Think Well, Think Different: Get Ready To Partner Your Life With Brands

Think Well, Think Different is a series of columns devoted to discussing trends in fintech, both from the consumer and founder points of view. Click here for previous columns. 

They say there’s no such thing as a free lunch; there’s a cost, however minor, to the transaction. 

It’s why you can acquire a celebrity endorsement but have to sacrifice some credibility, however minor. It’s why you can buy market share, simply by lowering your price, but risk sustainability. It’s why whatever incentives you create for current customers to refer your product to new customers, it just isn’t the same as a spontaneous I-have-to-tell-you-about-this-thing moment.

In this no-free-lunch world, there is one valuable partnership, perhaps the most valuable partnership, you can buy—the exclusive kind.

Even savvy consumers cannot avoid your business if you have the product, perk, or opportunity that they want. The entertainment industry has long understood exclusivity. Locking in the star or act ensures the audience has to come to your movie or your casino. More recently, this has been happening at streaming platforms. Netflix, Inc. NFLX landed Dave Chappelle for his stand up specials. They compete with Hulu, Amazon.com Inc AMZN Prime Video and HBO for original talent and programming much the same way studios used to compete for intellectual property rights just a few years ago.  

Forbes recently noted that food delivery platforms are now following suit. Postmates, DoorDash, GrubHub Inc GRUB and Uber Technologies Inc’s UBER UberEats are all advertising their unique partnerships, as they attempt to land exclusive arrangements with chains or celebrity chefs. Most of Jay-Z’s music is only available on Tidal—you can’t find Empire State of Mind on Spotify Technology SPOT (which itself is packaged free with Hulu’s family plan). You can see how these partnerships build on one another. 

Traditionally, this is a tried-and-true model of the consumer finance industry, specifically when it comes to credit cards. Rewards programs, such as frequent flyer miles, has created some alignment between card and brand. So it stands to reason that what started in consumer finance will come all the way back around to fintech.  

Creating Partnerships In Fintech

The Apple Card is a start, but not the full development of the idea of exclusive partnerships in fintech.  Apple aligning with Marcus to deliver a branded card and account fails to bring the consumer something they can only get from Apple. It’s convenient and well-designed, but not exclusive.

Consumer banking, mortgage lending, and online payments have not had success with exclusivity either.  That’s all about to change. In order to deliver the best results faster, companies need as much information (or data) about the consumer as they can get. Even with data tracking and data sharing available through mobile apps, browsers, and brokers, companies still are not able to proactively identify guaranteed offers to consumers.

Take the credit card model and expand it to all consumer lending products.  

The digital application process for consumer credit, even mortgage loans, is getting better and better. Consumers are getting a credit decision in less and less time.  

Unfortunately, it still requires the consumer to apply. As a result, consumer lending is always reactive. 

To become proactive, fintech platforms must evaluate consumer data in an ongoing underwriting model that allows the lender to offer a proactive credit decision before the consumer needs it.  The truly ideal scenario would be having real-time access to the consumer’s financial information to extend the right product at the right time to the consumer just before the moment they decide to shop. 

Now, before you say this isn’t possible or cite data privacy concerns, remember the benefits and attraction of exclusivity. Right now, I’m willing to let Google scan my online activity – from incoming and outgoing personal email to browsing history—in exchange for a free email address, unlimited storage, and a convenient file and photo storage app.  That’s a great deal for me.

To incentivize consent and participation in these financial data ecosystems, providers will need offers and perks. Whether they be checking and savings accounts or mortgages, in exchange for consumer activity, web browsing history, financial records, and credit history, the consumer will receive a dynamic credit limit, exclusive offers, and customized opportunities.  

Exclusivity Is The Future

Credit card companies have all adopted this model to the point that rewards have become standardized: 1% cashback has become 3% cashback. For the most part, differentiation is in brand and convenience/access to the reward points, and not in the value of rewards. Expanding rewards and perks to all of consumer finance could change that.

Prime credit consumers, with the value of their own data and activity in hand, can create or select their own preferred network of exclusive partnerships. 

Take Walt Disney Co’s DIS Disney+, for example. Consolidating all the rights and licenses to the entire library across multiple channels, brands and franchises takes time and will continue even as some titles remain available for a short time into the future.  Ultimately though, the app will be the exclusive provider of almost all of Disney’s massive library. Imagine now that Disney teams up with a web browser or payment card. Use Google Chrome and Disney+ is free! Pay with the Disney Card and Disney+ is free.

We’re still early in the exclusivity game, but it’s coming on strong. Like we did with credit cards, consumers will align themselves into exclusive two-way relationships with specific ecosystems—we get their services, they get our data. 

The next race for data is a race for exclusive partnerships. Game on.

Photo by Nathan Dumlao on Unsplash