Exploring Monzo's Year

Does Christmas arrive too soon or is a pointless present being given? This time I'm examining Monzo's Spotify Wrapped-style feature. I'll be exploring how they exploited this as an effective tool in their expansion and will touch upon a few aspects that could be worked on. It's undeniable that Spotify Wrapped has had a major effect on the tech world. Spotify may not have been the first to attempt a Year in Review (Forbes states that Facebook was first in 2014), but clearly theirs is the most successful. Just like ChatGPT ushered in a new era of models, Spotify Wrapped has become so popular that many companies have tried to replicate it. Monzo has recently released their Year in Monzo, and though it's still too early to tell whether or not it has been successful, the surge in both articles and online activity in the first 24 hours suggests that it has made a mark. This isn't the first time Monzo has done such a thing; they tried a few years ago (Source: Monzo), but it fell through. This time around, we can see why the Year in Monzo is a strategic fit for them and how they've improved upon their past attempt. Monzo is one of my top picks for product companies, and they rarely err in their endeavours. Today's article won't be delving into the details of their successes, but I will touch upon their approach to creating products. Here is a quick overview of my thoughts on this: Monzo don't look to become your sole bank, rather, they aspire to be your primary bank. Thanks to open banking, they have made it effortless for you to view all of your financial dealings from other banks in the Monzo app. Monzo have recently added Monzo Flex (credit card) and Monzo Investments and are expected to soon release a pensions and home ownership product (believed to be mortgages). Monzo are actively hiring product roles for these specific domains, but as of yet these have not been rolled out. With Monzo as your primary bank, you will likely use them for their other services and make Monzo the focus of your financial life. This allows Monzo to expand their customer base. Monzo's product-led approach can be described as a work of art. For several years, it began with an invitation system whereby customers would receive a reward of £10 or £5 for referring a friend. The product-led growth strategy has developed to now focus on expansion. A significant area of the app is utilised to encourage customers to utilise additional services, including investing through Monzo. I will not mention each and every case of product-led growth, however a great many of their features include PLG. One of my favourites is how simple it is to ask your buddies for payment. These requests could be a means of product-led acquisition (someone who does not use the app already signs up), product-led engagement (a user who already has the app comes back) or product-led marketing (someone unfamiliar with Monzo is shown it). This point is essential in making Monzo's strategy successful. Its focus on fun helps to ensure that users stay engaged daily and want Monzo to be their go-to bank. Having users spending a lot of time in the Monzo app provides ample opportunity for them to showcase and market their other financial products. This has made Monzo unique and is the driving force of their strategy's various components. This is a current fashion, however not every product should follow this trend willy-nilly as it is not proper for certain applications. Products that are intended for daily or weekly use are ideal for summarising yearly data. However, if the product is used on a monthly or even quarterly basis, there is probably not much to report. The key takeaway is that cost does not necessarily scale directly with usage. With services such as Spotify and Strava, the more you use them, the more you get out of them, yet you are not charged any extra. Even though lots of products will provide greater value the more they are used, they rarely have a strictly linear value/usage pattern. In most cases, continuous usage will decrease the value of the product, or even render it useless. Two good examples to consider are Medium and Instagram. For me, the more I use Medium, the more articles I access and the more value I gain from it for the same cost. With Instagram, you may think that you experience more satisfaction by spending extended periods of time on the app, but does that really equate to 8 times more entertainment than spending just half an hour a day? I don't believe it does. I’ll again refer to Spotify and Strava. These demonstrate that the social component of a product is not always its focal point, yet must still be present in order for a wrap up to be effective as a shareable element. If users have never shared anything from the app before, the likelihood of them suddenly doing so solely because of a year wrap up is slim. Considering the information mentioned before, let us contemplate how Monzo can be a suitable product. Making and managing spending is something people do on a regular basis, and Monzo employ techniques that make using their application entertaining to induce such behavior. We need to be aware that it is not necessarily the case that the greater the amount of money spent via Monzo, the more value a person can gain from the service. Rather, for any given spending pattern, the more of their behaviour that is represented in Monzo, the more effective use of the app they can make. For instance, the Trends feature is a great example of this; the more of a customer's expenditure that is visible, the more value they can take from using the app as it offers the most accurate representation of their transactions. This is true up and down the scale, whether their spending habits increase or decrease. Monzo has a social aspect to it, although not in the same way that Strava does. It can still be very helpful when it comes to making purchases or overseeing finances together. In many ways, it is as social as