key ways to identify Innovators – they’re younger and richer. As published in the Winter 2015 edition of The Journal of Financial Perspectives: FinTech, “…one in every four respondents aged 25 to 34 has used at least two FinTech products in the last six months”. And 21.3% of 34 to 44 year olds responded that they had used at least two Fintech products in the six months before the survey.

This segment is more likely to live in urban areas, and have a greater disposable income, with over 44% of study participants who indicated they used two or more Fintech products earning over US$150,000 p.a., and another 24% earning between US$70,000 and $150,000 p.a.

Risky and mercurial

One of an Innovator’s key needs is to be first – the first to about, and the first to try a new product or service. This means not only have they signed up to your mailing list or started following your social channels before you’ve even got a product close to market, they’re willing to put their money on the line for the chance to be first.

Their desire for novelty and something new exceeds any caution, they’re willing to try new experiences, and new products with little to no market history.

First to know – and tell

Innovators are seen as influencers in their social circles, they take pride in showing off new purchases or talking about new services they’ve tried. They will tell their friends and family about their experience using a new product or service – good or bad – and they will also be happy to provide your business with vital feedback.

Feedback, and what you do with it, is a critical success factor at this point, Innovators are much more forgiving of bugs and issues than later segments provided you are actively capturing their feedback, and implementing the changes to improve the experience.

Innovators are quick to adopt, and will also be quick to drop a product if it doesn’t meet their expectations, or when something new comes out on the market. Fintechs need their energy, enthusiasm, and advocacy but few Innovators stay around for long. They are necessary, however, to reach the next segment.

Early Adopters

Innovators are your “foot in the door” to Early Adopters. Representing 13.5% of the population, Early Adopters are the game changers for Fintechs and new products. More cautious than Innovators, Early Adopters are information gathers and – unlike Innovators – they need to reach a certain level of information, from multiple sources, before making a decision.

Unlike later segments, however, Early Adopters are actively seeking out this information – reading online reviews, asking for recommendations via social channels, and talking to friends and family. Their research period is short but intensive, and once they’ve reached a level of comfort they will make a decision and purchase quickly.

Like Innovators, they are most likely aged between 25 and 44, earn over US$150,000 p.a., and are already using at least two Fintech products.

More loyal, more feedback

Early Adopters, like Innovators, will provide you with feedback. Having spent more time researching, however, they have the ability to see the potential of your product or service and the opportunity for them to stay ahead of the curve. This research and buy-in means this group are more engaged with your product and service than Innovators, and will spend more time telling you what they do and don’t like, and provide multiple rounds of feedback as you iterate and refine the offering.

How you collect this feedback and – more importantly – successfully implement the changes to address flaws and issues, is vital for achieving the correct product-market fit, and later your approach to breaching The Chasm – the Early Majority and the mass market.

Early Adopters become Early Evangelists

Happy Innovators will become your advocates, but happy Early Adopters will become evangelists for your product. Their well-researched approach – taking time to compare and contrast products and services – makes them the most-influential segment – known as thought-leaders among their social circles owing to their informed, less-risky approach.

Early Adopters who believe in your offer and can see its benefits, who can see the changes you are making in-line with their feedback and recommendations, will convert to Early Evangelists. Once they are here, they will tell every single friend and family member about your product or service – in person, on social channels, via review forums, and every other way possible. This is what you need to successfully cross The Chasm, which is covered in part 3 of this series.

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