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From time spent to revenues generated, metrics for finance apps don’t just break records. They also cement the central position of finance apps in consumers’ lives. Frequent app use and increased trust are intertwined. It follows that increased consumer dependency on fintech and insurtech apps for assistance and advice at every step of the journey presents marketers with an unparalleled opportunity to engage customers primed to act.
But turning interested users into loyal customers doesn’t only demand marketers to target communications to inform users. They must also get granular with their segmentation strategies and map multiple journeys to reinforce positive savings and investment behaviors.
Marketers also need guidance to reimagine the customer journey map and optimize opportunities to change financial behavior – and engagement metrics – for the better. With this in mind, our CEO Sunil Thomas wrote The Rethink Fintech Playbook 2021, a companion resource as you evolve strategies and expand your toolbox to drive deep-funnel engagement and lasting retention.
Retention is the prize. But some finance app marketers don’t just achieve impressive retention rates. They set new benchmarks.
This is the case with Acorns, which stands out as the first company worldwide to offer micro-investing, allowing members to round up purchases and automatically invest the change in a diversified portfolio. Acorns counts more than 4 million subscribers on its platform who have saved and invested over $9.6 billion. And these subscribers stick around for the long term. Acorns reports nearly 99% retention – solid numbers that position them to achieve another milestone: doubling its numbers to reach 10 million subscribers by 2025.
It’s an ambitious goal that will undoubtedly get a massive boost from marketing and messaging that “simplifies investing and rewards positive, long term behaviors,” according to Noah Kerner, CEO of Acorns. Pursuing this – and fulfilling Acorns’ mission to bring financial literacy to the mainstream requires expert execution and a deep understanding of what it takes to help subscribers on their journey. This includes badges, push notifications, nudges, and other approaches that activate and motivate members to pick and stay the course.
Much of the work – and a lot of the credit – for orchestrating the strategy to establish Acorns as a one-stop shop for savings and investment rests with James Moorhead, Acorns’ CMO. Named by Adweek Grand Marketer of the Year for leading the iconic Old Spice “Smell like a man, man” advertising campaign, Moorhead has a proven record of scaling businesses and catering to customers. Prior to joining Acorns, Moorhead served as the CMO of the satellite television giant Dish Network, where he helped increase the market capitalization by 3X from $10 billion to $30 billion. Before that, he scaled the car insurance start-up Metromile from $1.5 million in revenue to $100 million in 3 years.
In this episode of CleverTap Engage — our podcast and video interview series where we shine a light on marketing leaders achieving meaningful and memorable customer engagement — co-hosts Peggy Anne Salz and John Koetsier sit down with Moorhead to talk about the role of education and gamification in advertising, He also discusses the cornerstone role of segmentation in a successful retention strategy and the importance of building a long-term relationship with subscribers.
Acorns is about helping subscribers achieve their personal goals through adopting the right behaviors that achieve long-lasting benefits. “[Our product] has been built for the masses,” Moorhead says. It’s an attractive offer, but many coming to the platform are new to investing and uncertain about taking those first steps.
“Our biggest challenge or biggest hurdle with consumers is quite frankly, inertia,” he explains. That’s where customer education combines with advertising to build confidence and engagement. “Our marketing is about education and nurturing a consumer to believe that they can [achieve their goals].” In this scenario, he adds, marketing becomes the empowering first step that helps consumers act and set themselves and their families for a more secure financial future.
Reaching nearly 99% retention is phenomenal. But the real feat comes when a company can maintain these levels. Acorns does both thanks to a sharp focus on defining meaningful milestones along the entire customer journey — milestones that reinforce positive behaviors and encourage commitment.
It’s all about “making sure we touch them [subscribers] when they have these behaviors or get to those hurdles,” Moorhead explains. And these nudges, badges and prizes are never a one-off. Acorns continues to motivate subscribers with the help of gamification and personalization so that they demonstrate those behaviors over time and across more products.
Personalization starts with segmentation. Their approach wasn’t set in stone. The company purposely “let segmentation be led by the customer and what we’ve learned about the consumer over time,” Moorhead says. That allows the company to develop the customer journey, and it informs the creative and messaging strategies that equip them to deliver the right marketing to the right consumer.
There is value in relevant marketing that customers appreciate, which is why Acorns also orchestrates its suite of CRM tools, from email to in-app notifications “based on our segmentation of a series of … nurturing engagements for consumers,” he explains. “Some people prefer text messaging versus in-app messaging versus… And so, we’re continuing to evolve and increase [the] level of personalization so that we can serve people how they want to be served.”
