Welcome to another episode of 3-Minute Marketing, where we interview the world’s top growth marketing leaders and distill their knowledge into 3-minute TED talks for your binge-listening pleasure.
Today’s guest is Brian Chevalier-Jordan, VP of Marketing at Bond, a super hot fintech brand that enables organizations from any industry to embed next-gen financial products into their existing customer experience.
Brian is a self-described “fintech nerd”. So my question for him is, “What are the top growth secrets of leading fintech brands?”.
- At LendingClub, their superpower is direct mail, which sounds bizarre because it’s so old school. But it’s really powerful and has allowed them to become the largest personal lender in America.
- They’ve loaned out $1 billion dollars every month because of direct mail.
- You probably get a dozen pieces of email a day in your personal email inbox, but only one letter in your physical mailbox. When you get an offer for a loan of up to $40k in your mailbox it really stands out.
- One of SoFi’s big secret weapons is TV. Right now, everyone is all about buying online video and OTT media because it’s so targeted. But SoFi buys a huge amount of linear TV and it’s extremely cheap.
- SoFi also has a “super app” that they can use to cross-sell customers. When someone applies for a bank account or a loan they give SoFi their social security number. SoFi then does a soft pull of that customer’s credit to find out more about them.
- One of the things they strive for is a “magic moment” inside of the app where they can see someone’s “financial self” and let that customer know they know something about them and can offer them a helpful service for it (e.g., “I noticed you have some credit cards, did you know you can refinance them with a personal loan?).
– You’re listening to Three Minute Marketing, where we interview the world’s top growth marketing leaders and distill their knowledge into actionable bite-sized insights. Now here’s your host, Chris Mechanic.
– [Chris] Hello, everybody, Welcome to another episode of Three Minute Marketing. Let’s jump right in. Our guest today is Brian Chevalier Jordan, I hope that I pronounced that right.
– [Brian] Almost, it’s Chevalier-Jordan.
– [Chris] Chevalier-Jordan and Brian is the VP of growth, or the CMO maybe of Bond.Tech, which is a super hot Fintech brand that enables almost any other company to become sort of a Fintech brand in and of themselves, if I’m understanding the value prop correctly.
– [Brian] Exactly right.
– [Chris] But in looking at Brian, he’s a very talented individual, he’s been in the business for a lot of years. I love your LinkedIn profile. It says, Fintech nerd, real estate lover, right-brain, left-brain marketer. Fluent in numbers and branding. Growth leader, deep background in fintech, product marketing, omni-channel acquisition. Veteran of startups and publicly-traded companies alike, SoFi, LendingClub, and Financial Engines alone. So I would say you’re pretty well qualified to be on the show today, Brian, and we’re happy to have you.
– [Brian] Thank you very much, thrilled to be here.
– [Chris] So, I want to know some of your best secrets. If you could use your three minutes to educate us all on some of the sort of deepest, darkest, and best secrets to growth for fintech brands.
– [Brian] Yeah, sounds good. You’re going to start the timer?
– [Chris] Yep, we’re starting right now, okay.
