Name: Customer-led-growth: Why do banks and fintechs need to think about it?
Uploaded: 2023-06-12T12:16:14.495Z
Duration: 330.76
Description: *This content is sponsored by Extole.* Matthew Roche, CEO, Extole, explains the idea of customer-led-growth and talks about the importance of referral marketing in customer engagement and retention. Stay up to date with the community on https://finovate.com/ Find out more about FinovateSpring on http://www.finovatespring.com/

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Matthew Roche.vtt

English

{{00:00:05}}
Greg Palmer: Hey, Greg Palmer here.

{{00:00:06}}
Coming to you from FinovateSpring 2023.

{{00:00:09}}
I'm joined now by Matt
Roche, C E O of Extole.

{{00:00:11}}
Matt, thanks for taking the
time to connect with me.

{{00:00:13}}
Really a pleasure.

{{00:00:14}}
Thank you.

{{00:00:15}}
Let's start with the idea Extole is
promoting the idea of customer led growth.

{{00:00:19}}
Can you give us just a high level
overview of what exactly that is?

{{00:00:22}}
To kick things off?

{{00:00:23}}
Matthew Roche: Customer led growth is,
Making all of your marketing center

{{00:00:28}}
at its primary core at the customer.

{{00:00:30}}
So instead of saying as opposed to
like media led growth, which is really,

{{00:00:34}}
I'm talking to Google and Facebook and
they're doing my marketing, and then I'm

{{00:00:37}}
catching it and doing what I can, what
I'm saying is it starts with the customer.

{{00:00:42}}
Sure.

{{00:00:42}}
So at its core it's things like referral
and advocacy ambassadors, but it's also

{{00:00:47}}
anything that you can do to get the
customer to build awareness of your brand,

{{00:00:51}}
increase their spend with the brand,
increase their loyalty of the brand.

{{00:00:54}}
Greg Palmer: So how different is
this from what FinTech firms are

{{00:00:57}}
doing now and, why is this something
that they should be prioritizing

{{00:01:00}}
over some of the other channels?

{{00:01:02}}
Matthew Roche: This is
a fantastic question.

{{00:01:04}}
You should prioritize customer led growth
if you want a better customer base.

{{00:01:08}}
Very straightforward question is
what's a better customer base?

{{00:01:11}}
Sure.

{{00:01:11}}
So a better customer base, you
could call it customer quality.

{{00:01:14}}
It is one that stays around, that
talks nicely about you, that when Peter

{{00:01:19}}
Thiel does a tweet, doesn't leave.

{{00:01:21}}
It's people who care about you and
who have some attachment to the brand.

{{00:01:25}}
And so if you wanna hire
quality, you really have to

{{00:01:27}}
say what, types of channels.

{{00:01:30}}
Bring in customers that behave in the way
we believe our customers should behave.

{{00:01:34}}
And if we do it right, we get longer
tenure, we get more products, we get

{{00:01:38}}
more spend, more usage altogether,
just a higher quality customer.

{{00:01:42}}
Greg Palmer: Yeah.

{{00:01:42}}
So one of the questions that
we get anytime we're talking

{{00:01:44}}
about a new way of thinking that
you always will get pushback.

{{00:01:46}}
Why now?

{{00:01:47}}
Why is this moment the right time to be
thinking along these lines and focusing

{{00:01:51}}
on this customer led growth strategy?

{{00:01:52}}
Matthew Roche: There is so
much volatility right now.

{{00:01:55}}
A little bit of is due to the events of.

{{00:01:57}}
The first quarter, which
kind of threw everybody off.

{{00:02:00}}
Yeah.

{{00:02:00}}
But there's a lot of volatility.

{{00:02:01}}
There's a lot of accounts up for grabs.

{{00:02:03}}
So there's two things you
should be thinking about.

{{00:02:04}}
One is, how do I keep mine?

{{00:02:06}}
Exactly.

{{00:02:06}}
And the other is, how do I get theirs?

{{00:02:08}}
And so the natural response is
gonna be I gotta really pump up my

{{00:02:11}}
Facebook or my Google spend, except
right now they're at historic highs.

{{00:02:15}}
And so the cost for
requisition is staggering.

{{00:02:18}}
And.

{{00:02:18}}
For relatively unloyal customers.

