INTERVIEW How OakNorth built a B2B brand for the “Missing Middle” of SMEs

OakNorth has become a mainstay on lists of top fintech start-ups since its launch in 2015, using its advanced technology to loan to previously overlooked businesses via its UK bank, OakNorth Bank, and licensing that technology as a SaaS solution to other banks – primarily in the US.

This requires a highly specialised marketing approach, according to Director of Growth and Communications, Valentina Kristensen.

The company was founded by two entrepreneurs, Rishi Khosla and Joel Perlman, who developed the business after their own experiences struggling to get a loan for their previous start-up Copal which they’d founded in 2002. OakNorth focuses on the “Missing Middle”, businesses that are the most significant contributors to economic and employment growth but that still struggle to access fast, flexible debt finance.

“It takes as much effort to underwrite a loan of £100m, £10m or £1m, meaning banks are incentivised to prioritise the bigger ticket items,” says Valentina.

The solution is OakNorth’s bespoke technology, the ON Credit Intelligence Suite, which uses machine learning to analyse a range of data sources, including non-traditional ones such as online reviews and foot traffic, to help build a granular understanding and forward-look view of each borrower’s business.

The UK bank serves as a “proof of concept” for the technology, having leant over £5 billion to several hundred businesses across the UK since launch. Based on the evidence of the UK bank, OakNorth’s software arm sells the technology to banks in other countries – primarily in the US.

Because the target customer is a very specific one, the approach to marketing is highly bespoke.

“You’d never find an ad for OakNorth Bank on the side of a bus or us sponsoring a big football team as we’re focused on a very specific niche of the market, so not everyone is our target customer,” says Valentina.

One approach is making sure OakNorth Bank’s team attend the right industry events, which could be extremely specialised.

“If it’s only 200 attendees but they’re the right people to be in front of, sponsoring an event that specialised and that size would be more cost effective.”

She says the biggest focus for content is about “the deals we’ve done”.

“It’s less about corporate level announcements and what’s happening at OakNorth bank, it’s that we’ve lent to this business. That gets coverage in vertical trades so more businesses like that one will get in touch.”

Valentina adds that “two thirds of our qualified new business leads comes from referrals – entrepreneurs tend to know one another and our 80 net promoter score means they’re often willing to refer us.”

The strategy therefore is to get people talking more about where they’ve got loans from. Valentina highlights that start-ups will proudly publicise that they have got investment from a particular private equity firm.

“It’s a rigorous process to get debt and you don’t make a loan unless you’re expecting to get it back. Getting approved by OakNorth Bank is a real stamp of success for your business and really demonstrates your future prospects.”

While referrals themselves are by nature informal, the firm’s targeting process for who is encouraged to refer is heavily informed by data. Valentina advises any in-house team to use marketing software to support its efforts and systematize outreach and lead gen.

“This enables us to see what kind of engagement we are getting, whether from a newsletter, invites to events, webinars, etc.” she says. These metrics help to identify who would be willing to recommend the brand to others.

“With HubSpot which is the product we use, you can assign scores based on different things,” she says, which might include whether someone regularly dials into an event or opens your newsletters. With these “extremely engaged” people, OakNorth can then reach out and ask them to help when they are launching a product, says Valentina.

However, Valentina attributes most of the success of the referrals programme to the firm’s customer service, comparing the process to the attendee of a great restaurant telling friends to go to it. “It’s largely driven by the fact we stick to what we say we’re going to do.”

This includes demystifying the normally “opaque” processes of getting a loan. OakNorth Bank invites every borrower to a Credit Committee to discuss their needs directly with the decision-makers, working to understand their businesses and design a bespoke facility. The firm also prioritises speed, with decisions made in days rather than months, freeing entrepreneurs’ time to get back to running their businesses.

Crucially though she emphasises the connection OakNorth Bank has with its borrowers. “The fact that we’re founded by entrepreneurs means our team operates with an entrepreneurial mindset and speak the same language as borrowers.”