How TransferWise uses big data to power its social media marketing

Growing a company without a big advertising budget isn't easy. TransferWise therefore uses word-of-mouth and social media marketing to push its brand - with a little help from big data

International money transfer start-up TransferWise doesn't bother with advertising, or any other traditional means of publicity and driving custom.

Instead, it prefers a combination of word-of-mouth and social media, spread by its customers as a means of scaling the business without spending a fortune on marketing. After all, payments is a volume business and the quicker that TransferWise can reach a critical mass, the sooner its venture capital backers will be able to cash out.

However, achieving this is no easy task, admits Nilan Peiris, vice president of growth at TransferWise, and the architect of the strategy, who was speaking at Computing's Big Data & Analytics Summit 2015 this week. "We try to drive ownership and pride in our product. We market to existing customers and see whether they tell their friends in order to keep our growth rate going," says Peiris.

Instead of being organised in a traditional corporate hierarchy, TransferWise is organised into autonomous teams with specific objectives and key performance indicators (KPIs). "No one tells a team what to do. The team decides what it's working on. One of our teams is the currencies team. It launched 18 currencies in the last quarter, but that team figured out which currencies it was going to launch. It's KPI is volume of transactions between new currency corridors."

Each team has domain specialists. Hence, the currencies team, for example, has former bankers to open and manage accounts in different geographies, developers, product specialists, user interface experts - and data scientists.

But it is the marketing that is the key to the company's growth, argues Peiris.

Initially, this starts with simply monitoring the website for commonly requested transfers - not only does this tell the company the routes that might be popular, but by serving a form at the same time, it enables the company to build up a database of people who might also use the service when it is launched.

Going viral

In addition to product-focused teams, it also has a "viral team" to work purely on encouraging people to publicise the company.

"We measure something called the 'viral co-efficient'. This means that for every 100 customers that join TransferWise, how many new customers did they tell about it over the next three months?" says Peiris.

Not surprisingly, this can be visually mapped so that the viral team can see how viral marketing actually works - with a small number of highly vocal people - "super inviters" - literally persuading hundreds of other people to try the service. Most, if they are happy, will persuade a few, while a much larger number will keep it to themselves.

"That's actually quite complicated to measure you have to do proper cohort-based customer analysis on cohort-based customer data so that you can really understand that this person invited these people to use the service, and understand how that works," says Peiris.

This is one of the ways in which the service gained traction almost as soon as it was started up. "The first thing that we came up with to try and encourage customers to tell their friends was a referral programme: invite three friends to TransferWise and get fifty quid... over time, we started to get some pretty cool data out of it," he says.

But gaining insight is one thing, moving on to action is quite another, warns Peiris. "Once you have got down to these different kinds of people, the question is, what are you going to do about it? The only way you can do that is by talking to them," says Peiris.

What he found in the process was a broad cultural difference when it came to incentive programmes. So, for example, some people were put off by the idea of recommending a service to people for their own financial gain - recommending a number of people and getting £50 when they used the service.

"Lots of people were really uncomfortable around the idea of telling their friends, 'Hey, use TransferWise and I'm going to make some money out of it when you do'," says Peiris. Swedes, for example, were generally quite reticent about doing that, but Indian people very enthusiastic, according to Peiris's data.

In response, therefore, TransferWise devised an incentive scheme that split the cash - £25 for the recommender and £25 for the friend. The company also found that you could predict to a high degree of certainty who would recommend their service based upon their frequency of use and how long they had been customers.

High score

TransferWise uses a metric called the "net promoter score" in order to assess the effectiveness of its social media marketing. "We systemically ask our customers, 'would you recommend us to your friends and family' on a scale of one to 10. Anyone that gives you a 9 or a 10 we call a 'promoter'; anyone who gives you a 1-6 we call a 'detractor'.

"You can assume that the detractors go around saying, 'Hey, don't use TransferWise'. And you can assume that the promoters go around saying, 'This thing is amazing; it's changed my life'. You take the detractors away from the promoters and then express it as a percentage of the total."

There are also industry benchmarks for the net promoter score, with Apple and Google pegged at around 70 per cent, while the travel industry as a whole has a net score of zero - the positive message circulated by promoters is cancelled out by the equally well-circulated disgruntlement of unhappy customers.

"Very simply, if you have more promoters than you have detractors then the business grows itself," says Peiris.

But while every team may have its own KPIs to guide their activities, the main one that counts above all others is user growth, says Peiris. Because regardless of how well the "buzz team" creates publicity or the viral team encourages customers to spread the message, it's all for nought if it doesn't help the company to grow and achieve profitability.