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Rethink Fintech Playbook: 2021
John Koetsier
How do you follow up explosive growth with lasting engagement? Welcome to CleverTap Engage episode eight.
Peggy Anne Salz
And we’re looking at finance apps, and finance apps are having a moment. They’re hitting new records. So, App Annie, for example, reports app downloads alone totaled a massive 4.6 billion in 2020, outpaced all downloads across all categories by a factor of two, John. Time spent in finance apps, because we’re interested in retention and engagement, time spent increased by 45% over the previous year. And participation in stock market apps, investment apps through apps such as Acorns grew by a massive 55% globally.
John Koetsier
All sounds great, and it is. But it also brings new challenges, massive amounts of competition, huge increases in the cost of customer acquisition, and of course, the need to engage and retain all those millions of new users. My name is John Koetsier. Today we’re talking to one of the most impressive marketing experts in FinTech.
Peggy Anne Salz
And my name is Peggy Anne Salz. Of course, we’re here at CleverTap Engage. It’s all about finding the best mobile marketers and sharing their secrets with you. So, we are chatting today with James Moorhead, the CMO of Acorns. He’s the former CMO of Dish Network. He scaled the car insurance start-up Metromile from 1.5 million in revenue to 100 million in 3 years, John. So, we do have a master mobile marketer. He’s also been named Adweek Brand Marketer of the year. And we want to welcome him. Welcome, James.
James Moorhead
Thank you so much, excited to be here with you today and looking forward to the conversation.
John Koetsier
Wonderful. James, we want to obviously learn all your top marketing secrets, but we want to start with you first, get a bit of an intro. You’re an interesting person. You started as a traditional CPG marketer, Procter and Gamble. You’ve turned into a tech start-up marketer. How on earth did that happen, and what did you learn along the way?
James Moorhead
Yes, well, it’s certainly been a fun journey ranging from pay television to car insurance and lending, and now financial services in the app space. But a couple of key lessons, I think, on the personal side and on the business side. I think on the personal side, go for a business where marketing is a key driver of growth for that business. And I’ve tried to sort of role model my career as I transitioned from CPG into tech, tech businesses that were driven by marketing, right? And there’s a lot of tech businesses that will grow sort of organically on their own, not necessarily leverage the skill base that a marketer has. So, I think that’s sort of an important lesson as people are navigating their careers. And then I think the second thing is, find a values match in the organization that you’re going to and make sure that that’s really strong. So, those are two personal important lessons for me.
And then I think my path has been all about building skills, and I knew as a CPG marketer, there was this whole thing called direct-to-consumer marketing that I didn’t understand. And there’s this whole thing called performance marketing that I didn’t have experience with. And so, when I left P&G, and I went to Dish Network, it was about understanding direct-to-consumer and subscription marketing. And then when I went to Metromile and helped scale a couple of start-ups from smaller to bigger, it was really about having that experience, sort of full cycle with a consumer, owning that relationship and building that from a small scale to a big scale.
Peggy Anne Salz
And speaking of scale and growth, you’re in your element in FinTech, I believe, because we were talking about it, bringing you in here. FinTech has exploded over the last two years, obvious reasons for that. What’s that growth looked like at Acorns?
James Moorhead
Yeah. I mean, FinTech has been exploding for years, I think now, right? You had sort of this generation one which was sort of the early web movers, right? You had the allied banks and the lending clubs and many others that really just brought some of the different services that were available purely online. And now we’re sort of in this, I think generation two or three, depending on who you talk to or how you look at it, where it’s really this mobile-first world and mobile-first banking digital banking and investment platforms that are B2B, B2C, and that have been seeing just tremendous growth. And it’s really where the fish are, right? Consumers are on their mobile devices more than ever, certainly through the COVID time period. And now we’re putting services in the palm of their hands where they can engage every single day and have a much better experience without having to leave their home and go to a physical institution.
Peggy Anne Salz
You mentioned COVID now, that was certainly a driver, and I’ve read a lot and seen a lot of the research around how that impacted FinTech apps. For one thing, we looked at them more as part of our daily routine, part of our lifeline. If you’re an investor, this was where you did it. This is where you lived. People are gravitating to their FinTech apps, absolutely. How do you keep your users engaged and loyal, or your members rather?
