The banking industry is going through the greatest disruption in a generation as customers seek to redefine their relationship with banks and gain more control over their financial future.
Large incumbent banks have failed to adapt to this changing trend and are now under threat from new challenger banks which are agile enough to provide an excellent customer experience, greater convenience and radical transparency to attract new customers.
One of the most prominent and well known challenger brands is Monzo. Founded in 2015, it has developed a mutually beneficial customer relationship based on transparency and collaboration to build a bank with over 4.2 million customers.
”We’re trying to take a generational leap forward in terms of the product and functionality. All of those painful things you have to do in your life with your money that you wish you didn’t have to think about—we just make them work.Tom BlomfieldMonzo CEO
How did Monzo build a community of engaged advocates?
One main reason why Monzo has been able to build a brand that people love is by having meaningful customer engagement in every level of decision making. Customers love being heard, and Monzo has taken this a step further by involving them in the co-creation process.
Monzo has provided a community forum where customers can discuss everything from app ideas and budgeting tips to issues which affect their day-to-day lives. Monzo engages their opinions on new product features and listens to their feedback when it falls short of expectations.
This community ensures that customers feel part of an inclusive environment where everyone can speak and be heard, regardless of their background, location or interests. This has created such an affinity between the brand and its customers that 80% of Monzo’s new customer acquisitions are referred by existing patrons.
”The goal is broadly to get to a stage where customers are referring their friends because they love the product and feel like they’re a part of the mission — you need to take customers away from being ‘standard customers’ to being advocates who are feeling like they’re part of it.Tristan ThomasMonzo Head of Marketing
How does Monzo collaborate with its loyal customers?
Monzo insists upon meaningful engagement with its audience, based on authenticity and trust, to tackle issues affecting its community and wider customer base.
Online and physical events which bring together customers, industry experts, and charities with first-hand experience, help Monzo to better understand and support its customers in need.
For example Monzo collaborated with its customers to develop a set of product features called gambling blocks which tackle gambling and mental health issues by identifying customers who need extra support and helping them to develop responsible financial habits.
The company went further in its early years by trusting its customers with rebranding from Mondo to Monzo. When asked to suggest a new name for the bank, over 12,000 responses were received from more than 10,000 customers. Sure enough, six of these proposed the name Monzo, and the rest is history.
Similarly, rather than hiring a marketing consultant to consider how best to boost its Trust Pilot score from four five stars, Monzo issued a call to arms to its loyal community, who successfully upgraded its rating in just 45 minutes after stagnating for years.
The ultimate expression of customer empowerment was when Monzo sought inward investment from customers by inviting them to join in its investment rounds. In 2019 Monzo managed to raise £20 million in just three hours after 36,006 advocates pushed its valuation to more than £2 billion.
How does Monzo recognise and reward its advocates?
Monzo recognises the most active members of its community through its community leaders programme called the Coral Crew. The leadership programme empowers advocates to lead and moderate discussions within the community and also become ambassadors for the wider customer-base.
In return for their hard work, members are rewarded with special badges and titles in the community, automatic entry to all monzo events, access to the key Slack channels where they can communicate directly to Monzo employees, and last but not least exclusive Monzo swag such as branded t-shirts.
What can we learn from Monzo?
Monzo has continued to dominate the challenger banks space, outperforming competitors by 50% through brand advocacy. This has undoubtedly had benefits for every aspect of the business, allowing the brand to build better products, super-charge its growth, achieve amazing customer engagement and massively boost its reputation.
As the world starts to wake up in a new reality of customer engagement post Covid-19, brands can learn from Monzo’s blueprint for success by adopting customer-centric approaches to engage with their communities. This will build deeper, meaningful relationships with their community that go beyond day-to-day transactions.
By following the model developed by Monzo, brands can reach a point where their reputation outgrows their product, while simultaneously nurturing and growing the company.