– [Brian] Awesome, okay. So let me start with telling you a little bit about LendingClub and SoFi. If you don’t know, LendingClub is a personal loan company. They actually are the largest personal loan company in America, and SoFi is a leading financial super app. You might have seen them on the recent Super Bowl, where they got super at SoFi Stadium. So LendingClub has two, well, one secret really that’s really very interesting SoFi has two, at LendingClub, their super power is Direct Mail, which I know is super old school and seems so totally bizarre, but it’s really powerful. It’s allowed them to become the largest personal lender in America. And what’s actually happened then is that they’ve like loaned out a billion dollars every month because of Direct Mail. So if you think about it though, you probably get like a dozen pieces of email every day into your personal email box, but maybe like one letter in your physical mail box. And so when you get this offered for a loan of up to $40,000, it really stands out. So that’s huge. I know it doesn’t sound very sexy, but that’s really big for LendingClub. SoFi has two. One of them is also kind of also, which is TV. So everybody’s all about like buying online video and buying like OTT or something like that because it’s super targeted, but SoFi buys a huge amount of linear TV and it’s super cheap. So you get this really, really cost effective cost of acquisition through TV, which is surprising. Most people, most brands can’t do that. The flip side of that is that SoFi also has an app and this is super app. So if you get in because you started like trading crypto with them, or you have a bank account or something like that, they can start to cross-sell you. Because when you apply for a bank account or for a loan, you have to give them your social security number and then they do a soft pull of your credit and they can immediately start telling a lot about you financially. And one of the things they strive for is something called a magmo. Which is a magic moment inside of the app where you can see your financial self inside of the app. And what they try to do is say, I know a lot about you, but not in a creepy way, but I do know you have some credit cards. Did you know that you can refinance them with a personal loan? Here’s a really great offer. You could save this amount of money or did you know that you have a very high interest rate on your car? Maybe you should refinance that. So they have all these ways of getting you to like take another step. And when they do that, they acquired you once at certain price, maybe cheaply through TV, and they’ve acquired you again for another product at zero. So a lot of their cost for acquisition, their tax are much lower than the rest of the industry. So those are the secrets that I think you probably should know.
– [Chris] Well, I love that. That’s good. And we’ve got 30 seconds left and I’ll summarize. So basically LendingClub was just like a Direct Mail geneious. And SoFi had sort of an old school tactic of linear TV, plus the super app and the magmo where they can just upsell, cross-sell, up and down.
-[Brian] Yeah, actually it is.
– [Chris] It’s like an old school plus new school.
– [Brian] Yep, and SoFi actually, they don’t even call it cross-sell. They say it’s cross-bought. So they call it cross-buy.
– [Chris] Cross-buy, that’s awesome I’m going to use that. All right, Brian. Well, that was magnificent. I love it. It’s really interesting that it’s actually both of them or both of the example brands had some old school. So maybe some time to go back to the old school, keep it back.
– [Brian] Sometimes the tried and true works.
– [Chris] Let’s do it. All right. Well, we’re going to wrap here guys. If you enjoyed this, please give us a like, a thumbs up a comment. Brian, let’s talk a little bit. Or if you could let everybody know just where they can learn more about you and or Bond.
– [Brian] Yeah, so you can go to bond.tech to learn more about Bond. You can email me [email protected] and you can find me on LinkedIn. I’m the only Brian Chavalier Jordan in the world.
– [Chris] Awesome. Love it. All right. Well, hey, if you like this, there’s probably some additional footage somewhere around this video, or if you’re on the website and you want to listen to the rest of our conversation, just stay tuned. So let’s dig a little bit deeper into the two case studies. So we’ve got LendingClub on the Direct Mail side. Sounds really interesting. And then I want to talk a little bit about SoFi too, but what was it about them, did they have something special about the approach to Direct Mail? Did they have like really good offers, really strong copywriting? It’s like anybody can blast a bunch of mail, right? But there’s some art or there’s some art to it, right?
– [Brian] Yeah, there’s a lot there. So an entire set of teams, we’re devoted to that. So you’ve got the data scientists who, I mean, you think about data scientists, maybe doing something really interesting with like super computers and stuff like that. And in this particular case, yes. We had a team of data scientists who do doing a whole bunch of stuff, but really with your credit score and with your past financial life. So they’re really like honed in on who needs credit, what they could use a credit for. Whether or not they’re going to be somebody that we could acquire effectively or cheaply. And one of the things that they did is like, they were so smart about it and they were constantly testing all these things. Like my team was responsible for messaging. So we were always feeding the beast of like, here’s a new thing you could say, here’s a new way to talk about it. Here’s a new color we should be using. And so we are always like testing, testing, testing, huge numbers of cells, like test this cell against this other cell. And you can test like 16 or 30 cells at the same time. It’s really amazing when you have that kind of scale, because if you’re sending out like a million or 5 million pieces of mail every month, you have the opportunity to A, B, C, D, E, F test. It’s pretty amazing. So that’s definitely one of the things, but then also, there’s constant testing and constantly talking to people. So thinking about like our customers by actually speaking to them and finding out why they did something, why they didn’t do something. And what we found out is that LendingClub is actually able to get deeper into certain markets. Like think about the south. The south is actually really it’s hugely populated, but they started closing a bunch of banks, especially in rural areas. So, but the mail still goes there. So if your bank closes and you still, and you need some money, you get this thing in the mail, that says you can borrow $20,000 or $30,000, like, wow. Okay, that’s amazing. So LendingClub was able to find those people places where they were not being served.
