The Acquire Podcast Ep. 14: Affirm’s Erika White on capturing Millennial humor, the flywheel effect, and marketing BNPL

Welcome to Acquire, Tearsheet’s Marketing Podcast. I’m your host, Tearsheet’s head of studio, Rebecca Cohen.

Before jumping into today’s episode, I have to share something we’re all excited about at Tearsheet: after two long years of pandemic, isolation, and general social weirdness – we are finally getting out of the screens and coming into the real world. Come September 15th, we’ll be holding our first in-person event in a long time, Tearsheet's Power of Payments Conference at Current, Chelsea Piers, NYC. 

We will bring together the top professionals and brands in the payments space to discuss the challenges and opportunities presented by an undeniable need to stay ahead of the curve of a rapidly changing landscape.

Without further ado: episode 14 of the Acquire Podcast. Last week we spoke about financial literacy, and how Stash – a personal investing app – is building and strengthening their brand through initiatives for literacy around personal finance starting as early as kindergarten and all the way into adulthood.

This week’s episode is about those consumers already into adulthood, now facing some big financial decisions and responsibilities. Those are, of course, the Millennials among us, myself included, who are on the brink of getting married, buying our first homes, and all the other totally not stressful things that come with finally admitting that we are, in fact, adults.

Today I have with me Erika White, VP marketing and communications at Affirm. Affirm is of course one of the prominent Buy Now Pay Later players today, making life’s big (necessary and not so necessary) purchases affordable across major brands from Walmart to Expedia to Neiman Marcus.

I invited Erika to speak to us about their most recent ad campaign, positioning Affirm is the go-to solution for Millennials during two pretty hilarious life situations – and about marketing BNPL at large. 

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The following excerpts have been edited for clarity.

The campaign is illustrating how things can and often do get out of control around life's big moments. And the idea is that Affirm is able to help people take charge through BNPL. 

We see two really fun video spots featuring relatable characters and relatable situations: life milestones like moving into a home and getting married. The spots use situational humor to really drive that point home. So first, we see a young woman planning her wedding; her mom thinks her wedding dress is too pricey, so she has her try on her old one, which is so horrendous that the young woman accidentally trips and falls into some blueberry pie. Affirm makes buying that dress of her dreams possible. 

The second spot is a young couple just moving into their first home, maybe without much of a budget left to furnish it right away. But to their dismay, they have a kooky next door neighbor who wears Speedo as a daily uniform while doing all types of daily activities. And with Affirm, again, this couple is able to buy the shades and blinds they clearly desperately need. So that's just a tiny bit about that. 

Erika, can you tell us about Affirm before this campaign? What gap in your marketing and brand were you looking to fill with these two narratives? What was the motivation of going this creative route?

I joined Affirm about three years ago. At that time, if you saw BNPL as an acronym, virtually no one would understand what you were talking about. And since then, the category has really just exploded. 

I would argue, to some extent, that the model of paying four payments, bi-weekly over six weeks has become commoditized – there are so many people offering it. It's really commonplace for so many things that you're looking for, whether it's a sweater, a blender, or even a smaller purchase than that (someone sent me an example of a sandwich this weekend, actually). 

As that commoditization occurs, differentiation is going to be incredibly important. And even more so than differentiation: distinction in the space. So how is Affirm distinguishing ourselves from all the other players in the space? 

We're really focusing on this idea of control. That's a feature or a feeling that we actually heard from our consumers when they use Affirm – the idea that they feel in control of their finances and their spending. Underlying that control, I think, is an idea of optionality. 

Compared to credit cards, where you're really locked into this 30 day schedule: you pay it off after 30 days, or don’t and you can end up getting hit with a late fee. But if you're just paying your minimum, you're going to revolve and revolve and revolve – and that can feel like a very out of control situation for consumers. 

Optionality underpinning that control was important not only to distinguish Affirm from credit cards, but also to distinguish ourselves from other players in the space who are bringing perhaps a more modern solution, but still using the same tricks and gimmicks that credit cards do, like late fees or compound interest.

We’ll get back to the idea of distinguishing BNPL from credit cards, which is an important point to explore from a branding perspective. But I’m first really curious about the ad spots, that really spoke to me as a Millennial and made me chuckle (which is a hard thing to do in the age of content) – can you tell us about the creative brainstorming that took place in order to bring this to fruition? 

Someone on our team frequently says that “advertising that's for everybody actually works for nobody”. I think that that really rings true – you have to really know who your target is, know as much about that consumer as possible, and then tailor your message for them, even if that means taking yourself out of it a bit. 

