Phase 5 client, humm Canada offers patient and customer financing solutions for in-store and online purchases focused on 5 key verticals: Home Improvement, Home Retail, Automotive, Veterinarian Services, and Dental & Health Services. The company enables customers to make purchases of up to $30,000, and pay for them over time via monthly installments. Founded and headquartered in Australia, humm group saw a potential opportunity to enter the Canadian marketplace, and knew they needed to learn more.
Having successfully expanded into other international markets, the company’s leaders understood that each country not only has different regulations to consider, but also different attitudes and perceptions when it comes to consumer financing. Based on a recommendation from one of humm group’s VPs who had worked with us previously, Phase 5 was selected to be the company’s Insights Partner for Canada.
As they explored market expansion, humm’s initial objectives were simply to understand more about Canadian merchants’ motivations and perspectives with respect to consumer financing. Through the work they completed with Phase 5 however, humm identified additional strategic insights - not only from merchants but from the consumers themselves - that they believe were critical to their successful launch, and to solidifying their market position with sustainable competitive advantage as compared to other financial services companies. Read on for more details about the project and its results.
Humm Canada’s business model is dependent on acquiring merchant partners to offer their consumer financing option, therefore it was essential for them to communicate a compelling value proposition to their target merchants. Recognizing that this was a critical success factor, humm’s original ask was to understand “merchant motivations and behaviour with respect to consumer financing”, a logical starting point.
Then, as Katherine Wellman, VP of Marketing for humm Canada describes it, “as soon as we started the project, we realized quickly that we needed more info. It wasn’t just about merchants, it was also about the end-consumers”. As the team proceeded through the early steps of research design with Phase 5, answering those important but sometimes difficult questions about key objectives and strategic considerations, they shifted from a 75/25 merchant-to-consumer focus to something closer to 50/50.
“As soon as I met with Phase 5, I felt great about how well they understood our business and our challenges.” - Katherine Wellman, VP of Marketing – humm Canada
A compelling value proposition to merchants would need to include marketing support, specifically consumer facing collateral that could easily be leveraged to communicate the consumer financing option to customers. In order to create this collateral and simplify the process for merchants, humm Canada recognized that they would need to clearly and concisely communicate the payment option mechanics and benefits to end-users.
The project kicked off with a discussion of objectives, action-oriented intentions, and expectations about how insights would be applied to business decisions and overarching strategy. “Phase 5 was excellent at guiding us and establishing our guardrails,” says Wellman. More than once, the team was tempted to go off on a tangent, but Phase 5 leaders were able to keep everyone on track by continuously bringing discussions back to project objectives.
Quantitative research techniques were deemed essential, since one of the key objectives was to generate compelling statistics for merchants in each of the key industry verticals. These datapoints would help articulate value and demonstrate likely consumer uptake. As well, the team determined that a wide variety of age groups and professional types & levels would be required to demonstrate sufficient consumer volume and interest. The client needed to finish this project with its “merchant opportunity story” intact.
Once objectives were set, survey questions were designed to explore “jobs to be done”. The financing product as it existed in other countries (or even as it was originally planned for Canada) was not described to survey respondents. Instead, in both the merchant survey and in the consumer survey, our client asked questions “at a very high level” relating to various product elements (e.g. interest rates, deferral periods, etc.) so they could create a new product construct designed specifically for the Canadian market.
As well, humm Canada probed for sentiment towards financing options, and for factors motivating adoption and usage. Findings here were instrumental in how the final product was named and described for launch and laid the groundwork for the deeper brand positioning work that would follow.
Results were plotted in matrices to facilitate the discovery of insights and opportunities by sector and customer segment. As well, organizing findings in this manner enabled the client to quickly customize its story and materials by industry vertical.
Insights revealed and helped quantify a huge opportunity for humm group in Canada, identifying high consumer demand, especially in certain industries. Research showed that customers were not only interested, but in some cases would even select a business that offered this financing option over a business that did not.
However the data also showed that there was a negative perception associated with some types of financing, and so humm Canada knew that clear communication and education would be critical in order for consumers and merchants to feel comfortable.
“We learned that, at the time, there was a lot of stigma and concern about financing companies being predatory. But we genuinely want to help people, we are transparent and we keep things simple. We needed our communications to reflect this.”
– Wellman, humm Canada
Since the study facilitated an understanding of end-users, humm was well equipped to help its merchant partners help their customers. Practically speaking, research findings helped humm group design marketing materials for use by merchants in-store, and helped them train the customer service providers who would handle customer questions or concerns.
With solid data points and marketing collateral that communicated a compelling value proposition, humm Canada was able to position itself as an expert, enabling the company to build trust and deepen relationships with merchants in target industries. This expert positioning and the partner relationships have made humm Canada a tough competitor, even when compared to the big Canadian banks.
“The expertise and the care we take in each industry gives us an edge. We are PARTNERS. If our merchants don’t win, we aren’t winning. So we are going to equip them with every tool we can to make them successful. This data is one of the tools that helps our merchants be better merchants. And we want them to be the best businesses they can be, including offering a variety of payment options, including ours.”
– Wellman, humm Canada
Internally at humm group, the value and utility of data has become engrained in the culture, where everyone from the Business Development team to Marketing to Training “travels with a pack” of insights to tell their story. According to Wellman, the data continues to help the Canadian team’s leaders sell their strategies into the Board of Directors and investors, because they can clearly demonstrate that they know their market and their customers. And when a new CEO recently took the reins, data made the leadership transition relatively seamless because the story was easy for the team to convey.
For more information on how Phase 5 can help your organization with its business expansion, or more simply on its journey to customer-centricity, contact us.