– [Chris] Interesting. Can you recall by chance, I know it might have been a while ago, but can you recall any individual tests that were like real winners?
– [Brian] Yeah, there were a couple. So one of the things that, one of the adages in Direct Mail is ugly cells or ugly winds. And it’s kind of heartbreaking because in the rest of the marketing world, something beautiful and slick is usually what works the best. But in Direct Mail, it’s really about getting you to open your envelope. So sometimes you want to do something which is a little bit sneaky, but also sometimes you want to do something, which is very like, it pulls at the heartstrings. So one of the things that we did, there’s two pieces that I really remember. One of them is this very large piece of mail. It just is like that big. It was enormous. So you get this huge thing in the mail and you’re like, what the hell is this thing? And it feels really heavy and maybe it’s official. I don’t know. And so you open it up and then you see like, oh, I can borrow $40,000. The other one is totally flip side of that, which we put it in American flag and an Eagle on the outside of the envelope. And I was horrified. I just thought this is so schmaltzy and the worst thing ever and it banged. It was unbelievable, it just absolutely rocked it. And we were like, what? Okay. So then we were doing other things in there where you’re like, you put a check, a fake check in there that has the American Eagle in a flag. It just, all this stuff to just try to like pull up, get people to think about America and feel good about the country. It was a little bit embarrassing, but it worked really well.
– [Chris] Yeah. All right. Well, let’s move on then to SoFi and talk about linear TV a little bit. It sounds like you were buying probably just like run of network just like all markets, entire nationwide sort of programs. You’ve mentioned it was inexpensive though. How were you? I mean, you’re probably thinking on like a CPM basis. It was inexpensive, obviously you were spending at scale, but how do you get, how do you get cheap TV?
– [Brian] Yeah. So there’s a couple of things. One of them is yes, we were buying run of network in some cases, but most of the time not, actually we did we would go to the up-fronts. If you’re not familiar with the way the TV is bought, it can be bought in a couple of different ways. And one of them is at an up-front. It’s not as common as it used to be. But what happens is there’s like basically a media week and it happens in New York every year. And you basically get the biggest advertisers in the nation being hosted by the biggest networks. Whether that be Disney, which owns like half of the world. And then if you’ve got a couple other that are very large and you go and you go to their events, they have celebrities there and they try to get these advertisers like SoFi or whomever else to buy a bunch of TV. So when you are buying like 30, 40, $50 million or $100 million worth of TV, they will give you a steep discount because they want to lock that pricing in. So they consider okay, I’ve got this certain amount of advertising that’s sold already. And then they can go to the other advertisers and say, “There’s a very limited supply, so the price just went up.” And so if you can get into that up-front, then you get a very good deal. And you also get prime, basically real estate prime advertising that you want. So we did a lot of advertising on live sports events. Those are one of the very few kinds of television that people actually do not skip the commercials because they can’t, because it’s live. So unless you’re one of those folks who like, you wait an hour after the football game, so you can fast forward through it, in that case, you’re probably getting your friends like slacking or texting you and saying like, I can’t believe that thing. And you’re like, damn it. So anyway, most people do watch it live. And that means that it’s very, very effective. It is expensive, but in comparison to the other kinds of advertising where people can just speed through it, it’s very effective.
– [Chris] And how do you measure it? Like, do you just use certain phone numbers or certain web URLs or is it self-reported or?
