The Acquire Podcast Ep. 13: How Stash uses financial education to acquire cradle to grave users
- This week, Stash’s CMO Dale Sperling joins us on the Acquire Podcast.
- Financial literacy is foundational to Stash’s brand. We break down some of the strategies Dale’s team employs to reach untapped markets in creative, meaningful ways.
Episode 13 of the Acquire Podcast is about building financial literacy, both as a solution to a financially stressed America, and as a medium for branding and marketing.
A few fintechs do this well, and Stash is one of them. Stash is a personal finance app that aims to make investing accessible to the 99% (of Americans). And to get people investing, they need to first understand the basics of their financial picture.
For some background, financial literacy is not doing so great in America. The most recent figure I found was from the 2014 S&P Global Financial Literacy Survey, reporting 57% of Americans are financially literate. The big issue, which perhaps is why this often quoted figure is so old, is that financial literacy is hard to assess, and has different definitions and standards across states.
Figures aside, financial literacy is agreeably an important problem. When fintechs are able to address it by way of building and strengthening their own brand, it’s a win-win.
I’ve got the chance to virtually sit down with Stash’s CMO, Dale Sperling, to pick her brain about how, without needing to spend huge budgets, Stash uses creativity, data, and the right partnerships, to develop and strengthen Stash’s brand mission of financial literacy across America – in their Stash101 campaign and beyond.
The following excerpts were edited for clarity.
You've been doing marketing for pretty much your entire career and at Stash for seven plus years. What can you tell us about the landscape of branding and marketing finance services over the past seven years?
Well, it's been a journey, and I can tell you that the only thing constant is change.
The unique role of the CMO has evolved over the years – certainly over the 20+ years I've been in this space. What the CMO needs to do in any organization is adjust to the dynamics of the team, the organizational design, and be a chameleon for what the organization needs from the CMO at that time.
At my beginning at Stash, I was a marketing consultant focused on growth: How do we get product market fit? How do we figure out how to get customers to our front door? How do we even figure out if this is a product that people will want to use? A lot of the work in the marketing space was driven in UX research and figuring out where we have products that resonate, how we make it work, and how we get people to come to the front door and actually convert.
That then evolved into more data analytics, advertising, and making sure that we could grow fast once we figured out we had product market fit.
Then more needs came from the marketing demands: How do we retain our customers, now that we have them here at the front door? How do we make sure they have a really amazing experience? How do we deliver advice and education? How do we keep them engaged and retained?
As the organization has evolved, the role of marketing has evolved to meet our needs. And that's the guide here: Deliver what the organization needs at that time in its journey. That can span anything from top of the funnel, ads, campaigns, creative, and all the way deep into conversion, retention, upgrades, customer service, and all these great things that that the marketing team could touch.
That’s a really good explanation for my understanding thus far about the role of marketing and why it’s so “hard” – there's constant change, and it's always trial and error. But that also makes it really interesting, because you’re adapting directly to the growth of the company. I'm wondering, have you seen any interesting changes, or ebbs and flows in the industry as a whole from your time here?
The focus has become about being a data driven CMO. Ten or fifteen years ago, marketing was seen as more a creative role in advertising, about reaching customers, and creating campaigns.
Now it's become about: How do you drive conversion? How are you ‘growth hacking’ without spending money? How do you align with your product, and lean into products, features, virality, and referrals to drive growth, and connect to your customer through that data without having to spend money? That's the big shift I've seen over the years in this particular role: You've got to be data driven, you've got to be product aligned, and you've got to be leveraging what you have without needing to spend huge money across big campaigns.
Let's put that lens now on your latest initiative as CMO, Stash101, as we’re talking about it from a branding perspective.
Stash101 is Stash’s financial literacy program, which recently became the standard curriculum for middle schools across North Carolina's public school system. For some background, only a handful of states currently require students to learn about personal finance, in a one semester, half credit, during high school at some point, and that's for their entire K-12. Financial literacy initiatives are really only starting to scratch the surface. From your worldview, as a personal finance tech company, how do you see this problem?
It’s a huge problem. You have a potential customer base that is coming out of school, starting their lives, and they don't know how the basics work or how to manage their money. It’s a challenge for them to even engage with and use our product appropriately.
