BuzzFeed, if you haven’t heard of it, is a digital media company that specializes in making viral content. One of their most successful brands is Tasty. It is their food brand built upon those overhead, time-lapse videos of people making a recipe. I’d wager that you’ve watched at least one all these videos all the way through. They are very engaging! For those who haven’t seen one, go watch. I’ll wait.
BuzzFeed’s business model has been making money by creating viral content on other platforms like Facebook and Instagram. That means they are helping others make money by forsaking customers to come to their digital properties. So how does a global media company get their loyal Tasty followers to get off of Facebook and on to BuzzFeed? Start selling a Bluetooth-enabled, $149 hotplate (and pots), of course! That’s right – a viral media company’s new product line is a kitchen gadget. People love the Tasty videos and instead of trying to change their digital habits, Tasty opted to compete in a different part of the customer’s life. Will it work? We’ll see. It’s certainly clever and the initial reaction is positive.
A Recipe for FinTech
So what does a hotplate have to do with FinTech? BuzzFeed certainly didn’t have “hotplate” on their product roadmap goals when they started their business. For banks, financial institutions, and others to follow – particularly decision makers who are getting pitched new ideas – BuzzFeed’s choice is a novel idea for attracting customers. There are two ingredients to BuzzFeed’s approach: a new product and a new marketing strategy. Both are equally important to attract and convince customers to change their habits.
A Better Way to Pay?
“We heard you needed a better way to pay” is Zelle’s tagline. Pay whom? When? How much? For what? Why? Don’t get me wrong, Zelle is a better way to pay. I used it today and it was a great experience but I’m certainly not rushing to tell my family about it. Venmo is also a better way to pay and has built its own ‘hotplate’-like feature (the social feed) as we discussed in last week’s review.
We do want a better way to pay (as do other financial transactions)
This week we published, “Payments: A Fading Experience.” As Elena wrote, “It’s not the payment itself that constitutes a successful interaction of any business with its clients; it’s the experience of the product/service that business offers. The payment is only a step toward connecting people with one another, and with brands, rather than a self-sufficient activity and value.”
Payments, in the end, aren’t about payments at all and it is those who are closest to the payment experience that understand this (and that isn’t the traditional financial services companies...yet). The question is: when will banks start thinking products (and partnerships) that are outside of the traditional channel in which they serve? Amazon didn’t have a grocery store (at the time of Amazon Go) but they did have a culture of being hyper-focused on the customer needs which lead them to a “payless option.”
Where were the banks, card networks and payment companies innovating by creating a new product like a store, rather than just a new way to pay? You may think, “Well, banks don’t have that expertise.” On the contrary, large banks seem to be sitting on a ton of prime real estate (branches), customer service (branch workers), and infrastructure (financial services) to begin experimenting with completely new products and services. I know these conversations are happening in large banks but when will we see action? When will we see a risk and large promotion of a completely orthogonal product created by a bank?
(Note: If you want a FinTech example, look no further than Stripe’s Atlas - a way to incorporate a company.)
Today’s Incumbent Opportunity is Better Marketing
Everyone is pleased that FinTech is embracing design thinking. It’s great that the industry continues to improve and care about customer experience, particularly when it comes to the digital experience. That digitization is necessary but it won’t save banks losing customers (and revenue) to SoFi, Amazon, and Venmo. The design thinking approach will (at some point) result in brand new products and services that banks never thought they’d find themselves in. That will take time (and experimentation) so for now, the solution is better marketing.
While writing this article, I conducted a very brief experiment to see how banks were marketing their mortgages. I visited the mortgage pages of Bank of America, Chase, and Wells Fargo to compare them to Rocket Mortgage and SoFi. All of these banks can finance your home but how they market to you is quite telling.
Bank of America: “Get the right mortgage to finance your new home." Customers want a home but need a mortgage. The order is important.
Chase: I appreciate the practical approach of Chase’s “What do you want to do?” It’s clear, though not very compelling.
Wells Fargo: They just want your contact information (it seems). It goes right to a form so they can contact you. A conversation is better than an online form but first, give me a reason to provide my information. How about something like, “Buying a home deserves a conversation. We’ll call you and talk you through the right options.”
Rocket Mortgage and SoFi speak for themselves.
Who at your company is cooking up new ideas focused on why customers need your products? Are you positioning and marketing your products and services to fit into your customer’s lives? Remember, sometimes it not what you sell but how you sell it.