– [Brian] It’s very difficult to measure for sure. Especially when you’re buying, like SoFi was buying across multiple brands. Basically you would have to sort of just do it, like was it on or was it off, which is unfortunate, that you can definitely see an effect when you turn it on TV and when you have it off. So during the pandemic, we had to turn off TV because we didn’t know what was happening. And the federal government had just said, you don’t have to pay your student loans right now. So when you’re refinancing student loans like I was then suddenly you’re like oh my God. This is going to be really expensive. I don’t want to just burn money. So we turned off TV and you could see immediately the difference in the business. And then when we turned it back on again, the business just popped back up. So it was one of those things where you’re like what’s happening. If you do it at scale, if you’re one of those folks who tests and you’re like, I’m just going to put $100,000 into the market, you won’t be able to tell. And if you have a decent amount of traffic on your website, so you definitely need to do it at scale, which means it’s kind of a leap of faith. But when you think about this medium, it’s been around for like 75 years or something like that. People aren’t just throwing money away, you know about all these brands because of TV. It still works.
– [Chris] Yeah, I definitely see that. ‘Cause we have a segment of clients that runs a lot of TV and like will run their Google ads and their Facebook ads and display. But like the CPAs are always dramatically cheaper. Like if you working with an established brand, like Amazon is a client for us. And it’s just like silly, cheap CPAs, ’cause they’ve spent so much money building that brand.
– [Brian] Yeah, and when you think about it too, TV lists the effectiveness of other things as well. So if I saw a TV ad and then later on I see something on Instagram or TikTok or whatever, I’m like, oh right I remember seeing that. And then it’s like, oh yeah, I was thinking about that before. I just didn’t do it, now I’m just going to push. And it’s like yes, I’m going to do that. So it’s actually really effective and lowers the CAC across other channels too. And I definitely saw that directly as well when we were and were not advertising.
– [Chris] Yeah, and so to TV went in my mind from being almost like a not a good investment, like a dumb idea to now being almost like an arbitrage opportunity, especially if you can get like discounts in for buying at scale which obviously, not every Joe Smoke can pop 100 million bucks down for TV ads, but if it’s reasonably priced, you get certainly some lasting benefits from the brand awareness. But also I had Larry Kim on the show not long ago, he’s like this growth hacker, well known in the Google ads, BBC world. But he and some others are starting to talk about how brand search volume is kind of the ultimate growth hack. Like if you can get more people going to Google and searching for you by name, those signals are taken pretty much throughout the web. And like if you have been a search geek at all in your life, you’ve noticed like it’s all of a sudden, just like the largest brands usually are appearing on the front page. `Cause it’s a major trust factor. Like if I have 100 or 1,000 people searching for my name a month, but you have a million, like clearly you’re probably more trustworthy or interesting or relevant, right?
– [Brian] Yeah.
– [Chris] So, but there’s that impact of it too, which I think that TV always has probably been beneficial for other channels, but maybe not like at an algorithmic level, the way that it is today.
– [Brian] And it was harder to measure. You weren’t to be so precise with it the way that you are today, where you know, okay, I just saw my search volume search over the past couple of hours, like what happened there? Oh it’s because we bought the Super Bowl or whatever it was. Like, you can absolutely see those things in a way you couldn’t before because you can see such granular detail, especially right now on your Google analytics, I can see who’s on my website doing what right now. And you can definitely, correlate those two things. There is a way for you to look at TV and do some modeling and know like I bought this TV, let me phrase this, I’m not running TV right now. You can use a modeling of what you expect to happen. There’s a baseline sort of what would, the traffic that you would expect in the number of people who are acquiring. And then you do a TV buy, you put it on top of that and you could say, okay, cool. I saw this surge. I was actually, I actually had bought TV at that point in time. Then I can tell that Delta is from, buying the TV. It’s not super precise and it is certainly fraught with error, but it’s definitely one of those things that you can say, okay, I get a better idea than what I had before. And that that modeling not cheap.
– [Chris] Right. So quickly on the SoFi app, we could probably spend a whole 30 minutes talking about that. But I’m curious, was it very much like pre-planned and premeditated, like the app was devised and kind of working as you were first launching TV? Or was it a case where like you’d been running TV for a lot of years and you got this really aha moment to like Hey, let’s get an app and do this, the execute on this app buying initiative. How did it, I guess come to be?
