Starling Discussion: Part 2

Coral Crew:

Can we move this one over now please?


@simonb, just to follow on from this:

Counterpoint - when Monzo did do it (quite a while ago now!) it was hugely successful.

Out of interest, what metrics were used to measure that?

I would have thought bribes would introduce too much bias and influence over someone to measure success effectively. Especially when it comes to services. Are people recommending people and claiming to love Monzo for free money, and are those who join do so because they like what’s on offer, or because they’re gonna get something out of it, then stay due to inertia? I know a few people who tried to get into the bank switching game, moved to first direct first, and then just stayed because they couldn’t be bothered switching again, rather than on the merits of the service alone. A big success for first direct I’m sure, but how do they measure that success in terms of the quality of their service, rather than consumer laziness?

Although I can probably see how it may incentivise someone to go out of their way to try something and they actually fall in love with it.

I suppose ultimately it depends on how it’s handled, and I would probably be a little more accommodating of something that would perhaps only reward the person I’m referring for signing up, and not myself. It’s the referrer getting a kickback that murks the water for me.

I assume when companies have to reward their customers to recommend them, it’s due to their product not being good enough to effectively sell itself on its own merits, and I’m not sure how you could measure success to account for false positives in such cases.

And then we have companies like smol, who keep pestering me to send this message to my friends and family:

Hi, I thought you might be interested in a brilliant new company I am using called smol. I really recommend them!

What is smol? The world’s most effective concentrated laundry capsules and dishwash tablets that come in the post. All this and they are cruelty free too.

By delivering direct they can save you up to 50% on your normal brand price. They use less chemicals than other brands (with no loss of performance) plus their packs are super compact and plastic-free.

They are currently running a free trial for new customers. I didn’t want you to miss out.

This is blatant MLM in the form of a referral program. It’s a damn shame because their products are excellent, but I can’t recommend them, and the second a laundry capsule comes along that matches their credentials, and isn’t run by big laundry, I’m gone. As I direct result of their approach to a referral program.


A £5 reward wouldn’t make me recommend something that I didn’t believe was good enough.

I always see offers to refer a friend for various things and make some money. I only do it if I would have done that for free anyway.

But I’m sure some people made a chunk of money from recommending Monzo. Would they have done it for nothing? Maybe. Maybe not. But there’s no way to know or test that.

Starling can say they haven’t “bought” users but then they have 1/3 of the users, maybe if they’d offered a reward they might be closer? Or maybe they are happy with their growth and now making a profit.


What is MLM, please?

Basically a pyramid scheme lol

Multi-level marketing ( MLM ), also called network marketing [1] - or sometimes pyramid selling [2][3] [4] - is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company’s products or services, while the earnings of the participants are shared in a multi-tiered compensation commission system. An MLM’s compliance program ensures that compensation paid by the MLM is based on actual sales to real customers, rather than based on wholesale purchases or other payments by its participants.[5]

Source: Wikipedia


Yep, this. My issue is more to do with the approach to selling that MLM schemes take. It’s very pushy, and rubs me the wrong way. Smol send me those emails on a monthly basis asking me to copy and paste a crunch message to push smol on to my friends. The tactic, the wording, and the overall approach is very similar to that which is employed by pyramid schemes, and I can’t stand it.

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Well done. That’s definitely what it’s about.


I recommended a few people when monzo ran the referral scheme, the money was just a little cherry on top. I think the value was way too low to be considered a “bribe” and kept the recommendation genuine. I saw it as more of a “cheers, have a drink on us” type thing.

I also still recommend monzo without the promise of getting a fiver.


Both of these approaches happened. For a while just the new member would get a credit, then for a while it was both.

Unfortunately I don’t remember the exact success criteria, or whether one of the approaches was deemed more successful than the other. It was quite a while ago now.

Overall - I don’t think the referred customers behaved differently to the organic ones - similar activity, similar main account usage rates. I could be wrong on that. But assuming that was indeed the case, then it becomes purely about growth, which therefore increased interchange revenue (pre-COVID) and made progress towards profitability (since each subsequent customer was net positive by that point rather than loss-making)

As far as “buying customers” goes, you might argue that any money put into marketing/acquisition is buying customers. It’s just that one flow goes:

  • Hey, want to try our product, potential customer? Here’s a fiver to try it out!

and the other goes

  • Hey Google and Facebook! Here’s some money to show our advert to people who you know through their data would probably be a potential customer! And maybe you can show our advert when people search for our competitor too! :stuck_out_tongue_winking_eye:

Those things aren’t really that different. Some might argue the former is ethically preferable.

So… stones, glass houses, etc.


Absolutely. You make a fair and sensible point I think.

The differentiator is essentially indirect vs direct, i.e. a general advert vs pressure from a peer.