finance can get. It is impossible for me to state what went wrong during Monzo's preceding attempt to execute a wrap up, but I can make some assumptions about why it probably will be very successful this effort. To start, I'd like to discuss a few things that I believe they have implemented correctly: I've noticed lately that some of these summaries just blend together all of the data and present it as an insight. While Monzo have done this to add some extra information (not all insights have to be original), usually the Review displays to you insights that you wouldn't know yourself. Monzo stands out from other banks with its cheeky and provocative marketing. The product strategy cleverly draws on its own unique strengths. The image displayed embodies the essence of Monzo and is sure to raise some eyebrows (not in a negative sense). It begs the question whether one would be proud to be in the top 10% of KFC customers? Monzo likely knows the answer. Acquisition cycles can normally be divided into four groups: viral, paid, and content. I won't go into the paid and sales cycles now, as these depend more on advertisement efforts and sales strategies, as opposed to the user-driven loops of viral and content cycles. For example, Monzo has a wide variety of viral cycles, which can be found here: Motivated — Example being the referral bonus for inviting a friend to Monzo. It is a safe bet that many individuals have registered for Monzo on the basis of a suggestion from someone they know. I opted for the organic option when I registered with Monzo in order to set up a shared tab for my housemates and I so that we could keep track of our house payments. My friends' encouragement and the incentive motivated me to join and create a strong acquisition strategy through the combination of incentivizing and organic loops. My particular instance had the added bonus of a reward upon registration, making it a double victory. The purpose of sharing this is to illustrate that Monzo already have functioning viral and paid acquisition loops. The area which could be improved is content loops. Content can be divided into two categories: user generated content (UGC) and company generated content (CGC). Both types of content can be distributed by either the user or the company, thus forming 4 separate variations, for instance, user generated, company distributed. UGC is not really a suitable option for Monzo, therefore they have opted for CGC in order to build the new acquisition loop. Monzo trialled a 2022 edition of their Year in Review using internally-generated and distributed content last year. It seems that this could be a precursor to the 2021 Year in Review. Monzo produced the content and shared it via their social media platforms. Unfortunately, I can’t locate any images, however it did showcase interesting insights into spending behaviour among their users. The reach of company generated content is usually limited to its own social network. By comparison, when a user shares the same content, it extends to their own social graph. For example, Monzo created content that was distributed to each user and, through the use of controversy, it was probably shared widely on social media and with friends. This was a rather lengthy explanation of Monzo's intention to create a new acquisition route, with the addition of company created user shared content being a great addition to their growth strategy. A couple of opportunities come to mind that might be able to be improved. As I am not in the position to propose any great alterations, I have decided to focus on a few small optimisations related to what Monzo has done well and their general plan. The commotion they have stirred up is sure to cause conflicting views, but overall I reckon Monzo nailed it. As previously illustrated by the KFC situation, their manipulations are humorous. It may not be something people wish to discover, but when they do, it's a guaranteed shareable on social media. The example above doesn't evoke the same reaction. Although it has been posted on social media, there is much more negative sentiment. I would recommend avoiding any associations with the current political climate in the UK. When discussing the cost of living crisis, it’s important to keep in line with Monzo's prior statements on the matter (Source: Monzo). The Review made good use of the Monzo brand, but this insight was not quite on-brand. My Review only seemed to use information from my Monzo account. I can check all of my expenditures for my other cards, including Starling and American Express, in the Monzo app, but they weren't included in my Review. It's probably for legal or regulatory reasons, but if my financial data is usable in Monzo, it's strange that it can't be utilized in the Review. Perhaps some tech-savvy people out there could provide more insight on this! The shortcoming of not leveraging all available info means that the insights gleaned are not completely reliable. Some of the details Monzo shared with me regarding my spending behavior are not accurate; they are just related to the transactions I made using Monzo. Note that Monzo wants to be your primary bank, not the only bank you use. Assuming there are no legal/regulatory issues, my suspicion is that Monzo opted to utilize Monzo-exclusive data to encourage more spending prior to the upcoming Review. In my opinion, this is more of a tactic to deepen Monzo usage, whereas the Review would more likely be more useful for acquisition purposes. I definitely consider the annual wrap ups to be enjoyable. It's true that some firms might decide to do them for the promotional publicity; if that's the case, I'm in full support. I would like to express a enthusiastic thank you to Reforge. Most of what I have been learning about growth in the last year has come from their courses. I highly recommend them.

Source: https://medium.com/@imperfectproduct/unwrapping-the-year-in-monzo-f5adf49b65f4?source=rss------fintech-5