Discover Growth Hacks Used by Neobanks
Updated: Sep 12, 2019
As of March 2019, Revolut reached 4.5 million customers. The three-year-old firm's growth has been remarkable. In May 2019, UK challenger bank Monzo has passed the 2 million customer mark, with sign-ups continuing to accelerate further.
We decided to take a look at marketing activities of this fintech scale-ups to see what commonalities they share. Analysing their current endeavours, we looked back in their beginnings too and came up with 5 overarching growth hack themes. We hope both new fintechs and incumbents will find the information useful in their growth journey.
1/ Targeting Easy to Acquire Segment First
In the world of notoriously difficult customer acquisition, students are a segment that is relatively easy to onboard and has an affinity for emerging technology and new products. Both Revolut and Monzo actively worked with student communities in their beginnings. For example, Revolut organized a competition called Race among universities and this way was able to leverage the power of community and network effect to spread its offering. During the Race, Revolut offered a premium account for students for free and regularly published leaderboards with top 5 universities leading.
Monzo did something very similar - at the end of each month students from the university with most issued Monzo cards were rewarded with discounts at a local cafe or free drinks.
The advice here? Start early with engaging a segment that is relatively easy to attract. Gamify the onboarding to scale customer acquisition.
2/ Providing Financial Education
Most of the neobanks feature a blog and write 2-3 content pieces each week as part of their overall marketing strategy. This content is written in easy to understand manner and covers not only their product but more general topics like education around financial products such as mortgages, lending, savings or even retirement.
Typically not taught as part of a typical education process, financial education appears to be a massive problem which transcends geography and social class. ING surveyed 15 000 consumers in 15 European countries and discovered that 29% of Europeans do not have any savings whatsoever. Of those that do, 36% have the equivalent of only three months’ pay or less stockpiled, leaving them vulnerable in the event of unexpected financial emergency.
Sometimes you simply have to educate the market so it understands the value proposition of your offering. Moreover, 78% of CMOs see content marketing as the future of marketing and companies with content marketing efforts create 67% more leads than those without. Every modern institution nowadays create own original content - and that applies even more so in the world of financial services.
3/ Satisfied Customers = Referring Customers
Once you have a solid product and a critical mass of customers it is the right time to start thinking about referrals and value of word of mouth marketing. People are 4 times more likely to buy when referred by a friend. In case of Metro bank, 40% of its customers came from word of mouth.
Other neobanks claim to acquire 50-80% of customers from non-paid channels like from their blog, referral schemes, conferences - in other words, not from traditional paid-per-click advertising. This radically lowers the cost of customer acquisition. However, without satisfied customers, referral schemes do not make sense as they will only attract people to take advantage of the sign up bonus and churn quickly afterwards.
Both Monzo and Revolut have referral programs of various shapes and forms in place. Monzo grants Golden tickets giving 5 GBP bonus for both referred and the person referring. It also runs seasonal referral schemes - such as a Christmas campaign which allowed customers to give 10 GBP to their friends as a “present”. In contrast, Revolut refrains from offering direct financial incentives to acquire customers. It tends to offer their product at a discounted rate (give your friends Revolut card for free that would normally cost them around 5 GBP). Revolut also organizes different competitions - in one case notable case, to win tickets and accommodation to the FIFA World Cup.
The moral of the story here is you have to have satisfied customers that are already willing to talk about your product. Experiment with referral schemes and one-off rewards to see which work best. Measure how cohorts of customers acquired in this fashion perform and churn.
4/ Building Community and Being Transparent
This approach is especially interesting as it is something that is completely opposite of what incumbent banks tend to do. Monzo used to have a public roadmap and now regularly shares planned features. They also ask for community feedback on product development and approach.
A case in point of this approach which we thoroughly enjoyed was their approach to implementing ATM fees. The team at Monzo explained to users costs incurred during ATM withdrawals and provided 3 options to choose - satisfying users and simultaneously making sure the bank’s cost base is covered. The community voted which option it preferred the most. Monzo received almost six thousand votes and implemented the most popular option. This is what we call learning from feedback and working with the community at its best.
It is very common in the startup world to build awareness first and then launch some product features later. Monzo regularly asks for feedback and builds hype around product much sooner then it gets released. Monzo’s customers can often signup and then compete with others to get early access to a given feature. Revolut even offers an option to become a beta tester to its most avid customers and get products updates sooner than anyone else.
Online community forums are not the only way how to meet your users. Revolut organises external events to meet their fans regularly. For example in France, Revolut organized 12 such events called RevRallies within 3 months. In a similar fashion, Monzo regularly organises open office meetups for their customers that are recorded and streamed on Youtube.
5/ Going Offline
In many cases, neo-banks and fintech startups are still at early stages of development when measured through mass market customer adoption. It is interesting to observe Mozno and Revolut slowly breaking into the mass market. Both companies have recently started to use standard marketing channels such as billboards, posters or even TV commercials.
Monzo started to advertise in a tube in London in April 2019, but only after a few years of existence and reaching 1 million customers in the UK only. In May 2019 they launched a national TV campaign. We guess there is a limit of what you can achieve only with digital channels or word of mouth and eventually you have to start competing with incumbents and enter this game of traditional ways of doing marketing. Monzo definitely did a great job communicating their differentiators vis-a-vis traditional banks though. Check their video ads here.
The impact on sign-ups was immediate. According to Marketing Week 'June was by far Monzo’s biggest month for sign-ups, attracting more than 250,000 new customers, up from 150,000 a couple of months before. And prompted brand awareness increased 13 points from 35% to 48%'. Comments from operations team on Monzo community forum indicate that Monzo is quite happy with this result: “If we can maintain that number, and I think we can actually still increase it, we could well be looking at 5 million users in a year from now, which is pretty mind-boggling to think about.”
Not all campaigns are made equal though. As these neobanks are fairly new to mass markets not all campaigns go as well as planned. Take Revolut's Valentine campaign. It featured a tagline 'To the 12,750 people who ordered a single takeaway on Valentine’s Day. You ok, hun?' and the internet exploded. Number of Twitter posts criticizing this campaign skyrocketed calling this ad not only 'single shaming' but as well a copycat of Spotify's recent campaign.
Make sure to treat offline campaigns and consider the positioning carefully - managing the fallout becomes even more difficult with ‘layman’ audience who might not be used to your startup’s snarky positioning.
These 5 areas we chose to showcase are just a tip of the iceberg - There are hundreds of marketing growth hacks which can be used to outsmart the competitors, delight your customers and bring down your CAC. Are there any particularly smart growth hacks you came across in the fintech space? Do let us know in the comments on our social media or get in touch at firstname.lastname@example.org !