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The issue with high growth strategies is they cost a lot of money if the unit economics aren’t positive.
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So the second half of last year Monzo stopped focussing on growth and focussed on getting positive unit economics (see the Chief Executive’s review in the 2018 Annual Report).
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Monzo achieved positive customer unit economics by October 2018 (see here). This means every new custom Monzo gain provides more revenue than it costs Monzo to run their account. So a high growth strategy makes sense from a profitability standpoint.
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However, just because Monzo are focusing on growth doesn’t mean they’re not also trying to retain customers (and reduce churn).
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It could be argued that many of the features Monzo are currently working on should improve customer retention: seeing Credit Cards in your app, Monzo Plus, energy switching, remortgaging, savings pots etc… (an argument could also be made for business accounts improving customer retention).
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Also, many of the features Monzo built to increase growth were so-called “network features”, which reduce churn because people need a Monzo account to use these features with their friends, (eg: Shared Tabs, Bill Splitting) or are genuinely useful current account features, which improve Monzo’s offering, (eg: Pay Anyone, Monzo.me).
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You can see proof that Monzo are improving their customer retention by the increasing percentage of people using Monzo as their “main account”:
https://twitter.com/t_blom/status/1074728958371991552
- Overall, I’d say that Monzo are doing a pretty good job of increasing growth while retaining customers. Admittedly, I would like improvements to come to the Current Account faster, but I think this might be a mixture of my own impatience/excitement and how faster Monzo seemed to move at points last year, and I do think sometimes Monzo get too excited with creating completely novel (and commonly very useful) features when there are quite a few improvements to existing features that could be made.
NB: I have a feeling that the pace might pick up again once the new account screens have been finalised - I imagine redesigning two fifths of the app has taken a lot of work.