This is part of our new ‘HEART Truths’ blog series designed for senior growth and insights leaders at subscription and digital services brands. HEART by MTM is a proprietary growth framework for healthy acquisition and retention across entertainment, Telco, FoodTech, TravelTech and FinTech sectors.
To get under the skin of one of HEART’s featured FinTech companies, Wise, we invited Michele Galli, Senior Product Manager at Wise over to MTM for a heart to heart. What follows is a lively Q&A between Michele and Jonathan Stone, MTM’s Director and Head of Tech & Telco, that spans several of HEART’s brand experience drivers. Read on to be inspired by how being mission driven leads to healthy acquisition and retention at Wise and the importance of authenticity.
Key takeaways from the Q&A are:
- The mission drives the motion
- Subsidising acquisition is a dangerous game
- Make sure your acquisition strategy actually helps you grow vs slows you down
- Have enough belief in your own product to take bold decisions
- Drive trust through customer centricity
Jonathan: Can you tell us about Wise’s mission and the importance of this in driving both acquisition and retention?
Michele: We try to find people that can resonate with what we do, with our mission of Money without Borders. So we try to envision a world where moving money is free across borders. And so we’re trying to find the customers that really resonate with this mission, this part of the equation. Finding these high-quality customers, but from the other side, is also a matter of cost.
Jonathan: How do you think about subsidizing acquisition?
Michele: We try to avoid subsidizing and cross-subsidizing cost, if we’re trying to be value driven at a transactional level. To give you an example, if onboarding customers in Brazil costs us more than onboarding customers in the US, well then customers in Brazil should pay for the cost and there shouldn’t be any cross-subsidy. And in this way, you can control your unit cost and you have these two sides in a high-quality customer and you control the cost of the acquisition.
We’re trying to be profitable and sustainable at an atomic level, not just on the top line… so that when you’re acquiring customers in Brazil or in the UK or in the US, that healthy acquisition is actually helping you grow instead of slowing you down.
Jonathan: So healthy is almost defined by your ability to make profit from customers that you acquire?
Michele: You need to understand the mission from Wise. With Wise, what we’re trying to do is lower the price of moving money. We can do that only if this is sustainable. And if it’s not, actually, prices need to increase for our customers. So we do this from a profitability perspective, so that our customers can enjoy lower fees. And we don’t want to acquire customers that actually will make us increase the fees. So that’s why we are pretty much mission driven on how we think about acquisition and that’s why we look at an atomic level for these costs.
Johnathan: Following up on the idea about brand purpose or being brand mission, you’ve described this as lowering the costs of global money. I suppose, on some level, that’s quite a functional benefit or a clear call to action in terms of the things that you do and don’t do. How do you sell that dream to the customers?
Michele: So one thing that really resonates with customers is also the transparency around fees, because all people are always angry about the greedy banks that are making money out of your money. And when they move money, the thing that is really upsetting about that system is that most of the people don’t know they’re being charged fees. And Wise demonstrated that actually, you can have 10X less the cost to move money.
And when people discover this mission about transparency, it really resonates with people. One thing that also we try to communicate to people is that we want you to spend less money when you move money. And so if we find out that there is another company that is cheaper for you to move money with, we suggest you use that company.
Jonathan: It’s fascinating and refreshing to hear you say that! You’ve got enough belief in your own product and service that you can just be totally customer centric, give them the choices and be completely fair and honest and open with them. Do you have any evidence that even when people can see through your own platform that someone else is cheaper, that they stay with you, or do they go to the cheaper option?
Michele: That’s a great question. So that kind of thing really applies mainly to new customers. So one day, maybe a new customer can see that [comparison] table and they can maybe try another product so they can also compare how it is. Let’s say that they try you because you are the cheapest option on the market and you can provide everything we’ve talked about — that great experience and that consistency and that transparency — even if somewhere else, for one transfer, they could get it cheaper, they will not do it because they are so ingrained now with your platform and they believe in what you’re doing and they find it convenient. Then they will stick with that. It also depends on the type of customer. That’s at least what we see from the platform. And again, there are many, many aspects to this. It is not just about price, but, maybe they say the first time that they check, that the data is actually true. And then they’re going to trust you.
Jonathan: What for you is the ‘why’? Why has Wise decided not to try and fuel growth through incentives?
Michele: Mostly because when you look at the mission, it’s difficult to justify splashing a lot of money to acquire customers that are not bringing value in the short term, because means that the more you’re spending with marketing without being able to explain really well what is the type of value that you are bringing in, it means that you’re increasing your cost, and if you’re increasing your cost, you’re increasing the prices for your customers. And so you’re going against your mission. So I’m not saying we don’t do marketing activities, and we do that quite a bit and we are also increasing in doing that. But it’s more of that religious focus on really understanding that how you’re spending money is towards our customers money.
Jonathan: Yeah, it’s interesting. It’s a fascinating thing across the subscription landscape and digital service landscape as well. I think that people buy and make decisions based on emotion. You’re selling based on need, trust, transparency and emotional concepts. Whereas if you start to incentivize, it becomes much more about the incentive — how much am I getting off the price, what’s the value of that, who’s offering it cheaper or who’s giving a bigger discount.
Michele: Well, when you do it that way, you may be able to acquire the customer. The problem will be how do you retain the customer? Because when the is acquisition is opportunistic, Like I’m going there because they’re giving me £10. And then as soon as another company comes and, say, they’re giving me £15, I’m going to go there, and you just wasted £10. You can do that. These kinds of tactics can help in acquiring these people. It’s just that, again, you need to follow up with ‘how are you going to keep that customer?’
Jonathan: It’s interesting. Like Simon Sinek says, you’ve got to start with your ‘why?’ And he talks about discounting as ‘manipulations’. And I think what you’re describing is don’t manipulate your customers. Get them buying into what you’re about as a brand with specific use cases that they, that they have. And you’ve got something that helps not only with your acquisition, but it’s very much helping you with your retention because they’ve not been sold on the manipulation, they’ve been sold on the purpose.
Michele: When we talk about the consistency bit, like the discounting, is something that can work at the beginning. But then if the customer wants the same value, you need to be consistent on that and you will not be able to do that. And so, I agree, it’s a bit of that manipulation. Again, if you pair it with something, that makes sense in retaining and providing that value, but that’s why I’m trying to put a lot of focus on providing a 10X better experience, because that is 10X the value for the customer.
Jonathan: And that’s a hugely important implication, isn’t it? Let’s say it’s relatively easy to get people in through discounting, but your recommendation to brands is not to, unless you’ve got to have a strategy for that. Because by doing those kinds of manipulations, you’re inviting the wrong people into your brand in the first place.
Michele: That can happen. Yes, exactly. So you need to understand the people that you are bringing in, because it can be very, very hard when you’re trying to cross sell something that these people do not need. And again, when you understand actually the people that you are bringing in and you’re actually solving them a problem, then all the cross-sell activity, is much, much easier because it is more about just the discoverability of your other features or your other products more than explaining to customers why they need this product. They will instantly know that they need that product because they have that problem.
Jonathan: What strikes me about that is the strength of the mission. And although you’re giving away free stuff, you’re enabling competitors to get better, but the belief that you’ll always be one step ahead of them because you’ve got stronger values is so core to what’s driving everything you do as a business. Internally, culturally, externally, in your communications with third-party stakeholders.
Michele: I agree. I’ve worked for a number of companies and there were some of them where you had the values written on the wall – it meant nothing. But here, even when you interact with our CEO and founder or CPO, they live those values every day.
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If you enjoyed this instalment of HEARTtruths, read our earlier blogs in the series here.