Case Study: Positioning your way to PMF
Sharing results & opportunities found through quantitative ICP research
Hey, I’m back and I missed you. 👋
This summer, I unplugged for 3 months to focus on family back home in California. I bought a house in London. I left Deliveroo after 3 transformative years. Now, I’m two months in (and still pinching myself) at a company called Lune - where we help businesses leverage climate strategy (specifically, high quality carbon offsets) to cultivate brand differentiation, harness customer loyalty, and accelerate sales cycles.
Leaving Deliveroo was one of the hardest decisions I’ve made in my career; but thankfully, joining Lune was one of the easiest.
Lune’s API technology is beautiful because it is (real, impactful) climate action — at scale. Any business can begin to offset its products and services without an ounce of added friction or thinking imposed upon the customer experience.
I’ve been working with our founders to practice what I preach: get uncomfortably narrow to solve the needs of one customer better than anyone else.
Below are the results of a 2-month long research study that I’ve led at Lune on the topic of consumer demand for a green payment method. I think the results are fascinating and quite frankly, not what I expected. I hope you enjoy.
Think beyond the merchant: a statistical case for green payments
I’ve spent two months interviewing people building fast-growing payments companies - specifically ones that impact consumer experiences. I’ve become obsessed with understanding their pain points, commercial metrics, their brand beliefs, and their employee propositions.
To put it bluntly, I want to know: how do you make payments... sexy?
How do you get people to love and prefer a particular transactional experience?
Here’s everything we’ve learned, including some astoundingly cool insights from a survey we conducted with 500 general consumers across the UK and Europe.
Payments companies struggle to differentiate, yet aspire for loyalty
Payments companies are -- to paraphrase their own words -- totally undifferentiated. And yet, every single product manager or senior exec I spoke with hammered home one universal message: convert new customers, build loyalty, accelerate market share.
Strategically, this makes sense. Laser focus on a few commercial goals and results will follow. It’s no wonder, then, that the individuals we interviewed feel a collective lack of bandwidth (or reason) to think beyond the payments needs of the merchant.
...but what do merchants care about?
Do merchants care about fast and easy payment experiences? Sky-high acceptance rates and effortless reconciliation? Yes, surely these things are integral to the foundations of a successful modern business. But few business owners feel passionate about starting their own business because their payments will be easy.
Merchants care about their customers.
Payments companies that fall short on serving the needs of the end user compromise their opportunity for market dominance, and even worse, position themselves on their back foot as a market lagger.
Customers want green products & services (but they don’t yet exist at scale)
Neglecting the end-to-end customer experience means payments companies focus on an incomplete picture, and ultimately leave money on the table.
Now more than ever, businesses know that their customers care about impact through sustainability.
By offering responsible, or “green” payments as a value-added service to merchants, payments companies will accelerate existing KPIs such as revenue growth for themselves -- and for their merchants.
Products marketed as sustainable grow faster, and are preferred by the majority of young consumers. Similarly, a majority of e-commerce brands are seeing increased demand for green products and services.
Sounds compelling, right?
That’s what all the payments folks were saying.
“Sounds cool, but so what?”
We accepted a direct challenge from a Chief Revenue Officer of a fast growing payments company:
We surveyed 500 consumers (statistically significant sample size) - without assumptions of background climate knowledge - from the UK, Finland, Sweden, France, and Germany to better understand their attitudes and towards a green payments proposition.
Here are the results. I’d love to hear your thoughts on them in the comments section below!
Green payments will increase share of wallet and create happier merchants
1. We asked: When making a purchase, how likely are you to choose a “green payment method” that tackles climate change at no additional cost to you?
Result: Three out of four consumers wants a “green payment method” that tackles climate change but it does not exist today.
2. We asked: If a brand automatically offsets the carbon footprint of a purchase, at no additional cost to you, how much more likely are you to buy from them again?
Result: Merchant carbon offsetting drives loyalty! 77% of consumers would stay loyal to brands that carbon offset purchases automatically.
3. We asked: How interested would you be if a retailer gave an option to support carbon offset projects with your purchase?
Result: A majority of consumers (67%) want retailers to offer the option to carbon offset their purchases.
4. We asked: If presented with the option to make an online purchase carbon neutral, for 1% of the purchase value, how likely would you be to choose this option?
Result: Consumers are willing to contribute, too. 59% of consumers would pay an additional 1% of the purchase value themselves to offset products and services.
The markets are ready for climate impact with measured ROI
At Lune, we believe that every product and service must benefit the planet through climate positive action. Our API product helps companies build impactful carbon offsets into any service. And for our team, our product, and our proposition, customers are at the heart of everything we do.
With a view towards differentiated experiences for customers, the next phase of payments hyper growth will be catalysed by giving consumers what they are screaming for: frictionless ways to have a positive climate impact with every payment. We believe in the increasingly obvious connection between business leveraging climate strategy for accelerated commercial growth (not working against it).
Businesses, especially fintech companies, play a critical role in the fight against climate change. But in order for businesses to prioritise this, climate impact must be measured in traditional business terms - through commercial ROI.
According to our consumer survey, the story is beginning to write itself.
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Thanks for reading! Interested in Lune? Reply to me directly or explore the product.
Like this research? You’d help me so much by sharing it with any payments companies you know!