It’s marketing time again — for these types of episodes, we invite in a marketing professional who’s knee-deep in growing his or her business, bringing in the next cohort of customers and building a big company.
Today’s guest is Carl Gish, chief marketing officer at Varo Money. Carl hails from a consumer goods background and is charged with bringing in new customers, as well as retaining existing clients of the challenger bank. As Varo recently closed a big round of funding and was awarded a rare U.S. banking license, I talk to Carl about his strategy for growing the bank and how having a new banking license will help to differentiate Varo’s brand from a sea of similar startup banks.
The following excerpts were edited for clarity.
Bringing a consumer goods perspective to bank marketing
There are practices and disciplines — from businesses that are more competitive in terms of switching costs and the ability for consumers to choose brands and products — that end up creating a more customer-centric and service-oriented approach. We can all agree that banking could use more of this.
There are pros and cons to people coming into bank marketing without any experience in the field. The cons are that you have to learn the ropes, you have to learn about regulation and the constraints that don’t exist in categories outside of finance. The pros are the competitiveness and customer centricity that I’ve been exposed to in companies like Amazon and Unilever. There’s a real focus on consumer needs and insights about what consumers want and how to improve products and services that deliver on these needs — this is a discipline that is very relevant to banking and financial services, in general.
Everything from the savings rate you offer consumers on an account to how easy it is to open an account to how you can make it easy for consumers to do the right thing — that’s really Varo’s mission. We want to make it easy for consumers to do the smart thing with their money by removing costs and friction from the banking experience.
Building a new challenger bank
Marketing’s mandate at Varo is to drive growth and retention of customers. That’s a broad mandate and fundamentally, it’s about building Varo into a well-loved and well-known brand for consumers. Arguably, doing that in retail banking is a bit of an oxymoron. It’s no secret that there’s a fair amount of distrust consumers have towards retail banks that was exacerbated during our last recession.
This distrust continues to manifest itself continuously in things like the interest rate banks offer their customers. The average interest rate is something like seven basis points right now for a savings account. The Fed Funds Rate is significantly higher than that and many banks have chosen not to pass this through to the end customer. For a bunch a reasons, survey after survey show that NPS and other measures of trust rank low comparatively to other industries.
Our aspiration is to build a bank that people have affinity for and that people would recommend to their friends and families with the feeling that the bank is in it with them. Traditional marketing can bring a lot to the table.
Varo’s marketing and channel mix
It’s still early days for us. We’ve been marketing Varo for about a year. We’ve been seeing success across a lot of channels. Ultimately, what’s most important is to be where our customers and prospective customers can discover and learn about us. We experiment and learn a lot.
We’re positioning Varo across a lot of different channels: from social media to paid advertising and digital channels. We’ve also done some out of home and offline advertising. What’s interesting is that organic and word of mouth has been growing consistently for us for the past six to eight months. This is probably the best measure of success and marketing channel we can leverage. That comes from a product that’s meeting consumer needs and that customers feel an affinity for.
We still have a long way to go in terms of the products and services we want to launch and offer, but what’s encouraging is one of our best channels is organic acquisition in Apple’s iOS store. People discover us because of our ranking and reviews — we’re still only on iOS. We’re in beta on Android. When we launch Android and Web, that will give us even a bigger footprint for people to discover us. We expect that organic, that word of mouth to continue to expand.