Stash101 is a manifestation of our organizational focus around education. It’s something Stash has been committed to since the beginning. We believe that when a person has the knowledge to manage their own finances, and the tools to do it themselves, they can have amazing outcomes. So we've always prioritized education here. Stash101 is just the next step in the journey. It enables us to build out free educational experiences for the general population and students.
My goal is to make sure we're giving that free education to people that need it the most: kids, schools, young adults; then hopefully giving them more education investment advice when they become a Stash subscriber.
Our target audience for Stash is specifically Millennials. The majority of Americans are also living paycheck to paycheck, and 33% of Americans aren't currently invested. That's a huge, huge miss in the opportunity to grow wealth. So when we can address this market at younger ages, and help them understand why they should be investing and how to invest, we can really impact change.
We're reaching all the way down to students and teachers in K-12, even some post secondary with our classroom experience, and that really gets them started on their journey. The more we can evolve that programming, the more we can get states like North Carolina to get on board, the more states that actually require financial literacy education in their high school curriculum – the better off our population will be, and the more opportunity for Stash to deliver this much needed service for these young adults and for our customers.
Right now, those handful of states require a one semester half credit course, which is so much more than what we've ever had before – definitely so much more than I had in high school. But it's obviously not enough; people’s financial picture is more complex than a one semester curriculum. How did you design Stash101 to address the multiple touch points of people’s financial lives and meet them beyond K-12, where the majority of your potential customers are?
Think of Stash101 as our educational experience. We have a classroom product in schools, which currently has over 100,000 students with access to it. In the fall, we should see another half a million come to the front door and use that classroom product through a lot of the partnerships that we have created with North Carolina and FoolProofMe.
We're also working with an organization called NOCAP to deliver a financial literacy curriculum to student athletes.
And Stash is also providing education to the masses, not just through schools. We have a FinLit course that we can engage all 18+ users coming to the front door. We have this really cool game called Fantasy Investing – in fact, I challenge you to play it – where you pick a diversified lineup of stocks, bonds, and ETFs, then play against the general population in a weekly game. It’s another way for us to engage people in investing, in a fun way without risk, because you don't have to pay to play.
We're continuously building out these unique ways to introduce people to financial literacy and the basics of investing or budgeting, and we'll continue to do that so long as we're providing value and we get that engagement.
Speaking of engagement, Stash101 is completely 100% free which is great – and that’s because the engagement ultimately brings people back to your personal finance app, correct?
Stash101 is free, and when we have the opportunity to, we will offer our 101 audiences, like the general population that comes to play Fantasy Investing, to invest for real through a Stash account. That’s one way for us to reach the audience we're giving this education to and hopefully engage them in our Stash product, which should deliver them the tools, advice, and education they need to drive their own financial outcomes.
So what you’re setting out to create is lifelong user experience through the medium of education?
It should be. We like to call it ‘cradle to grave’: we have custodial accounts for young Stashers, then we have retirement accounts, Roth and traditional IRAs, personal brokerage accounts, and we also have a bank account.
When you open a Stash account, it's a subscription to your financial life. You have all of these different products and features that can serve you in many of your life stages.
Even if you don't have the money to invest, you can use our banking service, called a Stock-Back Card, (you get it in the mail, and you can earn stock and invest just by spending on everyday essential items. You can swipe your card at Walmart and get a little bit of Walmart stock, or on your Netflix subscription and get a little Netflix stock. And even when you swipe it at a bodega or vending machine, you get a little bit of a diversified ETF that you've picked. So it's really a product that can serve you, regardless of where you are in your finance journey.
We're really proud of that, because we've created a lot of different ways for customers to grow wealth, and learn along the way, without offering it at a high cost – it's a very transparent, fixed subscription fee.
As a marketer, how are you reaching all the people who never learned how important and possible it is to invest, or weren’t taught to believe they deserve a comfortable (and even successful) financial life? How are you normalizing the idea of understanding money markets and preserving and building one’s wealth? And how do you use data to know whether you’re doing a good job at it?
The Stash101 platform for the classroom is not just a financial literacy course – it's actually a very robust piece of software that teachers can use with the younger grades to manage their classroom and create a classroom economy that engages the students in a really fun kind of ‘game of life’. Before they even need to get into those more heavy financial topics, young kids are learning how to have income come in either through classroom chores, or fake jobs that they take; they see it come into a virtual bank account, they have a ledger, they see the balance, and then they're able to manage that money and redeem it for rewards in a marketplace.
