“Indira Nagar ka gunda hoon main!”
Cricket legend Rahul Dravid set the internet on fire in 2021 hurling these words in an advertisement for Cred — which later became the most viral ad of Indian Premier League that year. Who can forget when Jackie Shroff revealed his love for Zumba? Cred has even brought Zeenat Aman back on the TV. The fintech brand has leveraged yesteryears’ stars and their nostalgic appeal, using them in cheeky and surprising ways, and audiences, in return, never failed to appreciate them.
Cred has one of the most noticeable brand launches in the past five years with its communication being out-of-the-box, and has delivered on breaking the clutter and gaining mindshare.
However, while all this creativity bears good news for the brand, the brand has also been called out for its services. With some praising its functionality and earning potential, many have criticised Cred for payment delays and poor customer support. In particular, the criticism is directed at the shopping feature for its unfriendly user interface and lack of delivery estimates. Some users have reported issues with returns and called the app unsafe on customer review and feedback platforms like Kimola, Trustpilot, Mouthshut. X, formerly known as Twitter, has its share of critics voicing their dissatisfaction with returns and rewards. Customer feedback and market research platform Kimola advised caution when making purchases on the app as users on the platform have reported issues with returns and customer service.
It should be mentioned that, despite Cred’s expansion beyond credit card payments in recent quarters to include wealth management, e-commerce, travel, and automotive products and services, its user growth has plateaued at 13 million monthly active users (MAUs) over the previous 18 months. According to data tracking platforms, Cred’s user base hit 13 million in November 2022 and has been around this figure for 16 consecutive month s—in February 2024, the MAU stood at around 13 million only.
A recent report by Moneycontrol states that contrary to Cred’s initial image as an app for premium customers, that is the top 40 million affluent customers with high disposable income, the app has found it challenging to attract those customers. The report quotes a senior banker who says that among the most affluent customers, there is scepticism about Cred’s use of data and app permissions. “And their rewards or products are not enticing enough for these customers,” he says.
The high praise for Cred’s buzzy and viral advertisement campaigns comes amidst Cred’s flatlining user growth, increase in negative customer feedback, and a 5.3% increase in its losses to Rs 1,347 crore in FY23 from Rs 1,279.5 crore in FY22.
While it continues to make losses, its advertising continues to create buzz – but how sustainable is this model?
“Many start-ups do heavy investments in the early stages to acquire customers, whether money is to be made right now or later is a strategic call. What Cred should be more concerned about is the next business call to take. Increase MAUs or earn more from the current ones? Both calls have their own unique challenges and will decide how the brand and product will evolve and consequently their next communication strategy. But one thing should never change – the unexpected advertising Cred has always created,” points out Saad Khan, President and Managing Partner – Growth and Strategy, DDB Mudra.
‘Pivoting is important, but it shouldn’t feel directionless.’
Cred’s ads have done their job to a certain extent — everyone they want to reach knows about the brand. However, ads can’t be your business model; there needs to be something more that truly connects and sticks with customers, say experts like Himanshu Arora. “Right now, I don’t think Cred has achieved that yet,” points out Arora, who is co-founder of digital marketing firm Social Panga.
Cred had an interesting business model to acquire creditworthy customers. This is a niche and valuable audience segment – even if it is just 13 million users. So, if Cred indeed has this segment with them, then there should be a strong focus on understanding their needs, offering great value, superlative customer experience and motivating them to spend and use the app more, suggests Nisha Sampath, Managing Partner, Bright Angles Consulting.
Relying on advertising virality without product virality is not sustainable. At some point, people should be downloading your app because they need to and because people around them are using it and urging them to use it too.
Cred had product virality earlier, she adds, and they should try to get it back. Advertising alone cannot disrupt an industry and create growth. Only product and service offerings can.
Apple’s iconic advertising was promoting an equally iconic product. Buzz marketing is a strategy. But the catch is it only holds water when the actual product/service matches the hype you have created for it.
