Selling exclusivity - CRED ft. Jim Sarbh

Back in 2018, Kunal Shah launched Cred as a fintech solution with the aim of simplifying the complex financial structures in the country. Today, Cred isn’t just an app - it’s an exclusive, elite club.

In this piece, we analyze the unique approach followed by Cred to acquire and develop its customer base. If you don’t know what Cred is, here’s Jim Sarbh to explain it in under three minutes.

Welcome to the Club

If you were launching a credit card bill-paying app called Cred, what would you call your website? cred.com? cred.in? (cred.pay, maybe?) But Cred is more than that - it is a member’s only club, which only allows you in if you have a credit score of more than 750. And interestingly enough, Cred’s website is called cred.club

Simple is Elegant

Simply put, Cred is probably the most beautifully designed app I’ve used in a long time. The UI is so sleek, clean, and simple; the experience feels premium. Both the website and the app have an elegant dark theme with contrasting colors and minimalistic yet bold fonts. The user experience seems to be designed not to please the masses but a section of users who would appreciate the stunning design - following the club strategy, the designers understand why they are building what they are building [1]

The eliteness doesn’t stop there. In the ad you saw earlier, the set design, the furniture, the décor, the two-tone color palette, all have a minimalistic, elegant feel. Even the celebrity endorser Jim Sarbh is not your everyday mainstream actor; his look and accent are quite posh. All this points to how Cred is keeping it simple, elite.

Not everyone gets it

Talking about celebrity endorsers, in the past two months Cred has released 6 ads featuring mainstream star names - Anil Kapoor, Madhuri Dixit, Bappi Lahri, Alka Yagnik, Udit Narayan, Daler Mehndi, and recently Govinda - with a common theme of the celeb going over the top to audition for Cred and the Cred team rejecting them and doing a simple voiceover instead. While the campaign is funny and manages to capture the audience’s attention (autopsy here), the interesting thing is that it is named ‘Not everyone gets it’. In my opinion, this ties in very well with their elite club strategy - not everyone will be a member. Imagine a club so elite that Mr. India can’t get in (but maybe you can)

So how do you get in? Even with all its embellishment, all you need to do is to have a credit score of 750 or more to be a member of Cred. How difficult is it to get (and maintain) a score of 750? Here are some stats to put things in perspective. According to a 2019 paisabazaar.com report [2], 62% of all borrowers who take a consumer loan have a credit score higher than 700, with 48% having a score higher than 750. And since this sample had 23% people who were new to credit and did not have a credit history, adjusting that 81% of the borrowers having credit history have a score of over 700 (62% over 750).

Hence, if you pay EMIs and credit card dues on time, and keep the credit utilization ratio (CUR) low (at 30%), it will not be difficult to get into Cred - the 3 million userbase of Cred (as of Aug 2020) is a testament that the club is not as exclusive as it sounds.

So why say it’s exclusive?

In my understanding, the bigger the userbase, the higher is the revenue for the company - it is difficult to make money from a free app if you target only a small segment of the potential customers. However, with a huge userbase also comes the issue of the quality - inactive users, sporadic usage. If Cred focuses on getting the platform to the masses right now, it would need a lot more reward partners it currently has, and possibly much higher investments. And if the customers don’t value the platform, it might go belly up like those many coupon websites that incentivize users for basically nothing. But if Cred can lure them in such a way that they value being a part of the platform it will become much easier for them to retain a good customer base. And if in the long run, it has a healthy user base with good credit scores (essentially improved financial practices like timely payment) and incentivizes them to use their credit card more, it can leverage this increased usage with its new offerings like Rentpay and line-of-credit.

What Cred has understood beautifully is that people want to feel validated. When a user downloads Cred and checks his score, it feels good to see a score of over 750. This can be explained by the Dissociative Group Theory; Cred had essentially divided the entire population into two groups - users having a score over 750 who can get into Cred (Group A), and users with a score below 750 (Group B). Group A and B can be differentiated based on their financial practices and people do not want to be associated with Group B - people who will find it harder to get a loan or obtain a credit card. Hence even if someone has a score below 750, they will most likely try to increase the score and get into Cred.

By adding this barrier Cred has made people feel worthy of being part of the “club” and this play on exclusivity will help the company get a healthy user base - every member worth their money - and generate high revenues in the long run.

Let us know your thoughts in the responses. For more interesting campaigns and analysis, follow Nacho Marketing!