N26 Digital Bank: Customer Segmentation

Before we move onto the marketing strategy, I just want to refine the question on market segmentation. How did you segment the market, in the early days?

People are always saying, data driven here, data driven there. Thank you very much, but when I join, we had no data. What do you do? You make a hypothesis. We say, when we start, what do we think would be an interesting target for us? People that are between 18 and 20, and you can do the targeting, particularly on Facebook. We said, let’s just bombard them with social media ads and it didn’t work out. We were spending lots of money, but people were not signing up. So you tried different ages. We were doing two-week campaigns and then we reviewed the data, so that we could see different cycles and, basically, some dates where we had some announcement or maybe it was a holiday, so you had a lot of different variations.

Then we found out that the best years were from 30 to 40, because people were actually working and they wanted to better understand how they were spending money and they actually had money, which is funny to say, but it’s true. Actually, in Italy, it was always 35 to 45, because we started working much later than the average in Europe. So that became, after a while, our main market, in terms of age.

From there, you can start making other hypotheses. They can be more focused on professions, once we understood that many entrepreneurs, they loved us, because they were spending money, they were using us for their business so we kept looking at them. We asked them about the service, many times, to get some more qualitative data, as well, from the clients.

At the end of the day, this is how we did targeting. We tested hypotheses and sometimes they worked. Sometimes they didn’t work, but when it did work, we were doubling down on those specific targets, so that we could increase and penetrate those specific segments much better.