We looked at Millennials as a target audience for this work. We know that Millennials have a large appetite towards using buy now pay later. In a survey we did earlier this year, we found that nearly three fourths of Millennials wanted to use a pay-over-time solution like Affirm this year, and prefer it to a credit card. That insight on the audience was really important. 

Then we thought about what life moments we wanted to focus on; we saw that nearly a third of US consumers were planning a wedding this year, and we also found that more than a third were looking to furnish a new home or apartment this year, and that would cost at least $4,000. So pretty big and expensive life moments here. 

We pulled a lot of data together to ground ourselves in: Who is that consumer we're trying to reach? What's on their mind? And how can we help intersect their mindset right now? 

Were there any challenges or unexpected things that happened on the road to getting the campaign out there? Any surprises along the way?

We were on a really aggressive timeline. From when we decided we were going to do this campaign and briefed it, to when it was actually out in the world was less than 12 weeks, maybe even closer to 10. When you're on a roller coaster that's going that fast, you definitely have to be prepared for twists and turns. 

In general, the thing that surprised everybody was how great the humor came across in terms of the talent that we picked and how the director connected with that talent to really make these situations feel funny, but not so out of reach or out of touch for the average person.

Definitely, I personally enjoyed it a lot as a Millennial.

I appreciate that. Because you can do a lot of things that are funny, and funny is really subjective. But it's about how I can put myself in the situation and actually see myself having a similar reaction and a similar laugh to what these people are experiencing.

The ads are great and very consumer centric. What’s interesting to me though, and I've been thinking about this a lot (ever since you spoke at our Acquire Conference this past February); as a business, Affirm’s communication addresses both the consumer and the business. There's the B2C side we see in ads like these, and then there's the B2B, where you’re talking to commerce players like Amazon and Target.

I’m very curious, how do you manage a brand that is speaking in both these directions? What are the challenges in that? What does it take to succeed in being a household name for both the consumer and the retailer?

We are a network business. One side of the network has merchants, and we are looking to help those merchants grow; they're looking for ways to find new customers and sell more items, and we are a tool and a partner that can help them achieve growth. 

On the other side of the network you have consumers, and from what we can tell consumers are looking for better alternatives of ways to pay overtime, (better alternatives than credit cards, certainly), and ways to take control of their finances. I think that need is only becoming more acute right now given the macro and will continue to become more acute. 

So to your question about how we balance that, I think it's important to keep in mind that we can definitely meet a consumer where they are when they're shopping with a merchant, like Walmart, Target, or William Sonoma; but we can also meet them pretty directly through the Affirm app or unique products that we have like the Affirm debit card, which is in the process now – generating a flywheel effect. 

The first time you meet us, you might be buying a crib on Pottery Barn and say, ‘Hey, what’s this interesting thing that's going to allow me a better way to pay so that I feel like I have more control?’ But then after you try it, and ideally have a delightful experience (which we think you will, based on the product), then maybe you download the Affirm app; through that download, you start getting special offers, you learn that we're at even more merchants than you expected. Then maybe over time, instead of just coming across Affirm during your shopping journey, you're actually starting your shopping journey with us, and trying even more products in the Affirm ecosystem as a result. 

The idea you’re talking about, if I understand this correctly, is to iterate BNPL into something bigger than a nice-to-have feature at the end of an existing shopping experience, and actually embed BNPL as an obvious go-to choice in paying for almost anything. And that’s what Affirm’s debit card comes in to do?

It's a tool that's going to allow a consumer to use a piece of plastic, a debit card, to actually choose in the course of making a transaction: Do I want to debit this right away? Or do I want to split this up and pay for it over time? We think that will make the behavior of paying overtime even more mainstream, and actually bring Affirm top of mind for consumers more often. So again there’s this flywheel effect that we're trying to create. 

From a marketing perspective, what that means is mirroring that strategy and doing really strong partner marketing, figuring out ways to work with our merchant partners to meet the consumer together, and leverage the great brands they have to introduce Affirm for the first time; but also working as a standalone consumer brand, and finding new products and ways to add value to the consumer so that if they start their shopping journey with Affirm, we're educating them on comprehension of benefits and giving them the tools that they want and need.

Speaking of cards, this is a good time to bring us back around to the topic of marketing BNPL in opposition to credit cards. A lot of BNPL’s target audience is young people, Millennials and Gen Zers. A lot of us young people have grown up pretty credit card averse from having seen first hand the consequence of credit card debt on our elders and even ourselves. 

BNPL is an appealing alternative because it doesn’t follow the traditional credit pay-off model of 30 day cycles, and some players like Affirm make it a point to be transparent and offer no late fees. Still, there are more than a few BNPL critics out there who liken BNPL to credit in disguise, calling it another way to get people to spend beyond their means. There’s a tension there – how do you deal with this as one of the biggest BNPL players in the space?

