The overwhelming feeling is that plus is poor value for most people. The main value I see in Monzo is the real time notifications, money management and budgeting features. I have no interest in the gimmicks.
I would guess that less than 1 in 100 customers would take plus. Would a more radical approach, like charging everyone 50p a month to bank with Monzo raise more income and democratise the feature set…?
Free Kisses Beat Bargain Truffles
In his book Predictably Irrational , Ariely describes a series of simple experiments that offered subjects something desirable – chocolate – at a variety of prices. Two types of chocolate were used – a Hershey’s kiss and a Lindt chocolate truffle. While the kiss is an inexpensive and common treat, a Lindt truffle is a far more tasty confection that costs an order of magnitude more than the kiss.
The first experiment offered subjects a truffle for 15 cents (about half its actual cost) or a kiss for 1 cent. Nearly three out of four subjects chose the truffle, which seems logical enough based on the relative value of the offers.
The next experiment reduced the price of each product by one cent – the truffle was offered at 14 cents, and the kiss was free. Although the price differential remained the same, the behavior of the subjects changed dramatically: more than two thirds of the subjects chose the free chocolate kiss over the bargain-priced truffle.
The power of free is real. Lots of people will leave, but between 50p and £5, people might actually pick Plus a lot more. Because it forces them to decide which one of the two is better for them.
Bunq recently went from free/paid, to effectively paid/paid/paid at different levels. I wonder how things will look for them next quarter. I.e. how the mix looks like after the change, and if average revenue/profit per customer is up or not.
It’s simple what Monzo need to do, and this isn’t it sadly. As others have said people will just leave. If you paywall an account it’s just going to alienate users of certain classes. I think Monzo was heading in the right direction with the different tiers of plus, it’s just unfortunate with COVID they can’t offer all the features they like…
I pay the £5 Plus fee, but if it forced everyone to pay something, even 50p I would leave. I don’t believe in banking based on ability to pay. People forget that in some places in the UK 50p or £1 is still a lot of money to some people.
(Sorry, I will have to escalate this.)
Wheres this cake everyones talking about?
Having said that about 45 thousand customers out of ~4.5 million willing to pay for plus in its current state is probably about right.