Rohit Varma, Founder, narrative – a branding & communications agency, adds, “Cred ads could garner enough interest in people for them to download the app, but then app usage and user growth plateaued because the rewards were abysmal. You can’t promise up to Rs 300 cashback against Cred UPI payments and give Rs1 cashback in reality. That defeats the purpose of incentivising timely credit card bills/easy UPI payments.”
Also, if you have to excel at being an all-in-one app through consistent performance and reliability, you’ll have to be at least as good as individual apps that offer one specific service, Varma adds.
Let’s zoom in on the company’s performance a bit.
Founded in April 2018 by Kunal Shah, Cred prioritisises credibility of its users, employing credit scores as a criterion to curate a community of trustworthy individuals, thereby simplifying the credit card bill payment process and rewarding timely transactions with exclusive offers and discounts.
Its operating revenue grew 3.5X to Rs 1,400.6 crore in FY23 from Rs 393.5 crore in FY22, according to the company’s press release. Whereas its payment processing cost, marketing and business promotion, information technology, legal and professional fees pushed its total expenditure by 66.4% to Rs 2,832 crore in FY23 from Rs 1,702 crore in FY22.
While burning money to create buzz and focusing less on services/offerings used to be a trend before among start-ups, experts note that today investors demand greater accountability from ad spend.
Moonshoot-ing Credvertising
Cred has set an excellent example of using celebrities intelligently by mixing humour, surprise and nostalgia to dish out campaigns that get spoken about. However, the challenge will now kick in — it thrives on the unexpected.
Since its advertising has set the bar so high, audiences always expect its advertising to deliver the next unexpected piece. “You take that out and its advertising runs the risk of becoming predictable. It will always take something extraordinary from Cred’s marketing and advertising team to keep the brand buzzing,” Khan notes.
Although, this X factor in those ads has diminished over time, remarks Arora of Social Panga. Today, one might notice the ads, but they no longer elicit that “woah” reaction they once did. It seems they’ve transitioned from creating viral sensations to more standard advertisements.
Experts do agree that all these ads now feel the same and monotonous, conceptualised by Moonshot, the ad agency led by Tanmay Bhat.
“With Moonshot, it’s the advertisers or brands adapting to Tanmay and his teams’ style of storytelling. They come from a legacy of comedy so that’s what you should expect if you approach them. They have a knack for making it engaging and adding real humour. But if the Moonshot team wants to acquire a larger set of brands, they will need to diversify their creative teams’ approach to handle the range of storytelling beyond comedy,” warns Sampath.
‘Cred ads were like that crazy uncle at a party – hilarious at first, but after a few too many IPLs, it’s getting old.’
Cred ads were like that crazy uncle at a party – hilarious at first, but after a few too many IPLs, it’s getting old. They targeted young professionals perfectly, but the ‘celebrity acting out of character’ joke might be wearing thin, highlights Sonali Banerji, Creative Director, BCWW.
Banerji adds: They rocked the party initially, but now it’s time for a new dance move.
The way forward
Sampath remarks how earlier, Cred had a very unique proposition – it rewarded people for paying their credit card bills on time, which was memorable, and valuable to customers. However, today, Cred is trying to push services that most other brands offer, sometimes without a real differentiator.
“There was a stage when fintech start-ups taught a few things to banks, in terms of innovation and agility. I think it’s now time that they take a few lessons from banks in building strong service experience and robust offerings. Banks understand relationship building, customer service, service delivery, cross sell and upsell,” she suggests.
Arora points out how start-ups need to focus on finding the right business model and really digging deep into it. Pivoting is important, but it shouldn’t feel directionless.
For example, Cred’s transition from credit card payments to UPI and secured loans seems like a strategic move to become a one-stop financial solution. This kind of expansion can help build a loyal customer base by offering multiple services in one place, notes Arora. However, each pivot should strengthen the core value and not just be an experiment.
Banerji concludes saying maybe it’s time for them to take a step back. Instead of all this buzz, why not focus on explaining what they offer and how it can actually help people or solve a problem? Happy customers are the best kind of marketing. Plus, all that flashy marketing can get expensive.