By Nnamdi Odumody
Cash App, the digital wallet owned by financial services technology provider Square, utilizes a viral marketing approach such as Twitter, podcasts and e-Sport teams to acquire users at a very low cost. Its recent partnership with Burger King on Twitter saw the fast food giant pay for a random user’s student debt through its platform. The Burger King tweet went viral and attracted nearly 100,000 responses from users.
Square’s (NYSE:SQ) Cash App has grown to become a meaningful contributor to the company’s top-line growth. The peer-to-peer payments app turned financial multitool is the No. 1 driver of its subscription and services segment, management said at the J.P. Morgan Global Technology, Media and Communications Conference.
During that conference, CFO Amrita Ahuja noted the company’s per-customer acquisition cost for Cash App is about $20. That’s actually quite low relative to other financial services, and even compared to other apps. Banks give out bonuses worth hundreds of dollars for customers willing to open a new checking account or credit card. Uber Technologies (NYSE:UBER) spent $3.2 billion on sales and marketing last year to grow active consumers by 23 million — $137 each — although some of that marketing spend goes toward attracting drivers, too.
Not only is Square attracting consumers at a relatively low price, but Cash is also growing quickly. The number of monthly active users doubled in 2018, reaching 15 million by December. If Square can continue attracting users at this rate — in terms of both growth and acquisition cost — it should be able to make a strong profit off the app’s users in the long run.
Cash App also sponsors series of podcasts. A strategic partnership it irked with 100 Thieves, the E-Sport Team, saw its founder distribute money on Twitter through Cash App. Hip-Hop artistes Lil B and Travis Scott also followed suit in 2017, and 2018, as over 120,000 followers commented on a tweet by Travis Scott.
Cash App’s Twitter marketing Cash Fridays is another successful strategy by the brand. It’s official handle sends out a tweet for followers to comment on with their tag and allows them win money through Cash App. On May 24, over 80,000 people commented when $10,000 was distributed.
Its recent engagement on Twitter indicates that it should be able to retain its 2018 115% year on year Monthly Active User growth.
Cash App’s marketing strategy makes the cost of acquisition of new users to be about $20 against the $350-$1500 conventional banks spend per new retail checking account.
Nigerian brands can learn from this unique marketing approach in acquiring customers for cheap.