James Moorhead
Yeah. I think it starts, first and foremost, with providing a simple, accessible consumer-friendly platform or experience. And so, the reality is, what are the core differences going to be? It’s going to be the experience that we offer consumers and the brand that we build around that experience. And so, for us at Acorns, that’s been a cornerstone from day one is building an amazing brand and building an amazing product experience for consumers. That leads to really best-in-class retention at Acorns. So, we believe it’s kind of built around those two things, and fundamentally like if the product doesn’t work and isn’t great, like you’re not going to get the growth, the talk value, right, and the sharing and the referral that are core to driving these businesses.
John Koetsier
I had to think about the movie “Office Space” when I checked out your website. You have this very cool feature that lets people invest without thinking too much about it. Rounding up a little bit here and there. You know, in “Office Space,” they have this scheme where they’re rounding up and depositing that into an account. Was that part of the inspiration there, or was it totally different?
James Moorhead
Yeah. What a funny movie? The inspiration was different. At Acorns, we’re definitely about saving, investing for the long term. And the inspiration was really a digital piggy bank, right? When those of us here grew up, right, when you got change from a purchase, you put it in a piggy bank, and it sat there, and eventually, maybe you have the opportunity to do something with it, for school or something else. And Acorn is really born out of that, right? When you think about rounding up your spare change on a transaction that took place on a debit card and not just putting it in a piggy bank but putting it in the stock market. And having the opportunity to grow with the market over time. So, that was really the origins of the Acorns app.
John Koetsier
I love that. I absolutely love that. You’re spending 23.37 on something, you add up and there you go, $24, $25. The extra just goes into your account to invest, and over time who knows what that’ll build into. Great.
James Moorhead
Yeah. It’s really amazing. I mean, just each transaction putting 50 cents, 25 cents, and if it ends up being $5 a week, it can really add up over time. And the app also has a series of other saving and investing products beyond the core feature of Round-Ups, where you can save for retirement with our Later account; you can save for your kids through our Early account. And then we have a full suite of digital banking and checking experience as well.
Peggy Anne Salz
I’ve been checking that out. There’s a couple, a little bit of gamification going on in there, badges, some cool stuff, a little bit of a feel for that. I think it’s saving for your retirement, but overall, the habit, the attitudes towards micro-investing, that’s also a learning curve. You’re a brand, you’re a major brand, but you still need to educate users around this, how to do what they’re doing on a finance app. And you’re also very focused on your goal, which is to make it possible for every American to be an investor, which is very ambitious as well. How do you do that?
James Moorhead
Yeah, I mean, we’ve been built for the masses, and if you think about it, the vast majority of people coming to our platform have never invested before. Our biggest challenge or biggest hurdle with consumers is, quite frankly, inertia, right. It’s taking that first step. It’s saying I’m going to start saving. I’m going to invest in the market if you have a series of funds. And so, our advertising, our marketing is about education and nurturing a consumer to believe that they can do that, right, and be that empowering first step for them, really setting up a financial future for themselves or their family. So, it really is about being a part of the inspiration but then ease of use.
Peggy Anne Salz
So, it’s a positive outcome. It needs some reinforcement, however, and your CEO, Noah Kerner, has said that a big step in this direction will be marketing and messaging that “Simplifies investing and rewards positive long-term behaviors.” I’d like to understand that a little bit more. And in that the role of personalization in driving these positive results and basically influencing investor behavior for the better.
James Moorhead
Yeah. I take this back to thinking about education as a young kid going through school or playing team sports. Where you had a teacher that would nurture you along and help you along the way and educate you and coach you on the right way to do something, and give you positive reinforcement, right, when you did something great. And same thing with coaches in sports, right, helping guide you in the right direction, teach you what was right and course-correct at times and/or, really nurture and give you that, like, feeling of, wow, I did something amazing, right. And so, we’ve learned for consumers over time there are definitely these milestones, in their journey of saving and investing where, if we can reinforce the behavior that they’re demonstrating, right, it gives them this feeling of, we talk about dopamine internally, right? It’s like, wow. And we know when they get to certain balances, right? Retention rates continue to improve.
Now, we have phenomenal retention overall, but the way we begin to improve, sort of the customer’s experience, is just reinforcing those positive behaviors, right, personalizing that. Making sure we touch them when they have those behaviors, right, or get to those hurdles, and reinforce those things. And then continue to educate so that they demonstrate those behaviors over time and across more products. And that’s one of the great things about having a subscription is you get a full suite of tools for a really, really low cost. And the value we’re providing consumers is just tremendous.
John Koetsier
I absolutely love that because that’s personalization that isn’t for the sake of personalization. It’s in response to what somebody has done. They’ve achieved something; you respond to that and perhaps open more doors for them. That makes a ton of sense. You just mentioned that you have plans that are paid, and they’re not expensive, but they are paid. Not every FinTech app does that. Do you have that for a reason? Does that change customer perception of those services? Does that change engagement with the service or behavior?