– [Brian] Yeah. Well, I mean, SoFi is like a 10-year-old company, so it’s not like we’ve been doing a lot of advertising for a very long time. And it started out with a couple of guys from Stanford who had student loans from their business school days. And they’re like, this is super expensive. Why are we? Like this is dumb. And so they started like basically refinancing other people’s student loans using effectively like Venture Capital. And then they kind of grew from there. So it started with student loans and then kind of expanded out. And in other loans spaces, if you are in the financial services area, if you aren’t in the financial services area, I should say, loans and lending is where much of the profit comes from. So they started out in loans and where they went from student loans to other kinds of loans, mortgages, that sort of thing. And then they said, okay, we’ve got this opportunity to grow with our customers. These are people who graduated from top-tier universities, usually with an MBA or PhD, or an MD. And those folks are let’s just call them 30. Well, as they get older, they need to get a mortgage. They need to start saving. They need to start doing all these other things. So SoFi said, okay, let’s just grow with our audience. So after they refined their student loans, they’re going to need to have life insurance. They’re going to need to have this and that the other thing. And then you can build an app around that. It’s basically a lifestyle app if you will, but for your finances. And as they did that, then the opportunity, like I said to encourage cross-buying was huge because at that point in time, you’re like, okay, I kind of know a little bit about you. I know you just graduated and you’re probably thinking about your student loans. Great. Let’s talk about that. But then also a couple years later, you’re making money and you’re paying off your student loans and you’re feeling better. You’re probably saving for a house, okay? You should have a bank account. Okay, now you have a significant amount of money for your house. Let me get you into a mortgage and–
– [Chris] Buy some crypto.
– [Brian] Exactly, buy some stock bits, part of Apple or part of whatever, Tesla. Yeah, so it started out as one of those things, which just kind of snowballed. And as the company learned more and more, we just started running more experiments and then we started resourcing it as well. So like it started out with one of those things, which is like, we should probably do this. And then that worked and you’re crap, let’s do more. And then you hire more people and you bring people to say, okay, there’s an entire team’s job, which is to cross-sell people inside of the app. They basically look at these things. They’ve got their own data scientists and their own marketers and their own people who are building these different size modules. They’re testing things all the time. And when you’ve got enough people going through the app, millions of people, you can run a bunch of tests in a bunch of really smart ways.
– [Chris] Yeah, no, totally. I can imagine. That’s pretty brilliant though. The whole concept of grow along with your customer. So it’s almost like the two founders that you were saying, is almost like they were basically scratching their own itches as they grew in a way, you know?
– [Brian] Yeah, if you know your audience really, really well, then you can start to offer them really great products. And that’s actually what we’re seeing a lot of now. And that’s one of the things that I think is really fascinating about Bond, Kind of bring it back to where I work today. The kinds of people that we serve are often really niche companies. So if you think about somebody who’s, there’s somebody who’s really super serving a specific community, that could be people with teenagers who need to give their kids money so that they can actually buy stuff on the internet, not just giving them cash ’cause who has cash and more. So those folks are super, those people are being super served by a number of different kinds of banks, Step being one of them, et cetera. Well those companies really know their audience really, really well. And a lot of times they have financial problems as well. So that may be like one of our customers is they focus on people who are in barber shops. So you’re a barber and I mean, it’s very niche, right? But they know that lots of these people have cash flow issues because they get paid every two weeks, but they may be not like the most effective, savers or people who use their money. Well they should probably then get their money faster. So this company called Squire is actually offering their customers to get their payments from their customers immediately. So you walk out the door and if you’ve got a Squire Card, then you can just get paid right then and there, you don’t have to wait two weeks. So they know their customers inside and out. And when you know your customers, you can offer really innovative and really effective products as well as marketing.
– [Chris] Interesting. So I’m just trying to wrap my head around this. So Squire is a company that sells or that serves barbered shops, right? And so they work with Bond to create a card which allows barbers to get paid the same day.