{{00:02:20}}
So if I can come to you and say, I
can bring you in, new customers that

{{00:02:23}}
will stay longer and will bring in new
customers, seems a no-brainer for today.

{{00:02:27}}
Greg Palmer: Yeah.

{{00:02:27}}
It's always a good time for more
customers, but especially in this moment.

{{00:02:31}}
You're absolutely right.

{{00:02:32}}
So the other thing that I'm sure
you've been getting a lot of this room,

{{00:02:36}}
this community is all about the KPIs.

{{00:02:38}}
What are some of the metrics you can
point to that really say yes, this

{{00:02:41}}
is successful when it's done well,

{{00:02:43}}
Matthew Roche: I think it's fantastic.

{{00:02:44}}
At its heart, you wanna be looking at
what percentage of your customer base came

{{00:02:48}}
in through what I would say truly earned
customers and a truly earned customer to

{{00:02:53}}
me is one that came from another customer.

{{00:02:55}}
Sure.

{{00:02:56}}
So you first, you say, what percent
of my customer bases that way?

{{00:02:58}}
Cuz they're the ones who are gonna
stay the longest and they're the

{{00:02:59}}
ones that are gonna advocate.

{{00:03:01}}
And my guess is almost
all the customers did.

{{00:03:03}}
Sure.

{{00:03:03}}
For all your advertising, almost
everybody came because their mother, their

{{00:03:06}}
sister, their brother, their coworker.

{{00:03:08}}
What you wanna do is
motivate that behavior.

{{00:03:10}}
The second is, What percentage
of your customer base is

{{00:03:13}}
participating in these programs?

{{00:03:15}}
So are people just sitting
back and they're a customer

{{00:03:18}}
but maybe they transact?

{{00:03:20}}
They, use their, cards.

{{00:03:22}}
They make payments, but really their
standoff or are they actually doing things

{{00:03:26}}
and what percentage of your customer
base and the higher the percentages,

{{00:03:28}}
the longer term they're gonna be.

{{00:03:29}}
So those are the two
that I really focus on.

{{00:03:32}}
Then it's just a funnel.

{{00:03:34}}
Greg Palmer: Yeah.

{{00:03:35}}
Yeah.

{{00:03:35}}
You talked about something earlier
that want to come back to the idea

{{00:03:37}}
of customer retention and why.

{{00:03:39}}
That's obviously such a crucial thing.

{{00:03:40}}
Everybody's focused on keeping
what they have at this moment.

{{00:03:43}}
Could you talk a little bit
about that side of the equation

{{00:03:46}}
from the Extole standpoint?

{{00:03:48}}
Matthew Roche: It's fascinating.

{{00:03:48}}
The, we did this study with one of our
customers, I can't name, but they're one

{{00:03:52}}
of the largest credit card providers.

{{00:03:55}}
And what they did is they looked
at, participants and the people who

{{00:03:59}}
were brought in through the comms,
through the programs, participants and

{{00:04:02}}
friends, and they did a long-term study
on how long they stayed, et cetera.

{{00:04:06}}
And what they found is that anybody who
participated, whether they were the one

{{00:04:09}}
who was advocating or ones coming in,
stayed longer than every other channel.

{{00:04:13}}
Wow.

{{00:04:14}}
And 15 to 20% longer.

{{00:04:16}}
So you saw that, people really said
this, I need to they, immediately

{{00:04:20}}
said, we gotta put more money into
this, because that is long-term value.

{{00:04:24}}
And in long-term value, I guess
the way I would say it is how

{{00:04:26}}
you enter is how you leave.

{{00:04:28}}
And so the way you acquire the
customer, in a lot of ways, sets the

{{00:04:31}}
stage for how long they're gonna stay.

{{00:04:33}}
And we think, oh no, Long-term
value is about giving great

{{00:04:36}}
service and giving and it is Sure.

{{00:04:38}}
And not screwing up.

{{00:04:40}}
But it's also about bringing someone in,
a manner where they feel close to you and

{{00:04:45}}
where they feel a sense of relationship.

{{00:04:46}}
Greg Palmer: Cool.

{{00:04:46}}
Last question for you.

{{00:04:48}}
Obviously you talked about
a credit card issuer.

{{00:04:49}}
Who really is your target market for this?