James Moorhead
Yeah. I think there’s a couple of things to that. Typically if it’s a free service, you’re actually the product yourself. And so, you are being monetized in other ways, and that’s very common in the FinTech space amongst others that you’re very familiar with. So, it is our belief in simple, transparent pricing where you know exactly what you get and how our business is monetizing the consumer over time. That transparency will win in the long run, and we believe we can provide tremendous value for consumers, and quite frankly, for us to stand up this business and build this business and provide amazing services to consumers like there has to be some value exchange, right? So, we continue to see that our consumers are getting tremendous value in it overall as they adopt multiple products. And we believe that simple, transparent pricing is the key to the future where other less transparent models, quite frankly, are going to be challenged in the long run.
John Koetsier
That makes a lot of sense. Is that connected with your segmentation strategy?
James Moorhead
Certainly, segmentation is a cornerstone to us driving personalization for consumers. It’s certainly a cornerstone to how we think about building out our products and services and suite of tools for consumers, whether it’s part of a bundle or an à la carte option or different ways to think about our service evolving over time. And we’ve certainly done the foundational segmentation work to enable preparing a better pipeline for consumers over time.
Peggy Anne Salz
Because we’ve spoken with so many marketers who see pricing as part of the segmentation strategy, John, I’m wondering to what extent that also plays a role here because it does not just only ensure that we’re committed to using the app. And we’re part of a certain path that follows a personalization or segmentation approach and tactic, but it also allows you to decide how you’re going to engage with users and set a certain price, set an expectation. Is that playing a role here in the formula for segmentation?
James Moorhead
We’ve let sort of the segmentation be led by the consumer and what we’ve learned about the consumer over time. And through our customer journey work, pricing has come along for the journey with that. So, our focus is really about providing a great value to consumers and a suite of tools that are simple and easy to understand. And a lot of things fall out of that segmentation, right, from creative and messaging strategies to pricing over time.
Peggy Anne Salz
Okay. You’ve talked about retention. You’ve said it’s phenomenal. I would love to have a ballpark on that, but if I can’t have that, what role does retention play in your marketing? For example, there are some CMOs who think of it from the get-go that the moment they acquire, they’re thinking about how to keep them. Again, what is your thought about where retention fits in, in your marketing strategy?
James Moorhead
Yeah. We’ve shared, our retention is nearly 99% over time. So, it’s really phenomenal as an organization.
Peggy Anne Salz
Doesn’t get much better than that, does it, John?
John Koetsier
No, where’s the room for improvement? Your CEO is going to come to you and say, “Hey, you haven’t improved retention. What’s going on?”
James Moorhead
Yeah. One of the things you brought up earlier, right, is obviously the cost to acquire customers in the space is something that every marketer is thinking about on a daily basis. And the leaky bucket is also something that every marketer needs to be thinking about. And so, certainly, it has been a core priority of this business from day one to acquire and retain customers and create that long-lasting relationship with them because you’re saving, investing for the long term, right. We can’t deliver on our mission of helping people save and invest if we don’t have that long-term relationship. So, it’s been a part of sort of day one from the business. And certainly, from a unit economics perspective, every marketer is focused on like, okay, if it costs me X to acquire them, but they all walk out the next day, I certainly can’t deliver on the mission as well as the financial expectations that we have.
John Koetsier
You’ve talked already about messaging people, you’ve talked about, hey, they hit a certain target, or they hit a certain threshold, and then you reward them, or you let them know about that and give them a moment to experience that win. Talk a little bit about your in-app experiences and where notifications fit. What’s the best time and place to use them in your experience?
James Moorhead
Yeah. I mean, I think we’re continuing to evolve there. I think, like any good organization, we’re doing lots and lots of testing to understand what’s the best way to help consumers adopt healthy habits overall. So, you have your traditional suite of CRM tools ranging from email to in-app notifications to push notifications, to text messaging, right, to other alert cards inside of them to alert centers, right. Wow, holy cow. And we’ve got to orchestrate, based on our segmentation, a series of nurturing engagements for consumers. It’s quite interesting, right, as you can imagine from your understanding of the gaming world… you will behave very differently, but over time, you can group some of them into some different strategies where you can…you know, some people prefer text messaging versus in-app messaging versus… And so, we’re continuing to evolve and increase the level of personalization so that we can serve people how they want to be served, right? Some people are annoyed by texts. Some people are annoyed by push, right? So, how can we get the response from them, either passively, like they don’t respond, right, or actively? How do we allow you to set up preferences, right? That would allow us to figure out the best way to communicate with you.
