How about selling loyalty to businesses?

(Phill) #1

Okay, so somehow or another, the bank needs to make money. That’s not evil, it’s good.Monzo making money means Monzo can continue to be good. Yay!
So, here’s one idea for how to make some money. It would probably require the implementation of a new position, but I think the benefits would well outweigh the costs.

So, the idea is “sell loyalty”. To be more precise, sell discounts or loyalty points.

For example, you approach large company and say “Give us some money & we’ll provide our customers with points whenever they buy from you” or "give us more money, and we’ll give our customers discounts for buying from you"
Then, you could provide a list of those businesses, coupled with a map, on another tab of the app.
Monzo makes money, businesses get advertising, and account holders can take advantage of deals.

As an extra on this, lets assume that the cost is relative to the size of the business - so small local shops could afford to buy in, even though they won’t get so much benefit. This means that the account holders can use the app to find local cafes and small businesses (which have a very similar demographic as Monzo to begin with)

I’m sure that this isn’t something for this phase of development, but if it’s something you’d consider, then it may be helpful to consider it while constructing Monzo’s infrastructure.

What do other people recon?

Edit: Actually, you’d likely have people saying “I get a discount there because of Monzo”, so could be a great way to also boost brand awareness in the future, once the rollout stops generating its own awareness with golden tickets etc.

(Sy) #2

I was going to say what I thought but it would not let me post less than 20 characters :joy:

(Phill) #3

So… is that a positive or a negative? xD

(Sy) #4

All jokes aside I think it will not work from a business perspective due to the size of Monzo in the next few years. Big firms either do their own schemes or expect you as a bank to pay them to if you want to offer discounts to customers. As Monzo likely to only make money out of overdrafts I doubt they will be willing to give away that precious earning to customers as a discount. Small firms would be better off just having a points scheme instead of discounts but by the nature of a small firm their geographical reach will be limited and their customer base have a real mix of different bank’s card holders so Monzo may be a very small proportion. A better idea is something like Tail which seems a good fit for Monzo in this stage of it’s development. It requires no real input by Monzo or the retailers as the graft done by Tail

(Phill) #5

That makes a lot of sense. I think, as Monzo increases in size, there may be room for something like this, but - I’ll admit - you’re probably right that it won’t be a big money maker, and, for small businesses, the only advantage at all would be “being seen on the Monzo app” which perhaps isn’t a great incentive (certainly now while it’s still so small)
Thanks for the constructive breakdown ^^

(Jamie 🏳️‍🌈) #6

‘Loyalty’ and points IS evil. It’s profiling, and tracking, and ultra-targeting to make you spend more. I wouldn’t want my :monzo: Monzo account to sell my ‘loyalty’ to the highest bidder. It’s the internet’s biggest con, if you’re getting a service ‘free’ it’s you who is being sold. Loyalty points aren’t giving you anything for free. Business doesn’t give stuff away, in the bigger picture, because you lose money when you give something away and don’t get anything back.

Monzo will already have my spending data. I’d prefer it made the money out of me so it could improve its offering to help me save money from everywhere, not just paid-for partnerships.

(Alex Sherwood) #7

That’s an interesting idea, you’ve obviously put quite a bit of thought into it so thank you for taking the time to share it. I can definitely see how it would benefit users, there are a couple of challenges that I can think of though..

  • Monzo would be asking businesses to pay them money in advance - on faith - before Monzo adds them to the app. Some businesses would be reluctant to do that.
  • By including them in the app, Monzo are effectively endorsing them so they’d need to manage complaints - to be fair, plenty of other companies do manage this though.
  • Businesses would probably prefer to have control over their promotions, rather than allowing Monzo to decide what they’ll be & when.

The good news is that Monzo already has a pretty good idea of how it’ll make money - first through lending, then the marketplace - so it doesn’t need to make money from this sort of thing, although I’m sure they wouldn’t turn their noses up at additional revenue streams either :wink:

Tom (Monzo’s CEO) is very keen to see the world of incentives get shaken up & he shared how he expects that to happen recently, at last month’s open office -

Monzo users would get incentives for using their Monzo card with participating merchants & by sharing user’s (anonymised) data, Monzo would enable the merchants to make much more targeted offers.
That might not make Monzo any money or maybe it could :thinking: but either way, it would potentially be a huge benefit to users, which would increase loyalty & help attract new customers, which would ultimately lead to Monzo making more money anyway :tada:

(Phill) #8

Thanks, that’s a really interesting way of looking at it, and it’s true that I hadn’t considered (basically any) of these issues haha (shows what posting an idea in the moment does for you!) But still, better an idea destroyed than an idea ignored =P
So is this the main monetisation model? Does this differ from other banks, or is it quite similar? From an outside perspective, it seems similar (which isn’t an issue at all, don’t change what isn’t broken) but I am curious xD

Btw, I have to disagree with the comment above that all points systems are evil, I think it very much depends on the way they’re done, and I think there are situations in which there is a net saving for the spenders at those institutions.

