As 2020 draws to a close, I wanted to take the time to share some reflections on the past year, what we’ve done, where we’ve learnt and address some of the items that we’ve seen in the media. Below you’ll find information on how we’re consumer obsessed, understand our business model, our marketing approach and our merchant guidelines. I am reassured to be writing this at the same time as the ASA have published their new guidance on advertising delayed payment services and I’m encouraged for the most part that our approach and guidelines reflect this update. We have a team in place auditing all marketing content to ensure any further changes are addressed well ahead of the March deadline, We will continue to update our guidelines throughout.
We are proud to be different, we are proud to be pink and stand out in a sea of boring blue, we know we speak and act differently than your typical financial institution – we are a bank ourselves but took a conscious decision to stand out because how those institutions communicate and what they offer is outdated and consumers demand more. This does not mean we are any less serious about what we do, and what we offer consumers – we don’t believe in jargon and speak to our consumers in a language they can relate to.
Our consumers are our number one.
First and foremost our consumers and their wellbeing are our number one priority at Klarna. We take any suggestion to the contrary incredibly seriously. We have never and will never jeopardize nor take advantage of our customer’s wellbeing, our products are designed for financial empowerment, financial flexibility and control. We have created a better alternative to other products on the market such as credit cards with our customers at the heart of this.
That is why for our two most popular products (Instalments, Pay in 30 days) there is no interest and no hidden or late payment fees ever for the consumer. . This statement cannot be said for all of our competitors, but this isn’t widely known – and it should be (check their T&C’s 👀) – hopefully last night’s update from the ASA means that this will change! On that note, we fully support that this information should be clear and transparent when marketing any deferred payment product (more on that later).
Your feedback is important to us.
We regularly engage with and speak to our consumers as part of our Consumer Councils and undertake regular surveys in our app (interested, we have some info on how they informed KlarnaSense and our Christmas campaign). We don’t pretend to know it all and really value this feedback on our offering, marketing and products. We use the information to implement changes and inform our strategy, we’ve even introduced product enhancements as a direct result of these including Additional Reminders and One Time Passwords.
Alongside product enhancements, our consumer council has also led to the creation of entirely new features including the spending insights and a budgeting tool available in our app. Budgeting, planning and responsible spending is extremely important to us, and why we launched KlarnaSense (our biggest media investment in 2020). This isn’t something new for us, at Klarna we’ve been committed to money management for some time, launching our Mindful Money blog in 2019.
If you are interested in registering or providing feedback, please fill out this form.
We are consumer obsessed.
At Klarna we are consumer-obsessed. All of our products and marketing are designed to make our consumers’ lives better, and we take this responsibility extremely seriously.
Through regular engagement and conversations with our wonderful consumers, we identified earlier this year that you believed representation in the fashion industry wasn’t what it should be. We took that on board and designed a campaign for everyone, demonstrating that fashion isn’t just about what you look like, it’s how you feel and that anyone should be able to wear the clothes they love. Haven’t seen it yet? Check out the video!
Listening to our community really worked! Your feedback was phenomenal and your love of 90’s garage even crept into our Christmas campaign where we re-recorded the famous 2Unlimited track with a responsible spending message (yeah sounds weird, but it totally works)! Try and get this jingle out of your head.
Our marketing in the news.
We are aware of various times that our marketing has hit the news, sadly not always for the right reasons. We have held up our hands on issues such as the human error with our newsletter and have been open in letting you know exactly what happened and taken steps to ensure this never happens again.
We have tried incredibly hard to take on board the situation that we have faced in 2020. We were voted one of the UK’s 10 most loved financial services brands and won an award for our social campaign at the start of the first UK lockdown.
There is a live ASA investigation which we expect to be upheld into four of our influencer posts from earlier this year. The intention of these posts was to reflect the mood of the country when we entered the first lockdown, and support our community with self-care/ daily routine tips. No consumer complained about these posts, however, we appreciate that we these posts whilst having good intentions may have missed the mark and that the inclusion of our old brand hashtag #KlarnaIt was not appropriate and could have been misinterpreted. This # has since been removed from use.
Our view on influencer marketing.
Marketing in 2020 is different. Instead of traditional forms of media such as Out Of Home (billboards, outdoor advertising, on buses, tubes etc.) messages have to reach people in their home environments.