{{00:04:52}}
Who are you hoping to, connect with
and who should be reaching out to you?

{{00:04:55}}
Matthew Roche: We want financial
service customers that want more

{{00:04:58}}
customers and want better customers.

{{00:05:00}}
Literally, the only people we can't
work with are people in the investment

{{00:05:04}}
management and wealth management simply
because of the legal requirements on it.

{{00:05:07}}
But anyone else, we work with bank,
with brokerage, with credit cards,

{{00:05:10}}
with payments, with children's credit
cards across the board, and in every

{{00:05:16}}
case we see higher acquisition,
higher quality across the board.

{{00:05:19}}
Greg Palmer: Excellent.

{{00:05:20}}
Thanks again for taking the time.

{{00:05:21}}
Again, I'm Greg Palmer.

{{00:05:22}}
This is Matt Roche.

{{00:05:23}}
Been a real pleasure.

{{00:05:24}}
Matthew Roche: Cheers so much.

I'm joined now by Matt
Roche, C E O of Extole.

Matt, thanks for taking the
time to connect with me.

Let's start with the idea Extole is
promoting the idea of customer led growth.

Can you give us just a high level
overview of what exactly that is?

Matthew Roche: Customer led growth is,
Making all of your marketing center

So instead of saying as opposed to
like media led growth, which is really,

I'm talking to Google and Facebook and
they're doing my marketing, and then I'm

catching it and doing what I can, what
I'm saying is it starts with the customer.

So at its core it's things like referral
and advocacy ambassadors, but it's also

anything that you can do to get the
customer to build awareness of your brand,

increase their spend with the brand,
increase their loyalty of the brand.

Greg Palmer: So how different is
this from what FinTech firms are

doing now and, why is this something
that they should be prioritizing

Matthew Roche: This is
a fantastic question.

You should prioritize customer led growth
if you want a better customer base.

Very straightforward question is
what's a better customer base?

So a better customer base, you
could call it customer quality.

It is one that stays around, that
talks nicely about you, that when Peter

It's people who care about you and
who have some attachment to the brand.

And so if you wanna hire
quality, you really have to

Bring in customers that behave in the way
we believe our customers should behave.

And if we do it right, we get longer
tenure, we get more products, we get

more spend, more usage altogether,
just a higher quality customer.

So one of the questions that
we get anytime we're talking

about a new way of thinking that
you always will get pushback.

Why is this moment the right time to be
thinking along these lines and focusing

Matthew Roche: There is so
much volatility right now.

The first quarter, which
kind of threw everybody off.

So there's two things you
should be thinking about.

And so the natural response is
gonna be I gotta really pump up my

Facebook or my Google spend, except
right now they're at historic highs.

And so the cost for
requisition is staggering.

So if I can come to you and say, I
can bring you in, new customers that

will stay longer and will bring in new
customers, seems a no-brainer for today.

It's always a good time for more
customers, but especially in this moment.

So the other thing that I'm sure
you've been getting a lot of this room,

What are some of the metrics you can
point to that really say yes, this

At its heart, you wanna be looking at
what percentage of your customer base came

in through what I would say truly earned
customers and a truly earned customer to

me is one that came from another customer.

So you first, you say, what percent
of my customer bases that way?

Cuz they're the ones who are gonna
stay the longest and they're the

And my guess is almost
all the customers did.

For all your advertising, almost
everybody came because their mother, their

What you wanna do is
motivate that behavior.

The second is, What percentage
of your customer base is

So are people just sitting
back and they're a customer

They make payments, but really their
standoff or are they actually doing things

and what percentage of your customer
base and the higher the percentages,

So those are the two
that I really focus on.

You talked about something earlier
that want to come back to the idea

Everybody's focused on keeping
what they have at this moment.

Could you talk a little bit
about that side of the equation

The, we did this study with one of our
customers, I can't name, but they're one

And what they did is they looked
at, participants and the people who

were brought in through the comms,
through the programs, participants and

FinovateSpring

Explainer

*This content is sponsored by Extole.*

Matthew Roche, CEO, Extole, explains the idea of customer-led-growth and talks about the importance of referral marketing in customer engagement and retention. 

Stay up to date with the community on https://finovate.com/ 

Find out more about FinovateSpring on http://www.finovatespring.com/ 