SoFi, Elevate and other PFMs are using the holidays to teach budgeting
- Personal finance platforms are using the holiday season as a way to stimulate a consumer conversation about money.
- Timing marketing campaigns for the holidays is a way finance companies can draw attention to customers' money challenges and "nudge" them to consider new products.
This week, newspaper readers in major U.S. cities may stumble upon an unusual Black Friday circular — one that includes the prices of goods with added credit card interest. It’s a way financial services company SoFi is trying to reach consumers who are at risk of falling into debt traps.
SoFi is part of a growing number of finance companies using the holidays to get customers to think about how much they’re spending as a way to engage existing customers and possibly gain new ones.
“People really don’t know how much things cost, and they end up in credit card debt — our goal is to help people get out of debt and realize their ambitions,” said Joanne Bradford, SoFi’s chief marketing officer. SoFi is running a circular in six major newspapers across the country, a list that includes The New York Times, The Wall Street Journal and The Washington Post.
The objective of the marketing effort, which is SoFi’s first newspaper ad campaign, is to get customers to think twice about how much consumer goods actually cost and consider consolidating their debt through a SoFi loan. As for choice of medium, the company said it’s a way to meet customers where they are. The reference to SoFi and its website are in small print — so rather than an overt product push, it’s a nudge to get a consumer to think about getting a handle on their personal finances.
SoFi’s approach is a way fintech companies are marketing themselves through content meant to provoke and engage, or in SoFi’s words, “create a conversation.” Meanwhile, online nonprime lender Elevate’s in-house think tank, the Center for the New Middle Class, released a holiday spending poll to draw attention to what it contends are some lesser-known facts about holiday spending. For example, the poll found that customers who hunted for sales to control holiday spending were 45 percent more likely to report that they overspent their budget during the holidays compared those who said they didn’t focus on sales.
“We want to raise awareness of the nonprime customer and their challenge,” said Jonathan Walker, the Center’s executive director. The goal isn’t to push a specific product, but to encourage a broad swath of customers to think about how to manage unexpected expenses.
Personal finance apps are pushing holiday-specific notifications and content marketing to reach consumers. For example, Vishal Srivastava, Clarity Money’s director of data science and engineering, said that during high-spending periods like the holiday season, Clarity pushes up insights on customer spending habits within customers’ news feeds in the app. Meanwhile, MoneyLion uses its data analytics tools to amp up customer-specific financial advice. “For example, if we detect you’re a Target customer, we provide advice to help you can stack coupons to get double the amount of savings,” said chief marketing officer Tim Hong. Customer data can also lead to product recommendations; for example, based on customer spending habits, Clarity can tailor credit card recommendations designed to save customers money. For external audiences, both Clarity and MoneyLion push out personal finance advice through blog posts that are promoted on email and social media.
Using the holidays as occasions for finance companies to market the concept of effective budgeting is a new tactic that platforms are only just starting to use.
“Most fintech startups haven’t really played in the holiday space,” said Bradford. “We try to do things differently — we don’t try to keep up with the pack, but change the pack completely.”
Photo: Flickr/n.karim (image has been cropped)