– [Brian] Exactly. Yeah. So Squire offers like you basically can create a, they’re like a POS service and they also do scheduling. So like you pull up the Squire App and you say, I need to get my haircut. I’m going to go down and I’m going to see Joe, cool. I’m going to see him tomorrow at three o’clock you walk in, hey Joe, cool. You sit down and get your haircut. And then you pay through the app. And when you pay through the app, that money then gets immediately transferred over to Joe’s card. So Joe can walk out the door and go buy milk or put gas in his car or whatever it is. Or if it’s his debit card, he can also use that to pay his, it goes into his bank account and then he can pay his rent, whatever that may be. So there’s a huge way for people to, like I said, to start to serve their communities a little bit better, but Squire, they built an app for barbers. They don’t know anything about finance, so why should they though? They can just basically outsource this. And that’s what Bond does which is like, there’s a SaaS solution for everything. Well we do banking as a service. So there’s the vast solution for this. Don’t do it yourself, just come to Bond and we’ll take all that hassle off your shoulders.
– [Chris] Interesting. So I’m still kind of, I’m feeling slow a little bit because wouldn’t the barber otherwise just like collect payment from that customer.
– [Brian] Yes.
– [Chris] And like.
– [Brian] But barber then, if the barber is not an independent contractor or doesn’t have their own shop, they work for the man. And the shop owner is the one who runs payroll and pays them. And they don’t do that every day. They just do that on a weekly basis or twice a month or something like that. So it’s one of those things where when you need immediate access to cash and a lot of people do, then you could run into trouble. And that’s where the founders of Squire knew that these folks were, they were using payday lending. They were taking out small loans and going to loan sharks and things like that. And when you’re those kinds of fees, they can have a ridiculous APR. So pay-day lending can have like 300% APR, which is your credit card has like 20 or 30%. This is 10 times more expensive. So what they’re doing is really just saying like, you should get access to the cash that you’ve already earned.
– [Chris] Now, is that typically the use case for Bond customers, like faster access to cash or there a variety of different use cases?
– [Brian] There’s a variety. So we work with a company called Cledara, which helps customers or I should say, businesses to pay for their, all their subscriptions. So you run a business, you have probably a subscription to like AWS, you have subscription to various other things. Maybe you’d have like LinkedIn premium, et cetera, cetera. But Cledara gives you a virtual credit card for each one of those subscriptions so that you can see, like you can turn them off immediately if you don’t want to pay them anymore. You can make sure that you’re not paying like additional fees on top of them. And then you can also get like other discounts and things like that. So Cledara uses virtual credit cards that we create. And they power this business that gives you like incredibly granular detail about all of your subscriptions that the business has.
– [Chris] Got it. So instead of just like being buried on the statement somewhere that like annoying recurring charge that you’re like, oh, I meant to cancel that. I meant to cancel that, like six months go by, you haven’t canceled it still.
– [Brian] Or your paying for it. Yeah, you’re paying for employees sometimes who leave, so you don’t even know that they’ve had the corporate credit card, the one corporate credit card that is like very hackable. And they’ve been, you’ve been paying for this person who left a year ago. Like, oh my God, I didn’t know that I was paying like $100 a month for this person and they’re not using this thing. And that happens all the time.
– [Chris] That has happened to us actually with sales navigator for LinkedIn. And I imagine that the employee probably had been using it the whole time that we were paying for it, right?
– [Brian] They certainly could be, yep. Or your phone–
– [Chris] This all their personal account.
– [Brian] All these things that you never know about. And sometimes they can be really sizable too, especially now that everybody’s got a SaaS solution, maybe it’s a $500 a month sort of thing. I don’t remember, one of my solutions is like $1,500 a month. So like if I wasn’t using that and I didn’t even think about it, then suddenly the business is losing $18,000 a year for nothing.
– [Chris] Yeah. Now I know we’re at time here. Do you have another minute? I have another, I’m wondering.
– [Brian] I do.
