How WISE Leverages Word of Mouth to drive its Business?
70% of WISE users come from world of mouth
In my web3 payment research, I stumbled across WISE. What caught my attention is the mind-blowing fact that around 70% of their users come from word of mouth. This got me intrigued, prompting me to delve deeper into WISE's growth strategies.
Check out these impressive metrics:
Monthly transaction volume: $12 billion
Growth rate: 30-40% YoY
Average pricing: Just 0.65% across all routes
Profitability: Boasting an impressive EBITDA margin of 20%
Customer acquisition: Adding a whopping 1 million customers per quarter, with a total of 16 million customers and 10 million active users
How to know 70% of growth coming from world of mouth?
WISE utilizes an attribution model that overlays referrer data and cookie data from website visits, enabling them to gain insights into the origin of their traffic. To understand how customers discovered WISE, a seamless prompt is integrated into the user experience, asking users about their source of discovery. By overlaying the survey data with direct traffic data, WISE has determined that approximately 70% of their customers reported discovering the company through this method.
Why focus world of mouth?
Emotional connection: Beyond the rational reasons for recommending a product, there are emotional reasons tied to a company's mission or brand.
Trust: Cross-border payments involve transferring significant amounts of money across countries. Trust is paramount. When existing users recommend a service, it carries more weight than traditional advertisements.
Commodity Nature of Cross-Border Payment: As cross-border payments become a commodity, differentiation narrows to price and user experience. With high distribution costs and tight margins, word of mouth stands out as a crucial, cost-effective marketing channel in this competitive space
Unlocking the Driving Force: WISE Harnesses NPS to Enhance Word-of-Mouth
Focus on NPS Comments: WISE places a significant emphasis on the comments of the NPS survey, not just the scores. This helps them understand the reasons behind the scores and the specific attributes or experiences that lead to high or low scores.
Overlaying Referral Data with NPS Data: Wise overlays their referral data with NPS survey data. They have observed patterns, such as significantly low invite rates for scores ranging from one to six. However, as scores increase, the number of users referring WISE to others also increases. For example, moving from scores of six to seven and eight doubles the number of referrals, and this trend continues with higher scores.
Identify Key Attributes: By talking to customers and analyzing survey results, WISE identified key attributes that customers value, such as price, speed, and ease of use. These attributes consistently emerged as drivers of high NPS scores and, consequently, word of mouth.
Continuous Feedback Loop: Wise maintains a continuous feedback loop with their customers. They regularly talk to them and analyze survey results to refine their understanding of what drives word of mouth.
How did WISE make it 10x cheaper?
Understanding Costs: Wise breaks down their costs into three primary categories: people costs, the cost of risk (realized risk), and partner fees.
Risk Management: One of the risks Wise faces is FX risk. When customers lock in a rate on WISe but transfer the money a few days later, the rate could move against Wise, leading to potential losses. They've managed to halve this cost over the years through understanding product exposure and implementing algorithms.
People and Partner Costs: Wise has focused on reducing both people and partner costs. When Wise entered the Singapore market, they faced a regulatory mandate for face-to-face customer verification. In response, they set up a physical office for this purpose. However, leveraging customer dissatisfaction with this cumbersome process, WISE lobbied the Singaporean government and successfully obtained the world's first EKYC (Electronic Know Your Customer) license. This allowed customers to verify their identity by taking a selfie and a picture of their ID, eliminating the need for physical verification.
Working Backwards from the Ideal: Instead of making incremental improvements, Wise asks fundamental questions like what the theoretical minimum cost for moving money into a market is or what the theoretical maximum speed is. They aim to achieve these ideals rather than just making small improvements.
How to build culture to optimize the World of Mouth Strategy?
Authenticity and Passion: The founders of WISE were genuinely upset about the high costs of transferring money. This authenticity and passion for solving the problem resonated throughout the company. Many employees at WISE have personally experienced the challenges of international money transfers, making them more invested in the mission.
Challenging the Status Quo: The culture at WISE encourages teams to tackle hard and new challenges. They are incentivized to do the hard things, and this is what's rewarded. This mindset of not settling for minor improvements but striving for groundbreaking changes drives innovation and creates remarkable products that customers naturally talk about.
Rude Awakening for New Joiners: New employees often experience a "rude awakening" when they join WISE. They quickly realize that the company's culture isn't about making minor tweaks or playing around with existing systems. Instead, they're expected to dive deep into significant challenges and come up with innovative solutions.
Boosting Word of Mouth: Key Tips for Startups
Seamless feedback loop: WISE integrated feedback mechanisms, like surveys, directly into their product flow. This seamless integration allowed them to gather insights without disrupting the user experience.
Understand why you need to focus on word of mouth compare to other marketing channels.
Choose right metrics to focus on (NPS > Conversion Rate): Some companies focus too much on conventional metrics like conversion rates. While these metrics are essential, they might not capture the full picture of customer satisfaction and the potential for word of mouth. Wise, for instance, found that optimizing for NPS had a more profound impact on word of mouth than merely improving conversion rates.
Make sure NPS is really driving business growth: WISE has found that as the NPS score reaches 6 and continues to increase, the referral rate will keep doubling.
Decouple the metrics to drive NPS and aim to make it 10 times better!
Build the company culture make sure everyone think backward from ideal not just making incremental improvements