Monzo banks on super-fans and TV to drive growth
Monzo, the mobile-only bank, has said it has such highly engaged customers, it could march them on the streets to make banking better.
Speaking at MAD//Picnic this week, the start-up said its strategy of asking customers to participate in the future of the business was grounds to improve a sector largely mistrusted by the public.
"We want to start influencing the industry for good," said Monzo's head of marketing and community, Tristan Thomas.
"Banking is not necessarily one of the most well respected industries in the world, so we have a real opportunity to fix things; to force traditional banks to become better at dealing with customers and meeting their needs."
The rise of Monzo has coincided with a marked decrease of consumer trust in traditional banks, stemming from the financial crash almost a decade ago. Indeed, a 2017 YouGov poll found that just 36% of British consumers now trust banks to work in their customer's best interests.
No one at Monzo watches television, so doing our first TV ad was a tough sell"
Operating with transparency at its heart, Monzo - which is now valued at £2bn after a fresh funding round - therefore relies on its customer base to keep it accountable, much like mobile operator GiffGaff.
Employees directly communicate with the 'community' via its online forum, and its customers are entrusted with important company decisions - such as choosing its pricing structure for withdrawals from ATMs abroad, or choosing - after traditional banks failed - to help gambling addicts by blocking certain payments.
"We have two million, soon to be three million, very, very engaged customers," Thomas said. "We've moved on from being just one company calling for change and new legislation. We could put people on the streets to march for it."
As it stands, the customers are more likely to join one of Monzo's office events where they are encouraged to explain their banking needs face to face. The events cater for the super-fans - dubbed "Monzonaughts" - to more casual users or investors.
"Involving people in this way is potentially a huge change in the way we go about influencing society," Thomas said.
It's a customer-centric strategy that is clearly working. The sharp rise in new customers has seen the business hire an extra thirty new staff every week.
However, it is still a loss-making business and so its advertising strategy is evolving as it boosts scale.
"12 months ago we had 300 employees, with just four in marketing with a budget of less than £10,000," Thomas said.
"We now have a thousand people, with a hundred million in new funding and around thirty people in marketing and communications working with a much bigger budget."
At launch in 2015, Monzo's marketing relied almost exclusively on word-of-mouth, and has since used social - Twitter and Facebook - and some modest TfL ads.
"We've moved from around 80% of customers reaching us via word-of-mouth, to around 40-50%," Thomas said, adding that Monzo had perhaps been "too obstinate" in its advertising approach in the past, and has therefore made the "terrifying" investment in TV.
"It's really expensive and no one at Monzo even watches TV," Thomas said.
"We had 700 people and only five watched it. So doing our first TV ad was a tough sell. But we needed to reach millions of people so we just went with it."
Monzo launched the TV ad at the start of the summer, and said it is helping to add 200,000 new users each month. It expects to hit three million in total shortly.
However, asked which advertising channel delivered the best results for the cost, Thomas said Facebook was "still very high performing."
So as the bank grows up and moves from challenger brand to sustainable business, it is unlikely to ditch social media any time soon.