– [Chris] I mean really my last question or one of them if you have extra time is, so Bond seems like quite a different beast than LendingClub and SoFi, right? Like it’s more be to be? So what do you think in there or what’s happening internally now with your marketing? Like, do you have sort of a big swing idea, like buy a bunch of TV and have like an app on the backend kind of thing or?
– [Brian] It’s funny because when I was at LendingClub, LendingClub just recently bought a bank and I was part of the business to start to think about what do we do about banking? I’m like what kind of bank services should we offer? Should we acquire? Should we not? And I knew from being on the inside that building a bank was going to be incredibly painful and difficult. And I knew from first-hand experience how hard it was. So when Bond came up, I was like, oh, this is really interesting. ’cause I could see, like I worked in Fintech, I worked next to engineers and I knew how hard it was going to be. It was going to take us a year and a half to build this thing and Bond can do it in a couple of months like, oh wow, that’s pretty cool. So I just saw that the tremendous opportunity that Bond offers and it can make it can take a shoe manufacturer and turn them into a bank. Like that’s pretty cool. And so I saw that and, but I think at the same time, like there’s such demand out there for something like this, that really our marketing is pretty minimal because we do have a really great PR game. And one of the things that we were able to do is get some terrific coverage of our series A and seed round funding. So unfortunate Forbes that sort of thing. And what’s happened is that if you just search, do a Google search for Bond, we’re like number four or something like that below, like James Bond, .007.com, which I think is pretty awesome, below Investopedia talking of bonds. And I think maybe, I think we’re above Barry Bonds. I think, I’m so, like it’s amazing that we’re on the first page of a four-letter word search term because we have really amazing SEO. And that is one of the things I think is really fascinating about this business. But at the same time, like I said, we don’t have to do a lot of marketing. We have to do a lot of messaging and just like we’re so sort of struggling with like, what is this thing? And what does it do? That is the piece that is like right now where I focused, because it’s such a new concept. Like I could actually become a bank. How, what, okay, I just run a consulting service or like I help auto mechanics schedule auto repairs. Those are the kinds of things that people don’t think they could become a bank, but they could. And if you are able to like, if you, for instance, if you were to go into Home Depot and you’re a contractor, you are there every day and you’re paying with your American Express Card or you’re paying with your Visa Card or whatever it is, well, what if they offered you something? Which is like, hey, I’m going to give you a Home Depot Credit Card, which will give you even more perks, better discounts. And if you use it even more places, like if you go to Target and you use it or you go to Best Buy and you use it, I’ll give you even more discounts. Well, wow. That’s pretty fascinating. But for Home Depot to do that today, if they work with a regular bank, it takes about two years and it’s super, super complicated. And then you don’t even know if it’s going to work. So that’s the cool thing of Bond that you can like iterate and test this thing. You’re like, I don’t know if my customers really want this thing. Well you can test in a couple of months and you’re like, oh, that thing didn’t work. Well, good thing I didn’t spend $2 million doing it. I spent like 50,000, done. And then you shut it down, if you need to. We’ve never had a customer shut anything down, but just because it’s like so incredibly useful. And if you’ve got a really great set of users who like you and who are constantly going to your website or your app, you have the built in opportunity to offer them a financial product, because they’re going to be thinking about you all the time. And you probably have a really tremendous amount of data about them, but not enough to be able to give them really, really great offers. Once you have like their transaction data. If you offer them a debit card that’s tied to their bank account, you can see all the transactions they make and then you can get really granular and start to target them or market to them in a different way, which is really powerful for companies.
– [Chris] I see. So that’s the play `cause I was just thinking, well okay. I mean I see retailers all the time. Like, hey, buy the Lowe’s gift. I think Lowe’s has their own credit card maybe. But so I see that I always decline it ’cause I figure it’s just a data play, but is that the win for Home Depot? The reason that they would do it is that transaction data and the ability to better understand their customers or is there some financial gain that they would have if I be wielding my own Depot Card?
