It was announced last week that Pocketbook and Zookal were teaming up to offer a ‘scholarship programme’ to university students around the country. The purpose of the programme is to educate and encourage students to pursue entrepreneurship as a career path. The ‘scholarship’ or competition which is essentially what it is once you read into it, will reward the winning recipient with $1,000 in cash and $1,000 in textbooks.
On the surface it all seems like a nice gesture: two teams of passionate startup founders giving back to the community. But when we start to peel back the layers of the onion, we begin to see the framework of a very clever acquisition strategy that, in the long term, benefits Pocketbook and puts them on the path to reaching 1 million users.
The Strategic Partnership
If we really break things down, this partnership does much more for Pocketbook than it does for Zookal. This is purely because the average lifecycle of a Zookal customer – typically a university student – is 3 or 4 years, or whatever the duration of their tertiary degree. Pocketbook can maintain a customer for much longer. In fact, like a lot of companies in the finance sector, they have the ability to maintain the customer forever if they take care of them properly.
The scholarship is essentially a marketing activity to drive new users to both services. However, there would be very significant reasons that Pocketbook have chosen to focus on this vertical of Gen Y students and it has everything to do with spending habits, the demographic’s thirst for information and the positioning of their company for a revenue model that current university students are a critical element to.
Pocketbook already has over 50,000 users from varying backgrounds and age groups; and Zookal currently has more than 100,000 users from 43 different universities across Australia. Zookal is already deeply immersed in the Gen Y student market, and Pocketbook get to showcase their brand in front of these users, as well as tap into Zookal’s various in-roads to the university market.
It isn’t clear what Zookal get out of the relationship other than the chance to continue building their database in a market they already have significant hold on, and an alignment with an emerging finance brand that has celebrity backing from David Koch, which guarantees exposure across multiple Newscorp assets through his new Money Saver HQ partnership.
Zookal has in the past demonstrated their propensity for using press coverage to grow their business – for instance, recently they announced a partnership with drone delivery startup Flirtey. Therefore there is nothing new or out-of-the-ordinary in their decision to align themselves in a partnership such as this, and they will still see a return on investment.
One Million Users for Pocketbook
If you have not used Pocketbook before it is a very powerful system. In fact, it has actually completely changed the way I think about my personal finances since signing up this week. The selling point for me like most of Generation Y is the convenience of being able to have total visibility on all my bank accounts and transactions at the click of a button, with no thinking or effort required. In a generation where we value transparency and a fair relationship with our banks,
Pocketbook is an important tool that allows users to do this – for example, the system flagged large bank fees that I was receiving and I found that I had overcharged fees of around $48.00 in the last two months alone.
What does this have to do with Pocketbook trying to own the student market? Well, everything. It is clear that today’s students are tomorrow’s employees, tomorrow’s lenders and are a generation that place above all else honesty and transparency with the companies they do business with. This is Pocketbooks number one feature.
University students also haven’t yet (for the most part) had the opportunity to create a pattern of how they manage their finances, and this presents a great opportunity for Pocketbook to acquire these potential customers and get them to become reliant on using their system to manage their personal weekly budgets and finances.
Domestically in Australia just across universities alone there are currently 813,689 students that fit this profile, according to the latest Australian Education Network figures. It then makes complete sense as to why Pocketbook want to own the student market. It’s the same market that every single major bank, telco and utility provider want to own as well.
If Pocketbook ever head down a financial model that looks at referral business as a source of income, then they need to make sure they get monopoly on the student market before other competitors start nipping at their heels.