By Zohar Steinberg
There is nothing more appealing for me as an entrepreneur than finding a way to curb a bad habit, or what I see as the "ultimate problem." A solution for such a problem (with the right business model, of course) seems like the next unicorn. But is it?
We are all experts at turning a blind eye to the less-than-optimal choices we make every day: from firing off a quick text while driving, to opting for fast food too often. We let ourselves off the hook by justifying these decisions as shortcuts to make our lives just a bit easier or as habits: actions we convince ourselves are just beyond our control. These habits thrive with a "How bad can it really be?" or "I'll do it just this once" (thirty times later) mindset. Under these circumstances, bad habits die hard.
Over the past few years, I've been fortunate to learn and experience the areas of online consumers' behavior and buyer journey. I was amazed by the habits we quickly adopted and the damages they cause.
From our very first online purchase to the ease with which we save our card on profile for faster checkout next time, we have remained aware of the risks associated with transacting online. In fact, even after hundreds of billions of dollars in e-commerce transactions, most of us still pause for a second or two before entering our payment information. We ponder whether the site is safe. What might happen if the information is stolen? We avoid imagining the worst-case scenario for our information and finances.
But that pause quickly turns to anticipation for the delivery of our latest purchase with the sound of a one-click checkout. That is until we learn of the latest data breach, in the news or from our bank.
Around 100 million cards with payment information were stolen from merchants in 2014 (40 million from Target and 60 million cards from Home Depot). 2015 wasn't much better with 2,260 data breaches. In total, fraud loss amounted to $11 billion in 2013. Who pays for these losses? Eventually, you and me. In order to start addressing this issue, I started a business with a mission to help people protect their payment identity and make payment fraud a thing of the past. Along the way, I discovered the following information about user behavior:
Understanding Opinions Versus Behavior
My team and I quickly learned that while most people say they care about their privacy online and that they want to avoid experiencing payment fraud, they actively do very little to protect themselves.
When we invited people who said they would "most definitely" use our product to register, less than half of them actually took a step forward and registered.
We all have opinions. But when it come to acting on them, we need a good enough reason. We all know it's wrong to text while driving (it's even illegal in most places), but many of us still do. Understanding the distinction between people's opinions and their behavior, and finding what drives them to act makes the difference between a good idea and a successful company.
Get Your Foot in the Door
Even if your idea is for "everyone," start by identifying a small, well-defined, highly incentivized audience you can (relatively) easily reach. Your product or service should help change one of their behaviors. It should help them do something they couldn't or wouldn't do before. This audience will become your first user base.
- Define an audience. You don't have to define this perfectly right away, as this is the beginning of your journey.
- Interview 20 people from this audience. Engage in a conversation, listen to what they say and to their reasoning behind it.
- Identify pain points you can help ease. Or even better, focus on (and solve) the best one. Your audience will form around that.
- Craft call-to-action messages. They should address these pain points and drive behavior you can measure (click through to a landing page, register, give an email address, a phone number, download an app, etc.).
- Test the responses, conversation rates, click-throughs and the users' segmentations in Facebook campaigns, Google AdWords, etc.
- Change or fine-tune your message, measure the effectiveness and do it again.
The audience we defined was U.S. cardholders who had their cards compromised and experienced payment fraud. During the interviews, we identified a subset of a smaller, but highly incentivized audience of people who actively looked for identity protection and were willing to pay for it. This audience demonstrated their need through behavior: They either stopped, or dramatically reduced their online payment activity. They were actively looking to take action to protect themselves with identity protection/monitoring services.
Later on, you can expand to greater audiences across larger channels. After all, every big change or revolution has to start with a foot in the door and a small group of people that believes in the cause.
Zohar Steinberg is a serial entrepreneur, founder & CEO of token, a payments security company on a mission to disrupt payment fraud for the greater good.