Modern Marketing

How a Goldman Sachs brand is trying to erase debt stigma

  • Goldman Sachs wants customers to know they're more than the debt they owe.
  • Marcus, the online lending startup built inside the investment bank, is focused on a speaking a different language to a different type of client.
close

Email a Friend

How a Goldman Sachs brand is trying to erase debt stigma
For most people, Goldman Sachs conjures up images of money, power and scary cephalopods. But the investment bank is getting into consumer lending now, which means it's going to have to make its brand a little more relatable to the masses. In October, it launched Marcus, an online lending startup dedicated to helping people own their debt issues with a personal loan product and a new message: "Debt happens. It’s how you get out that counts."

"There's a stigma around debt, people don't like to talk about it," Nicole Sbarra, a product manager for Marcus, said at an event in New York Thursday night. "It makes them very uncomfortable. And most people also don't think of credit card debt as actual debt, they see it as a balance... [Marcus] is going to help you understand that there’s more to you than this extreme amount of debt on your shoulders."

While it's a shift away from the image Goldman has built over decades, Marcus by Goldman Sachs is its own brand, which is as much to avoid alienating long time Goldman clients as it is to give confidence to Marcus customers. Marcus was built inside Goldman Sachs from scratch; no branches, no outdated technology systems, no baggage. Marcus was co-created with thousands of consumers that helped designers to find out how they can best tackle the problem of getting out of debt. Marcus loans come without fees and lower rates than those of many credit cards, making it well positioned to compete with consumer banking products and online lending startups like Prosper. Keeping the brand separate, as much as possible, from Goldman is necessary, in some ways, considering the bank's history. From 2005 to 2007, Goldman issued and underwrote mortgages and securities backed by residential loans that were borrowed by consumers with poor credit. This led to the housing bubble burst and economic recession. Last year Goldman paid out $5.1 billion for its role in the financial crisis. A key point the Marcus team found through research sessions was that when dealing with their finances -- and particularly sensitive subjects like debt -- they want to work with "a trusted, secure, extremely well-established brand," Sbarra said. "Marcus is a brand new brand, but Goldman Sachs has been around for a long time," Sbarra said. "People like to think about banking with Goldman Sachs, but we think of ourselves as a startup within Goldman." Money is one of the most personal and sensitive topics for people, even people with lots of it, which is why empathy plays such an important role in building a financial product. The average American carries some $16,000 in credit card debt and about 70 percent of them don't know there are alternative options to that credit card debt, said Michael Cerda, head of product. “The team spoke with some 10,000 customers and learned about this stigma, learned about how to consult about it, learned about how anxious people got about it," Cerda said. "It’s everything from that emotional level to the detailed level of all these fees, all these rates, the jargon and the terminology. What the team did was really take a great swing at making it very simple to understand.” For example, they learned that "origination fees" are widely misunderstood among the general population, so Marcus calls it a "sign-up fee" on the site -- as in, "No sign-up fees. Since that's not a very warm welcome." Consumers said other players in the space put credit scores and APRs front and center, so Marcus asks how much users want to borrow and how much they can afford to pay on a monthly basis. “People don't think about when they want to be out of debt by, they think about what they can afford to pay every month,” Sbarra said.

0 comments on “How a Goldman Sachs brand is trying to erase debt stigma”

Modern Marketing, Podcasts

Marketing financial services to Gen Z with Step’s CJ MacDonald and Visa’s Ruben Salazar

  • FIs are beginning to wake up to the importance of Gen Z as an emerging customer. But they don't necessarily know how to reach them and what to say.
  • We speak with Visa's Ruben Salazar and Step's CJ MacDonald about what's working in marketing to the young generation as part of our podcast series on Gen Z.
Zachary Miller | September 12, 2023
The Customer Effect

‘We don’t make that much money on them’: The opportunities and gaps in banking with Gen Z

  • While Gen Z is estimated to have $360 billion in disposable income, only 33% of them are using a financial provider. 
  • David Donovan, EVP of Publicis Sapient, talks about the opportunity Gen Z represents for FIs and why they are failing at capturing the demographic's attention.
Rabab Ahsan | June 30, 2023
Modern Marketing

Breaking the fourth wall: Robinhood’s foray into publishing, and how financial publishers work to maintain independence

  • Robinhood has announced the launch of its publishing arm, Sherwood.
  • The news raises questions about timing as well as how to maintain independence as a publisher running on an ad/sponsorship model.
Rabab Ahsan | June 13, 2023
The Customer Effect

How are consumer habits and spending changing due to economic turbulence?

  • Economic turbulence is changing consumer spending.
  • 66% of people say that the current economic situation is making them reconsider how much they put aside for their emergency fund, while others are pushing away travel plans and dipping into their 401k.
Rabab Ahsan | April 27, 2023
The Customer Effect

22% of Americans think ‘net worth’ only applies to wealthy people

  • American consumers are more aware of celebrity net worth than their own.
  • Younger consumers, those heading towards retirement, and women are the most likely to not keep track of their net worth.
Rabab Ahsan | April 20, 2023
More Articles