Pod Summary: How Wise created a word of mouth machine
October 25, 2023

Episode: Lenny's Podcast: How to drive word of mouth | Nilan Peiris (CPO of Wise)

Wise , a global leader in cross-border money movement, generates ~70% of their growth through word of mouth.

For context, Wise has 16 million customers and are acquiring about a million a quarter.

So for every million users that join Wise for the first time, 700,000 found out about it from a friend 🤯.

In an interview with Lenny Rachitsky, Nilan Peiris (CPO at Wise) discussed how they were able to drive word of mouth in a hyper competitive market.

Here's a breakdown 👇

Why they prioritized Word of Mouth from the start

Wise was competing against large incumbents in the hyper-competitive space of cross-border payments.

They differentiated by offering lower prices for a superior product.

In a world with already slim margins, this meant they had less cash to throw at marketing.

These constraints forced them to be innovative – creating a brand-led approach and remaining hyper-focused on customer experience from the start.

But the question still remained: With less margin to spend on paid marketing, what channels are scalable, can reach our entire audience, but have an incredibly low distribution cost.

Hint… it's word of mouth.

How to make a product so good that people will use it, but they'll also recommend it?

According to Peiris, it starts with “listen to your customers”.

Customers kept telling them the same thing: “Make it faster, cheaper, and easier to use.”

So they focused their KPIs on these three metrics and analyzed what turned customers into promoters.

“When we entered the US for the first time, if we entered with a product that was priced at 5.9%, and the alternative was 6%, customers would use us, but they wouldn't talk about us. We only got the advocacy when we were 8-10x cheaper. That's when people started talking about it.”

This means you have to create a product or experience that 10x better than what already exists.

Ok great... But how do you measure it?

Ask!

Wise started with a familiar metric: Net Promoter Score.

Ie - Asking your users, “How likely is it that you would recommend [company] to a friend or colleague?”

Things got interesting when they overlaid their referral program data.

“We had very low invite rates at 1 to 6 (detractors), but when you got people to the 7 to 8 group (passives), they doubled the number of people they invited. 8 to 9 they doubled again, and 9 to 10 they doubled again.”

So by increasing NPS score from 30% to 50%, you increase the viral coefficient of your customer base – every customer you get invites X many more customers.

The ROI on increasing NPS is absolutely huge.

What folks typically get wrong about word of mouth

Companies often try things that have already been done before, just incrementally better.

But for word of mouth to work, you have to build a 10x better product.

If you want to create word of mouth for your business, start by asking yourself, what would it take to create a 10x better product than what already exists.

“So the next step becomes these much harder types of questions like, what is the theoretical minimum cost for moving money into a market? What is the theoretical maximum speed? Not just make it instant, make it cheap. What actually is the lowest it could possibly be? And instead of incrementally doing a jump to make it a little better, a little better, a little better. How do we take two years and end up there?”

You need to work backwards from the ideal and ask yourself, what would it take to get there?

It’s usually the thing that’s obvious, but everyone thought was impossible.

Then it’s your job make it real.

If you liked this blog, you can listen to Lenny’s episode here, or sign up for his newsletter.

This post was created with Wysper.ai

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