Have you ever wondered what makes a successful fintech marketing strategy? In our "How they did it" series, we look at how some of the most successful and exciting fintechs in the world have approached marketing in their early days. This post reveals the launch story of one of the most successful fintech startups in the US, Coinbase.
Coinbase introduced an affiliate or referral programme to encourage users to promote their product to their networks.
Reach your target market and grow user base through affiliate or referral partnerships
As part of their launch strategy, Coinbase introduced an affiliate or referral programme to encourage users to promote their product to their networks. For each referral that successfully converted to a client and initiated a buy or sell of minimum $100 USD in the first 180 days of opening an account, Coinbase was paying a $10 USD bonus/commission to both the referee and referrer. The hefty commission attracted many industry bloggers and influencers who started spreading the word and promoting Coinbase through their channels.
At some point, after raising $75m in a major funding round, Coinbase even increased the referral commission from $10 to $75 for a limited period, which attracted even larger affiliate interest.
Affiliate or referral marketing is nothing new and it’s been successfully used in digital marketing ever since the introduction of e-commerce in the late 1990s. But what exactly is affiliate marketing? It’s simply the process of creating partnerships with third party marketers (‘the affiliates’) and incentivising them to promote your products or services by offering them a commission for each conversion they generate. Affiliates can be professional marketers and media owners (i.e comparison sites) or industry bloggers and influencers.
Nowadays, affiliate marketing is a common growth tactic used by companies at different stages of their development, but mainly at launch as part of their go-tomarket strategy. By selecting and partnering with affiliates who have strong relationship with people from your target customer segment, you will be able to reach your target market in a quicker and direct way, as opposed to other distribution channels such as search ads or content marketing, where you would have to wait for your target audience to find you and then gradually build your own relationship with it. Besides providing direct access to your target market, affiliate partnerships also offer a quick way to earn consumers trust through the affiliates’ endorsements and a less risky acquisition tool as the risk of failed conversions is covered by the affiliate.
Coinbase is a US fintech start-up that was founded in 2012 by former Airbnb engineer Brian Armstrong and Goldman Sachs trader Fred Ehrsam. It provides a digital currency wallet and platform where users can transact with new digital currencies like bitcoin, ethereum, and litecoin.
Currently, Coinbase operates in 32 countries and serves about 20m customer accounts. In just a year since launching, Coinbase became the highest funded crypto startup and is now the biggest exchange across the globe, partnering with a number of centralised tech giants, payment processors, and retail stores such as Dell, PayPal, Stripe, Braintree Dish Network, and Overstock.