Why I think CRED is an incredible brand (even if the business is questionable)

The risk of working in advertising / marketing / branding these days is you’re eventually asked the C-question.

What do you think about CRED?

I’ve been asked this by students of courses I teach (including 20 year olds). Some Whatsapp groups I’m a part of can’t call it a day till someone professes their love for / loathing of said Fintech company — and this was before they got India’s most famously sedate cricketer to proclaim himself the gangster of Bangalore’s hipster district.

For the record — I’m a fan of CRED as a brand.

I’m a fan in the same way I’m a fan of metal-turned-electropop band Bring Me The Horizon — I just love how they keep breaking rules, go against convention, and have scant disregard for tradition and their many critics. I’ll try to explain why.

Marketing activities can basically be:

• Stuff that drives sales (in the world of digital, this could be targeted social media ads and sponsored results on Google Search — not very memorable, but pretty effective at converting advertising rupees into revenue)
• Stuff that helps build the brand (a lot more nebulous and can be anything from a senti ad, an event sponsorship, a plug by a content creator, powering a social cause, or even just a nicely written thank-you-for-buying email).

Building a brand takes effort, mostly because it’s a long-term payoff. Building a memorable brand can become the ultimate moat and might even help a company reduce sales-led spending in the future. As Scott Galloway (who, by now, you should know is one of my personal heroes) memorably put it:

A brand is a shortcut for taking a purchase decision.

What does all this have to do with CRED?

Most Fintech players (or even finance players) don’t really have memorable brands. This is partially because of a conservative approach to communications (banks, mutual funds) or because money needs to be spent on more user acquisition thanks to sales target, or just improving product (most new Fintechs). As a result, many banks are solid businesses (most banks, anyway — sorry, PNB) that nobody really cares about beyond transaction. My guess is that you — at best, like your bank but would rather not open up the bank app or, even better, have to think of it. Not too many tears were shed when banks had the rug pulled from under their feet by UPI apps. Seriously, after GPay, why would you even want to open up the clunky HDFC Bank app, the “new” version of which refuses to work if you don’t have a fingerprint scan enabled on your phone?

CRED is the polar opposite of the above. Great brand, but questionable (at best) functionality. You’ve probably heard or made the jokes by now — around their business model, what to do with all the CRED coins, and all that. And somehow, all that just adds to the mystique and weird brand that CRED has built — not everyone gets it, it makes no sense, etc. CRED is many things, and self-aware is definitely one of them. Business publication The Ken has this excellent recent analysis about why the company has no choice but to break the rules (signupwall). In another article (paywall), the same publication would write:

CRED’s first moat is its brand. In the space of less than three years, CRED has managed to build a distinct brand for itself. So much so that while everyone from Amazon to Paytm have competitive products — credit card payment services with reward points earnings — there is zero brand recall for anyone other than CRED.

CRED’s marketing achievement is not based solely on recall. It has also successfully positioned itself as a luxury brand that is both cool and aspirational. There are hardly any comparable startups in India who have managed to do this, much less in such a short period.

At the risk of sounding like a stan of CRED, Scott Galloway and The Ken — a combination that would make me a prime target of mockery in some Whatsapp groups and Indiranagar cafes — I agree with the above. I don’t foresee a clamour for Paytm t-shirts anytime soon.

Neutrally speaking, CRED as a business makes no sense — but only if you gauge it with traditional metrics. Keep in mind, we now live in a world where Reddit decides which stocks will fly by 500%, a marketplace that deals with a vastly unregulated/unrecognized asset IPO-ed and is now worth more than Goldman Sachs, and digital art is selling for millions. This is not a criticism of any of those things — but an acknowledgement that the world and finance are in massive flux — and in a time like this, irrationality has a way of winning, or at least standing out enough to make it lucrative for stakeholders. One of the great lines that Rory Sutherland had in his outstanding book, Alchemy, was:

For a business to be truly customer-focused, it needs to ignore what people say. Instead it needs to concentrate on what people feel.

Look, I have no idea if CRED will succeed as a business. All I can say is this: Everyone is talking about them. Their app downloads are increasing. People writing cheques are definitely taking note and evaluating CRED’s brand value against its revenue (or lack thereof).

Will CRED succeed as a business? In the traditional sense of things, maybe not — but that depends on what Kunal Shah wants to do with it. What could he? His last exit might give us some answers.

Could a big bank / financial firm acquire CRED?

I go back to Mr. Galloway.

One of his most interesting (if debatable) theories is how big businesses these days acquire industries that have high love, but low revenue-making potential. Examples he cites are Spotify acquiring podcast companies, and Amazon getting into entertainment. To paraphrase him, Amazon doesn’t want to get into movies as such — but use it as a way to make Prime more appealing — its real cash cow. “Featurize entire high NPS industries to sell more batteries and toilet paper” is a regular refrain of his.

You see where I’m going with this.

Who has big bucks and low brand value? Banks.

Who has incredibly high brand value and questionable business model? The C-word.

What happened to Kunal Shah’s last venture? Freecharge eventually made its way to Axis Bank (who did diddly squat with it). I would not be surprised to see CRED headed the same way (a designer at a bank I spoke to reckoned the same). It would add incredible NPS to a fuddy-duddy traditional bank setup, and perhaps infuse some life (even if irrational) to the company, exciting its shareholders and employees.

It’s likely there will be other synergies too — a bank could use CRED as an outlet for exclusive offers and maybe even customer research. I wrote more about this in a speculative article earlier this year, here.

It’s quite likely that after reading all of the above, you’ll come back and say: “What you wrote made absolutely no sense”, and you’re probably right — that’s because we’re talking about CRED here. With that company, nobody knows what will come next. All I can tell you is this: As a person observing the marketing / branding space, it is utterly fascinating to see what they do, and as I told a student in my class: I have no doubts that in a few years, marketing and strategy classrooms will have case studies on this brand.

Incidentally, my favourite piece of CRED’s marketing is not the Dravid ad, but this seemingly-dense Twitter thread. Read till the end, and you’ll see why.

Note: I wrote this for a newsletter I run, called Things of Internet. It’s a paid newsletter on interesting findings and observations in the world of the web, mostly from a marketing lens. It’s just ₹300 a year and free for students — do sign up if you found this interesting.

Later edit: After sending the newsletter out, someone wrote in to me to tell me that while the logic was sound, the acquisition by a bank might be unlikely at the current valuation of $2b — a fair point.

Later edit: Another great example of CRED’s savvy marketing here: