NAB now pay later... You've gotta admit it's a good name.
๐ Background: The buy now pay later boom has kind of been and gone... In fact, a lot of investors are now shying away from the industry. Zip Co's share price is down 80% since the beginning of this year โฌ๏ธ.
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๐ What happened: And yet, around seven years on from Afterpay's launch, big four bank NAB is getting in on the BNPL trend with NAB Now Pay Later.
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๐ What else: NAB doesn't actually expect to be bringing in much cash from the service. Instead, it hopes the product will help engage customers over the medium-to-long-term... Essentially, the service is a 'loss leader'.
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๐ก A loss leader strategy is when a company purposely creates a product that is not intended to be profitable, but is made to cross-sell other products... or drive customer engagement.
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๐กCustomer engagement often has a direct correlation with increased revenue. In fact, engaged customers account for a 23% premium to average customers in terms of revenue, profitability and relationship growth.
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๐ก If NAB engages customers with a potentially loss leading BNPL product, it could be more likely to cross sell with them with credit cards or mortgages ๐ณ ๐ .
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