Years from now, it will be next to impossible to explain to a younger generation what the ‘meme stock’ era was all about. One could refer them to Ben Mezrich’s excellent book ‘The Anti-Social Network’ or its screen adaptation ‘Dumb Money.’ The Cliff’s Notes version is that a global pandemic shut off the outside world, and people were bored. Where do bored people hang out? Online, of course!

The Anti-Social Network covers the saga of Reddit’s board WallStreetBets, where a bunch of amateur investors backed losing stocks (i.e., AMC Theaters, a movie theater chain during a pandemic) in an attempt to boost their price, which in turn would cripple major investors and hedge funds that had taken a short position on the securities.

It may seem a little ridiculous when it is written out, but the fallout from this viral trend was a significant win for FinTech firms. Robinhood alone surged to 13 million users, many first-time investors in their 20s and 30s. The rise of this amateur day trading also coincided with the peak of other financial assets such as crypto-currency and NFTs. Folks on social media started spewing terms like ‘diamond hands’ to prove their risk tolerance and ‘To the moon,’ which is where they all assumed their investments were heading.


The fallout of WallStreetBets and the GameStop boom


What happened? A few people got very rich buying up AMC, GameStop, and cryptocurrencies such as DogeCoin. A few whales (large investors) and big banks got crushed, but the majority of folks rode out the viral trend, winning or losing a few bucks, and then carried on with their lives when the world re-opened. It seemed like a fun, legal gambling trend to be left in 2021.

But today, we look at what happened to FinTech services in the aftermath of this viral moment. One of the positive consequences of this whole trend is that it got a lot of millennial and Gen Z folks thinking. Thinking about financial health, how markets work, and how they can leverage markets for long-term economic growth strategies. Given that many fintechs operate in this space, it was great, even if it amounted to brief exposure.


FinTechs thrived during the pandemic but have experienced churn


It’s not a surprise that there was churn. Robinhood alone lost 1 million monthly active users in the second quarter of 2023. But it’s not just the companies that rode the meme-stock wave that are getting hurt. Many FinTechs boomed during the COVID lockdown and are now plummeting down to Earth. Buy Now, Pay Later companies like Affirm have seen their stock price plummet in recent years after peaking in the pandemic through lucrative partnerships with brands such as Peloton.

Traditional fintech firms such as Stripe and Paypal have been hit with layoffs. Chime and Fiserv have seen valuations drop below their 2021 peaks. In a world that was shut off, eCommerce and online financial tools were king. Still, it begs the question. Did the FinTech industry grow too big during the Covid lockdown and assume macroeconomic conditions would never shift out of their favor?


A high Customer Acquisition Cost calls for bringing home lapsed users


But these companies all have something in common that is a massive asset: user accounts. The customer acquisition cost in the fintech industry can balloon to well over $1000. This can be daunting when Wall Street demands both growth AND profitability. But the problem for FinTech firms isn’t that they never had users. They’ve just watched them slowly become inactive. This makes all these companies excellent candidates to run re-engagement campaigns.

We live in a world where data can sometimes be the most valuable asset. These companies have not only the name, email, and phone numbers of anyone with an account, but they also have transaction history, which means customized content delivered to lapsed users can provide value.


Examples of simple re-engagement campaigns for FinTech firms


A re-engagement campaign is simply a campaign that instead of trying to attract new users, finds current users who are inactive and persuades them to get back into the fold. There are three key steps to running a successful re-engagement campaign.

  1. Identify inactive users
  2. Find a reason to contact said users
  3. Re-state your value proposition or demonstrate new value

The first step is rather simple and can be accomplished by quickly auditing your CRM platform. The second is where things get a bit tricky because, as we know, using omnichannel communication works best when you are providing your customers with custom and relevant content on the channel that best suits them.


Crypto wallet/portfolio – Notifications for your re-engagement campaign


For some specific ideas in the FinTech space, let’s consider general notifications.

When it comes to FinTech companies that provide crypto wallets, mobile stock portfolios, or online banking services, users could have tangible assets on their platform that they just forgot about. Imagine how far a text message reminder would go.

“Hello, Sarah. Just reminding you that your current portfolio balance is $2,000. Your crypto holdings increased 3% in the last quarter.”

Now, it’s possible that Sara bought a bunch of crypto during the pandemic because she was reading a lot about blockchain at the time, but maybe now she wants to take her $2000 and invest it in a 5% six-month CD because she’s been reading about the soaring interest rates.

The point is, that simply alerting your users that they have assets with your firm is a great reason to reach out, and at its most basic, can reinvigorate some of your users.


BNPL – demonstrate new value in a re-engagement campaign


Step three discusses restating your value proposition and finding a new way to demonstrate value. For this, let’s look through the lens of a BNPL firm.

If you operate in the BNPL space and a big ticket item debuts that matches your customer’s purchase history, a simple note that advertises zero percent financing could, at the very least, remind your customers that you exist. If even a fraction of these lapsed customers re-engage, it’s infinitely cheaper than going after new users. The price of a text is less than a penny, and the industry CAC is >$1000. It really is a no-brainer.

For this example, consider a customer that bought home workout equipment during the pandemic.

“Greetings Eric, did you know that Affirm is offering zero percent financing on all Peloton workout equipment through the end of 2023. Click here to see the new offerings.”

In this case, we have re-stated the general value proposition. Buy now pay later firms offer easy financing of larger ticket items, with financing fees sometimes as low as zero percent. We have also demonstrated new value by linking to an expanded catalog customized to the user. The same premise could be used for a person who financed a PlayStation 5 for when the PlayStation 6 inevitably comes out.


Finding new channels and use cases for your re-engagement campaign


Consumers have been demanding more and more from the companies they do business with, especially in the post-pandemic world. A mature omnichannel strategy is one way to revitalize a lapsed user base. If you wisely obtained SMS opt-in at sign-up, you can ping users with new offers or products that have launched since they have been active.

In addition to marketing use cases, consider support use cases and always consider the channels you are using. What channels are we using to engage with our users? Are they the proper channels? Is the experience consistent? SMS is a solid gateway to starting a conversation with an inactive user. Still, in auditing the demographics of lapsed users, companies should consider whether chat apps such as WhatsApp or Messenger would also provide value.

The key for FinTechs is to re-establish communication. While many are sending emails, these are going to spam folders or quickly being deleted by your customers. Think outside the box and reach out on new platforms. Your hit rate won’t be 100. But this is low-hanging fruit and the cheapest way to drum up quick business. It’s certainly easier than waiting to piggyback on the next viral trend. However, if you set your omnichannel strategy up now, you can quickly pounce when that moment arises.