Customer acquisition costs are top-of-mind for every business, but even more so for startups, where the speed and cost of growing a user base can be the deciding factor in whether they live or die.
When asked about cost of customer acquisition by moderator Julie Verhage of Bloomberg on stage at the CB Insights Future of Fintech Conference, Betterment CEO Jon Stein had this to say:
“If the acquisition costs were as high as some of these reports say, we wouldn’t have any money left.”
He went on to explain that he didn’t know where reports of his company’s acquisition costs got their figures from, and implied that those numbers could be related to the high costs of acquisition common at incumbent banks and other large companies.
“Maybe that’s how much it costs incumbents, but it doesn’t cost us that much,” he said.
Verhage asked him to shed some light on how they got their costs so low. Stein’s answer was three-fold:
“We’ve made investing easy and delightful … we have the best advice … and when we increase conversion rates, we decrease acquisition costs.”