I’m glad you asked the question, because I think that there's a lot of misunderstanding out there and misinformation. I think that underlying that is a lumping of all of BNPL together, versus taking the time to understand each player distinctly and how they choose to extend consumer spending power. 

With that understanding, it becomes pretty clear that this isn't this isn't a one size fits all type of solution. BNPL is not all the same thing. It really matters who you choose at checkout, and it really matters what that provider is about – how they're making money and how they treat the consumer. 

Fundamentally, one thing that makes Affirm really different is that we actually do our own underwriting. That might not sound super exciting to a consumer, but it matters, because it gives us an indication of whether you are taking out a loan that you can afford to pay back and that we believe will be paid back. We will not extend a loan and actually turn it down.

If a consumer gets themselves in trouble with a loan and can't pay us, we don't profit from that situation. It is entirely in our interest to only extend loans that we believe are right for consumers, and that can be paid back on. This is an important point, because this rhetoric is not necessarily true across the industry.

BNPL is not new on the scene anymore but it’s certainly still becoming, and there are better providers than others, as with everything else. 

To bring it back to the marketing perspective, how does Affirm distinguish itself from both other BNPL players and credit cards in this regard? What kind of work are you doing to educate consumers about how you’re different from others? How much of that work are you able to do when so many consumers meet you for the first time as a logo at checkout?

The most important message that I would like any consumer to know when they see the Affirm logo is ‘we are on your side’ – we are on the side of the consumer, we are not going to do anything to trick you, we are ‘gotcha’ free, and you can trust us. And I hope we continue to earn and grow that trust over time. 

Fundamentally, money is so personal. There are a few things in our life that are more precious than our time and our money, and you really have to spend both well and smartly. But money is also just such a source of anxiety for people. 

We surveyed consumers earlier this year, and found the average American worries about money six times a day, and Millennials were even more than that: about seven times a day. Although money is a precious, important, and personal thing to us, it's also a major source of anxiety. So you really have to trust who you are spending your time and spending your money with. I hope that's what people recognize when they first see Affirm, but I also hope that it's something that we have the right to earn and grow over time as well.

On that point, we can come back around to the ad campaign as a means to earn and grow that trust, by understanding your consumer’s worries and needs. The campaign was launched back in April 2022 – where would we have seen the ads? And can you share anything about the performance so far?

It's primarily running in the Amazon advertising ecosystem; we are the exclusive BNPL provider on Amazon, so we have the opportunity to reach the gajillions of Amazon consumers who we haven't yet reached, or who already know Affirm for that matter. 

And as an extension of seeing these videos, we also have display banners running on Amazon.com and off site driving back to the Amazon.com/affirm landing page. So a lot is happening in the Amazon ecosystem, because we feel like there's a really ripe audience there, especially since we're the exclusive provider. 

In terms of how it's doing, the quantitative results are still rolling in, so not a ton of details to share around those for the purposes of today. But I can tell you we've gotten some good qualitative feedback from consumers, because we actually surveyed consumers who had exposure to the ad versus those who didn't. What we found was that this work really increased brand relatability. That was particularly true for the wedding dress spot, and particularly true among Millennials. Those who were exposed to the work actually found Affirm’s brand more relatable than those who weren't. That's a really important ingredient in increasing that distinction we talked about earlier, because you can't really distinguish yourself if people don't have that relatability and that trust point. So we were happy to see that qualitative data come back.

Relatability is really the best thing that you can hope for as a brand these days. It's exciting to hear that it's been doing well, and I'm looking forward to hopefully catching up with you a couple months down the line and seeing where it went.

Before we wrap up, I just want to thank you again, Erika, for speaking with us. It was a pleasure having you at our Acquire Conference back in February and it’s a pleasure once again having you share your experience with our audience. You lead a pretty important team at Affirm, and you do it well. What keeps you grounded day to day? Do you have an inspirational post-it you keep on your desktop, or some kind of motto that guides your daily hustle?

My team is what keeps me grounded day to day; they challenge me, they help me focus, and they make me better. At the risk of embarrassing them and myself, I'll throw out one of them. Something I do say pretty frequently is: ‘it's aggressive, but not impossible.’ 

A lot of the great things my team has accomplished at Affirm, and that I've accomplished with teams everywhere, very few people thought were possible. That was either because of resource constraints, or timing constraints, or was just an off the wall idea. But it's been really rewarding to see people come together and unite to work really hard to achieve something that they thought wasn't possible and realized that it was, in fact, just really aggressive to get it done.