So it starts really easy and really early. And we’re able to assess the success of this type of program with pre and post surveys and quizzes to show how the kids have increased their financial literacy. Then we're using that information to go out and share it with other nonprofits, districts, and states, to see how we can help them deliver something similar.
The problem with financial literacy requirements is that it's actually different. Every state and every district is interpreting it in different ways. And it’s a challenge for us to stay on top of it, and to make sure we're delivering the right information and experience for those students and organizations. But a lot of the data is going to be pre post work and student outcome driven.
Starting them young is definitely a good idea for ‘hacking’ personal finance at a young age. Because early on, for better or worse, we learn how to (or not to) think about finances from the adults around us, then we take that with us for life, and hopefully build atop that.
Did you build this program in-house or partner with another creator to bring the curriculum on to the Stash brand universe?
We have been building out this idea of free financial education for a while. We then found a unique startup called PayGrade, created by a husband and wife team. The wife Janessa is a middle school teacher, who was initially solving a problem she had in her own classroom about how to teach kids about personal finance. She's really passionate about it, and she somehow convinced her husband to quit his job and help her build it. So over a series of years, they started building out the software and platform that then enables teachers to come in, customize it for their classroom, their students’ age, their needs, and the curriculum they have to deliver.
We were able to acquire PayGrade and rebranded it to be part of Stash101. It's become a really exciting part of our strategy and media property that we can use and deploy for partnerships and schools in this free capacity. It's definitely just a piece of 101, but a really valuable piece that we hope to continue to evolve over time.
We’re talking a lot about children, and that’s definitely important to get them early. But we know that even if financial literacy became mandatory in every school district, children don’t grow up in the same homes. Financial literacy and lack thereof can also be seen as a community-based problem.
So through 101 and our classroom, we do target and work to reach communities that don't necessarily have the same access to education. And because it's free, it enables us to deliver a value-add to those communities.
Stash, in its entirety, actually serves these populations really well. Since we have such a transparent subscription fee and model, and give so much back to our customers, we feel we are really well positioned to provide a ton of value to these communities.
We provide the advice and education (that is generally reserved for the wealthy, or people that are going to an advisor) in a simple, clear, efficient way.
Can you give an example?
We know we have a high percentage of Miami citizens on the Stash app – and we know that because of zip code analysis, concentrations, and that we over-index in Miami. That is an underserved population that we have targeted specifically with an advertising campaign and educational efforts. Those efforts consist of a focused digital media strategy in Miami, as well as partnerships and out-of-home, so that we show up both in the community and digitally.
We partnered with the City of Miami and an organization called YEAR UP, and next week (June 24) we’re going to be hosting a panel at an event called Black Future Weekend with Dream Corps. We’re showing up for that community in a very specific way, with Stash as an opportunity for them to get started, promo money to make it easy for them to get their accounts opened and their financial journey going.
It’s a 360 approach when we're going after target populations and trying to help a community – digital, events, out of home, and nonprofit work.
I'm really excited about the work we've been doing in Miami, and we’ll continue to do it as it's just a community that needs our services, and we've seen a lot of success when they are on our platform using it in all the different ways to grow wealth.
Before we wrap up, I want to bring all these anecdotes and ideas back to the bigger thing at play here which is the Stash brand at large. Where does financial literacy fit in Stash’s brand ecosystem?
It sits at the center. Our guiding principles are to provide simplicity, clarity, and efficiency. The brand mission we have is to empower you to build wealth. And education really is that base of that.
If you don't have the know-how, and you're not empowered to actually execute – you're never going to get there. We have to continue to invest in educating our customers and providing that support and advice. And then with that, we can ladder you into financial success and create those great outcomes.
Looking into the near and not so near future, what would be a huge success for your team and Stash as a whole?
Stash as a financial advisor app in everyone's pocket in America. Everyone having a Stash account helps them invest as they spend with Stock-Back and grow wealth automatically with all the tools and features that we provide.
And to dream really far out – I would love to see a population that isn't in debt; that actually knows how to manage a budget; that is fiscally responsible; that is less stressed because they have more hope and less fear around their finances; that they're not freaked out about their finances, and can plan for the future.
These are lofty ideas, but I think the more people that we can reach with our product and the more Americans that have access to it, the better the outcomes are.