I think there’s a subtle but important distinction to be made about paying to advertise your product, and paying someone to sell your product, and it’s the latter I’m personally uncomfortable with. I find it to be the less moral approach.

Word of mouth is by far the most effective method, but especially so when there’s no incentive for it. That’s how you know something is great, which was the case with Monzo, and I don’t think they ever needed to incentivise it.

When my friends recommend something to me, and there’s no kickback for them, that has almost always resulted in a sale, once I’ve done my own research.

I think ultimately it’s how you approach the method, rather than the method itself that is the moral differentiator.

Weirdly I’ve never had an email like this from smol - but I totally get how word of mouth is important for small companies like them.

I like their product, and I’d recommend it on that basis but I’d be unlikely to use a copy and paste any company suggested!

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I think you could take this and run with it a million different ways if you really wanted to.

Have you ever chosen a product because theyve been reviewed by someone on a blog or a website thats been given that product for free with the purpose to review?

Have you ever used a discount code from a third party website that gets a cut for you using that discount?

I think you can read into this all you want but id say the number of people who did it for the £5 incentive would be very low, it wasnt sinister and i think smart marketing to be honest, simply get your happy customers to promote a product they like using.

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Completely agree. The issue at hand is a rabbit hole all of its own, and probably worthy of a dedicated thread. To answer some of your hypotheticals from a personal stand point though.

No. I seek out the reviews myself for a product I’m already interested in to gauge if it’s something worth spending my time or money on. I would liken this to asking a friend if they’ve tried something, what they thought, and then if I notice there is a referral program, I’ll ask them if they’d like to refer. Similar to how my bulb conversation went down with a friend a few years back.

Yes, but again, it’s something I seek out myself. I don’t see a 30% off coupon for McDonald’s and decide to buy McDonald’s on that basis. I’ll be wanting McDonald’s so I’ll seek out any potential coupon codes before hand. It’s quite a similar scenario to that above.

I think you might be surprised here honestly. Especially when you consider students. My brother once had me refer him to PayPal so they could get a free Dominos from the free tenner. He never used PayPal prior or since.

To summarise though, the distinction here for me, both in terms of your scenarios and referral programs is based on approach. If a friend comes to me trying to persuade me to sign up to Monzo under the guise we’ll both get £5, isn’t going to convince me to sign up. I’ll just assume they’re want a free £5 and are trying to sell me on crap so they can do it. I’ve had friends try this on with me in the past, and I can’t stand it. But if I was interested in Monzo, approached a friend, asked about it, and then I see the referral program and ask them to refer me, then that’s just a bonus for something I was going to sign up for anyway.

I apply that same logic with the hypotheticals you pose too, and for that reason I’ll never actively recommend something with a referral program. But I am willing to use my referral links if someone was already planning to sign up and asks if they can use it.

Edit: to quickly tack on this in a more concise way. If there’s something in it for the other party if I sign up, I’ll be hesitant in trusting them if they’re the ones approaching me. With good old regular ads, there’s usually not an incentive for signing me up. They get paid just for advertising, not for me signing up.

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I know referrals discussion started as part of the Starling debate, however, is it time for this discussion to have its own separate thread as it seems to have taken over the theme of this one.

Just a thought, as I find referrals, and people’s attitude towards them, intriguing.

How many, like me, took full advantage of the Flux and Papa John’s promotion at both Monzo and Starling?

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Not me - I considered using Flux after the hype on the forums. The product in theory is excellent, however it isn’t going to work because of the sheer amount of retailers you’d need handing over transaction data.

Unless someone like Visa or MasterCard got behind it (i.e bought it) and created a platform, it won’t work.

Nice idea in principle though. I do wonder what they do with all of the individual transaction data though.


Being as Google has just announced a service to trawl through Gmail and Photos in order to find any receipts and parse the information back into its new GPay service, I think we can safely assume Flux, with its proprietary platform, is dead in the water.


I only used it for those deals, then disconnected it.

Me bad :rofl:

Flux gets the data directly from the retailer and eliminates the need for a paper receipt. I don’t need to do anything besides pay with my card

The Google solution requires me handing over my email to a retailer so it can be leaked in a data breach, or requesting a paper receipt and taking a photo of it. More effort


Unless you’ve never bought anything online, you’ve already given your email address to a host of retailers, so I can’t see how declining to do so at a till is particularly keeping you safe from the hypothetical data breach.

My point was generally Google has just made it easier for retailers to get their receipts into their customers’ banking apps, making Flux worthless to most shops, with the benefit that they also get the email address data first hand, and don’t have to share it with a third party. The retailers will make the decision for you, by just not taking up Flux.

This is probably a discussion for the Flux thread.