(Sy) #9

Hope you did not think I was being negative, I was just trying to be a realist and look at it with my businessman hat on. However Kudos for coming up with the idea. It is suggestions like this that make the community thrive, and for every 25 ideas thrown into the ring Monzo may take one and run with it, or tailor an idea and make it more workable

(Alex Sherwood) #10

Your response to these critiques has been awesome too!

The lending will allow Monzo to break even, it’s basically a stop-gap to stop them burning through investors capital, while they get the API & the marketplace ready, which is when they’ll make the real money.

It is a very different approach to the way that banks make money now. Monzo won’t be relying on punitive fees (like unplanned overdraft fees) & selling you products which may or may not be the best products for you, while your inertia prevents you from switching.
Instead, they’ll become the hub for you to use to manage your finances, giving your the tools that you need to analyse & manage your finances with as little friction as possible. Eventually enabling you to choose almost any product, from almost any provider for each of your needs in a competitive marketplace. How does that sound?

(Phill) #11

No no! Not at all!
I believe the best way to make something work is for everyone to keep throwing half baked ideas onto the pile and then tear them to shreds xD
The ideas that make it through a few rounds of scrutiny can then be progressively tortured until they either die or are decided to be “satisfactory”

Honestly, I have a financial background, but it’s quite different from this, so any and all information and insight is equal part interesting and valuable to me ^^

(Phill) #12

Well, that sounds quite wonderful xD
So, if I understand correctly (and please correct me if I am insufficiently correct, as I have been known to be), the bank will make a little money from lending to break even.
Then, it will use our data, to help us, by showing us statistics that aid in our decisions, to help us save money?

Edit: Sorry, so where is the income generated with the marketplace?

(Alex Sherwood) #13

Correct :smiley:

There’s two potential approaches, that I’m aware of - they could just take a cut of all revenues that the providers make from selling products through Monzo’s marketplace. That would be a bit like Apple’s app store, although Apple has an advantage in that all payments have to be made via them so they have 100% visibility of that revenue..

In the video from the open office, that I shared the link to above, Tom also mentioned that Monzo might simply charge x% of the fee that the user’s paying for a service that Monzo’s helped them discover. So Monzo might let you know that you could save £x & that they’ll charge £x for helping you find that out. The service would be optional & Monzo would be completely transparent about what they’re charging.
I think Tom does a better job of explaining that than I just did :wink:

(Phill) #14

Ahhh, I see.
So as long as x1 > x2
Everyone’s a winner

Thanks everyone, that’s been really insightful ^^

(Andre Borie) #15

Monzo users would get incentives for using their Monzo card with participating merchants & by sharing user’s (anonymised) data, Monzo would enable the merchants to make much more targeted offers.

I seriously hope there is an opt-out. I do not want my data shared, anonymised or not, and I’m sure I’m not alone in this case.


Just wanna give you a round of applause, sincerely. Your first thread here and it’s been great so thank you. I can’t add anything else that hasn’t already been said. But seriously, kudos for your idea and I think it could work in a modified manor as thers have said.

Oh, and I forgot, welcome to the forum!

(Marta) #17

Yeah, I agree with @HoddzDJ, @Keyno10 just got adopted in Community. :wink:

(Sy) #18

totally agree … award winning :trophy: :medal_sports:

(Jamie 🏳️‍🌈) #19

Agreed, welcome @Keyno10 – don’t let my vehement dislike of loyalty points schemes detract from your contribution to the forum.

I use points schemes. Hell, Sainsbury’s is going to track me anyway using my long debit card number, I may as well rack up some points in the background I can give to charity at the end of the year. But I still think they’re cynical ways of obsfucating higher prices, selling you 2for1s on bad deals and targeting your wallet etc. whilst you collect something intangible and valueless.