Influencers are extremely important for this, and should be viewed the same as any targeted media. We only work with partners who we have approved and have a relationship with. That being said, we have recognised that as our business has evolved a lot over the past couple of years, and our influencer strategy needed to evolve as well.
We have shifted our strategy to now work with larger brand ambassadors, and individual influencers for campaigns on topics that they are particularly passionate and about for example, Beauty, Sneakers etc.
Whilst we always adhere to all available ‘influencer’ guidelines, and are compliant in terms of partnership signposting, we support more clarity in this space. This is a frankly a bigger topic than us, it’s across brands and sectors regulated or not and or we believe some leadership on this is required, we are setting up an influencer thought leader council consisting of media owners, consumers, wellness charity partner and influencers with the intention of providing better guidance for all brands in this space and in doing so support and engage with the ASA on this topic. It is important to acknowledge that there is accountability on media owners to support here too as their platforms are global and influencers reach multiple regions.
Our view on responsible financial marketing and how we work with our merchants.
We believe it is critical that we are always transparent with our approach to marketing, and we adhere to all FCA and ASA guidelines.
Our core principles:
- We believe that it should be clear upfront if there are any associated fees when using a deferred payment option. This is always presented in our communications and is very clear in our merchant guidelines for our partners to also communicate. These guidelines have been available since our UK launch and are updated regularly. The last update was made in September.
- When promoting our products we always have clear legal sign-posting (above what is required for our unregulated products), to ensure consumers are aware of the responsibilities
- FAQ’s are essential. For any of our partners (and ourselves), we believe that transparency is key and having the information at your fingertips is important. Every brand we work with has an FAQ page, and if in any doubt, consumers can visit our FAQ’s or check out our handy mythbusters for extra assistance
- When we are unsure, we ask for help! If we are in any doubt, we leverage the ASA’s bespoke copy advice service, a superb and free tool and we encourage all our competitors and partners to do the same
- In 2020, our money management campaign KlarnaSense was our biggest marketing investment and we recognise as our business grows we have a responsibility to educate our consumers and moving forward educating in this space will make up 50% of all our marketing efforts.
- Lastly and something frustrates me is the misconception on our branding. Our branding is not targeted at the young. Klarna is for anyone, over the age of 18, who values convenience and flexibility. The average age of a Klarna consumer in the UK is 33 years old and the fastest-growing demographic is in fact Generation X (40-54 years old). Our data tells us that shoppers of every age are embracing more flexible payment options and naturally our branding does and needs to reflect that.
We work very closely and openly with our merchants and we are happy to share how we do that. Here you can view the guidelines (regulated and unregulated) that we provide to support them if they wish to promote our products. We’ve had these guidelines since our launch in the UK and review them on an ongoing basis. We regularly update and distribute these guidelines to all our merchants and support with any questions they have, we have a dedicated team working to support them in this. Just look at some of their awesome work recently from some of our partners using these.
We have a zero-tolerance approach to those that abuse our brand, undertake non-compliant advertising (we always get in touch if we spot it) or do not adhere with our guidelines. For these, we remind our partners of their responsibility and encourage them to train all members of their teams on best practices.
For our brand activity, education is critical for establishing responsible spending behaviours. To help drive this education we re-target all brand comms with a responsible shopping message.
Our business model.
It’s important to acknowledge that our business model has changed, evolving from a payments provider to become a shopping service. Whilst we are clear on this shift, we are conscious that consumers might not be. Therefore we apply the same legal signage to all comms even when we’re simply promoting a shopping feature e.g. wish lists.
As we have shifted, we’ve also changed the way we discuss our products in line with our core principle of applying KlarnaSense to purchases. New product features, such as wish lists are designed to ensure people save an item vs. impulse buying – and since launch 8 weeks ago, over 80k wishlists have been created.
Watch this space.
Whilst 2020 has been an incredibly tough year, we’ve enjoyed brightening up newsfeeds, airwaves and TV screens. Our brand is awesome, our merchants are THE BEST and our consumers are EPIC! We can’t wait to share more of our amazing journey and smoooth ideas with you in 2021.
AJ Coyne, Head of Marketing UK
P.S. Pink is for EVERYONE.