Wednesday, January 27, 2010

“Nothing except the mint can make money without advertising.” -1st Baron Macaulay


Despite growing concerns about privacy, identity, and security on the Internet, there are a number of online products that succeed in developing a great deal of trust from consumers. These products manage to market themselves using the same channels as their competitors, yet they achieve much more. In particular, Mint.com is a success story.

If you’re not familiar with Mint.com, it’s more closely related to a facility for manufacturing coins than an aromatic herb. Mint started in 2007 and it’s a website that requests all your personal banking usernames and passwords, and then provides you with a dashboard to view a summary of all your assets and liabilities. This includes savings accounts, checking accounts, credit cards, loans, 401(k)s, and other investments. With greater visibility, you may be able to create better budgets, save for retirement, pay student loans, pay off debt, etc.

A few months ago, Intuit completed the acquisition of Mint.com for $170 million (a valuation of 17x annual revenue according to thedomains.com). Intuit’s name will add an element of credibility to the website, yet over one million consumers had already handed over their most valuable online information to Mint.com Even if Mint’s intentions were sound, the company’s servers carrying customers’ usernames and passwords could have been hacked, or more realistically, this sensitive information could be sold to Intuit for roughly $100 per registered user.

To bring this back to marketing, Mint’s revenue model is based on lead generation within the product. Thus, Mint’s task is to acquire users (Challenge #1) and then recommend relevant, targeted financial products that its users will want to try (Challenge #2).

Challenge #1: Getting Visitors & Users

Mint employs an assortment of common online marketing strategies. Here’s one of their AdWords campaigns:

Free Finance Software

Manage Your Financial Expenses with
100% Free Mint 2010 Software!
Mint.com/Free-Financial-Software

Additionally, Mint has benefited from a lot of free advertising in the form of publicity. The company was funded through venture capital (which tends to bring certain press opportunities), picked up by many bloggers, and attracted large media companies based on a surging user base growth.

Challenge #2: Generating Revenue

Mint’s revenue model is based on lead generation for financial services. Within the product interface, Mint displays a ‘Ways to save’ link. According to the management team at Mint.com, 20% of users who view this savings page ultimately click-through to a partnering bank’s site. In comparison, traditional display banner ads are considered successful if they reach a 1% click-through rate. This means that Mint.com has found a way to show customers a group of financial products precisely when they’re in the market to purchase financial services. And that captivated audience is worth about $100 per user.

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