John Koetsier
I love that you’re intentional with that because people do respond differently based on where you talk to them, and they do want it differently as well, right. Some are checking their email religiously. For others, you will disappear into that bottomless sea. I’m talking about myself here, Peggy. But for others, like I’ll check every single text message I get. On the other hand, if I get a text message from a company and I think this is really lame, that might be a block as well. So, it’s a real dance to figure out where the right place is. In-app often works really, really well, but you’ve got to play that dance pretty carefully.
James Moorhead
Yeah. Education is a core component of what we’re trying to deliver to consumers. How we do that in a way that doesn’t interfere with their life, that intercepts them when they’re receptive, at the right time, and we can help them along their financial journey. So, it’s no easy task, right, but that’s why we’re all here.
Peggy Anne Salz
So, there are multiple journeys, multiple ways to connect with those consumers, depending on what their preference is. As you said, channel preference is just one of them. But of course, you have to know when you’re hitting the mark and when you’re not, and that’s where metrics come in. Now, that’s a very polarizing topic, right. Everyone has their favorite. Some people say this one works for me. It’s all about LTV. It’s all about whatever. What metrics do you measure, or what do you use to measure customer engagement or retention? What are you looking at? Is it metrics, events? What can you share?
James Moorhead
NPS is like a very high-level indicator, but you really need to kind of get under the hood there. You know, certainly ratings and reviews in our space are incredibly important too, right, and it’s not unique to FinTech. So, it’s critical that we are looking at and evaluating ratings and reviews on a regular basis and make sure we’re modifying our roadmap accordingly based on what we’re learning from that.
And then you have your core growth metrics that are a part of every marketer’s life, right. Are we growing revenue? Are we growing average revenue per user, those types of metrics? And unfortunately, one of the reasons I love being in technology and love being in the sort of world where you get real-time feedback is I wake up every morning, and I know how I did the day before, right. And so, I get real-time feedback in the morning, whether I like it or not. I know how we did the prior day against LTV, our LTV to CAC ratios, depending on some of those things or payback, those types of things. So, I think a lot of those are probably similar to what others are experiencing and focusing on. I think I’ll group it in sort of consumer metrics, right? Like, how am I delighting consumers, right, in the financial metrics, right? And then lastly, my team metrics, right. What’s my team health look like, and what are those metrics?
John Koetsier
That’s a really interesting grouping, and yeah, this is not an industry for those who don’t like feedback because there’s a lot of feedback in the data you get all the time.
John Koetsier
Last question, and you’re off. What is your top tip for marketers who want to boost customer retention?
James Moorhead
I think the…one of the most amazing developments over the last decade has been much more granular understanding of a customer journey mapping, right, especially in a direct-to-consumer business where you can track every touchpoint. I mean, obviously Apple and privacy, and some other things are evolving here over the last 6 to 12 months. But mapping a customer journey from the first touch of awareness, right, or engagement with a brand for the first time, all the way through the full life cycle of retention and referral, that is something that, over the last 10 years, we’ve really begun to be able to map and track at a very granular level, right. Every touch inside the app, right, we can watch a consumer’s journey and their growth. So, I think that that’s number one for boosting customer attention, is looking at your customer journey roadmap and then identifying the pain points and then solving them one by one by one.
James, this has been such a pleasure. It’s been so enjoyable. Thank you so much for your time. Thank you for joining us on CleverTap Engage. We really do appreciate it.
James Moorhead
Yeah. Thank you so much for having me, I really appreciate the time and the interest in Acorns and what we’re doing for consumers to help them walk their journey and learn and grow and save and invest.
Peggy Anne Salz
And thank you as well, James, because it’s very interesting to hear more and more about how consumer and customer education is part of the engagement journey. So, that was interesting as well. And of course, for our audience also interested, if you’re watching this in the video, then check out the audio podcast, which is easy to consume on the go. And if you’re on the audio version, it’s just like with you, James, and the channels; take what you want. If you’re on audio, then look for us on YouTube and chill out and watch this wherever you want. It’s all of you; you’re in control.
John Koetsier
Absolutely and this podcast, of course, is about finding the world’s best marketers and getting their top tips, right, prying them out of them. If you fit the bill, ping Peggy or me on Twitter or LinkedIn, we’re available, we’re out there, let’s get you set up for your own show. Until then, this is John Koetsier.
Peggy Anne Salz
And this is Peggy Anne Salz, for CleverTap Engage.
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