– [Brian] Yeah, so there’s this thing called interchange, which you may or may not know about. Which is every time you swipe your card, the merchant pays between two and 3% of the total cost of that transaction, which you think is kind of a small amount, but it actually for large retailers, it can be billions of dollars. And in fact, interchange is like more than 100 billion dollars across the entire economy. And that’s what funds your cash back. That’s what funds your points on Delta or you whatever the hotel chain is that you are a member of. So that is huge. And the businesses, if they don’t have to pay that, because they have their own card, they can save a tremendous amount of money. One of our customers is a very large system of hospitals and they are going to be building on us because they have a billion dollars in reimbursements that flow through their system every year. And if you’re talking 2% of that, that’s $20 million right there that they could save instantly, which is pretty amazing. But at the same time, if you use that card, if you’ve got the Home Depot Card and you’re using that at Best Buy, Home Depot actually gets a slice of that too. So they get, you know, 2% or 1% of that, that purchase that you just bought your TV. So that was 1,000 bucks. Well, they just got 10 bucks on that. Thank you. So it’s a pretty impressive amount of money they can make and they can also save a tremendous amount. But also yes to your point, the data is really valuable.
– [Chris] So the concept of like buy a Home Depot or sign up for a Home Depot or Sears Credit Card or whatever has been around for a long time, both because of financial, sounds like there’s a savings element and there’s a gains element. Bond just makes it super easy.
– [Brian] Exactly. Yep, exactly right. And it’s funny because the Sears Card, had the same discover, if you remember that.
– [Chris] It’s like the way Elon Musk did for space rockets kind of, just made them easy and just made it work and inexpensive. And so how does Bond make money? By taking a smaller, I wanted to rakebook, what is it called?
– [Brian] Interchange.
– [Chris] Interchange.
– [Brian] Yeah, we can do that. We actually charge a base fee. So, it’s like, here’s a fee that we charge to the brand every, we call them brand every month, and then a per account or per transaction fee as well, which could be like, for an account it could be like, I dunno, 50 cents a month or something like that. And if the brand doesn’t want to do that, then we can be flexible. And so we can say, okay, cool. We’ll take a piece of interchange as well.
– [Chris] Interesting. So last question, this is fascinating. I’m going to let you go soon though, I promise. So for, I mean, when you’re dealing with like massive credit card fees, like in the billions, like Home Depot, it makes total sense, for a smaller player like us, I mean we pay what we consider to be a large amount in credit card processing fees. it’s like five figures monthly probably, right? Does it make sense? Like would it make sense for us would be like, oh, hey, by the way, there’s a web mechanics card, Mr. Customer like pay with this and like that would save us money, but why would the–
– [Brian] Probably wouldn’t, yeah.
– [Chris] It won’t make sense.
– [Brian] I don’t think it’s going to make a lot of sense for your customers unless your customers are constantly coming to you and are repeatedly on your website and you have a lot large number of them. Because it is an investment, you do need developers. Right now, we’re building out some low-code and no-code solutions, but you do need developers to be able to integrate our product into your solution. So it’s a set of APIs and they’re really simple and very elegant, but you still need a developer who can put them into your code. But I think if you’ve got like I said, you’ve got to really, if you’ve got loyal and hopefully a large or growing customer base that has a financial need, then yeah, I think it would make sense for you. But it really should start with a customer need. Not just like, hey, I want to make a bunch of money off of my customers. Like that’s where we going to end well, but I think that you can probably do something which is like build out something that’s going to be very valuable for your customers. And hopefully as your customer base grows, then it just becomes a nice sort of side benefit inside business for you like a side hustle, if you will.
– [Chris] Got it. Cool. Well, that’s fascinating. I really enjoyed the conversation. I will let you go, but if you are listening to this and you like it, I would say definitely check out Brian on LinkedIn, as well as bond.tech. It sounds, I mean, I’m pretty much sold. I almost want to learn more.
– [Brian] Sound great. Contact us on bond.tech. Happy to talk to you.
– [Chris] That’s awesome. All right, Brian. Well, you have a good day and we will be in touch soon.
– [Brian] Awesome. Thank you very much. Take care.