An opinion by me.
Allo Bank is the latest entrant to the digital banking space in Indonesia. In March 2021, they were acquired by PT Mega Corpora (Bank Mega) and got approved by OJK. They eventually changed their name to PT. Allo Bank Indonesia, Tbk in June 2021. Fast forward to May 2022, Allo Bank is ready to launch with a big event.
As a k-pop fan, an Rp100.000 concert ticket is something not common. An offline festival with many musical performances, including famous Korean singers such as Red Velvet and NCT dream, Rp.100.000 is very cheap. So I wonder, what is the target of this event?
To be honest, I was also trying to get the ticket, but the date, unfortunately, collided with the exam day. When I was searching for how to purchase the ticket, I came to understand the motive behind this concert.
how to purchase the ticket?
To purchase a ticket to Allo Bank Festival, you have to download the Allo Bank app AND upgrade your account to Allo Prime (requires KYC). After successfully upgrading, then you will be able to purchase the ticket on the spot during the festival.
For me, this is bad. I have to provide my important and confidential identity for just getting the ticket. Besides that, I also have to sign up for an app that I don’t necessarily need.
But from the company’s POV, this is an ingenious but necessary action to get an ROI (return of investment) from the massive cost to organize the event. Some benefits include:
- New users (a lot!)
- Increasing brand awareness
- Make new users familiar with the application and use it for other purposes
Looking at the social media, especially the updates from my friends that attend the event, I think the concert is a huge success.
A combination of popular guests and loosening of covid restrictions caused lots of people to attend (also cheap tickets, don’t forget about it), especially after the restriction of several concerts during the pandemic.
Why do they are so aggresive?
Strong product offering and product introduction to the public, I think.
A lot of new digital banking will offer a lot of amazing products, like free fees when using the service. To implement and incorporate the services they create into the market, the product must first be familiar to the public.
This is how they compared to their competitors.
Allo Bank has all the features that are necessary for a digital bank. Their stand-out features are of course the financing products. In the pay later product, users can be financed up to 100 million for their purchases. It also has instant cash where users can quickly liquidate funds up to 2 million. For financing products, only Jenius and Digibank provide a similar product.
Allo Bank also offers the highest rates for some products compared to their competitors. Allo Bank offers a rate of 4% for their savings product while the other bank usually in between 3% to 4.25%. Allo Bank also offers a rate of 6% for their deposit product while the other banks usually set a number between 3% to 4.25%.
This strong product offering gives Allo Bank the confidence to do the massive acquisition strategy, as a strong product surely helps to acquire new users as well as get users from competitors to switch.
Will it have a downside?
Yeah, of course.
It can be assumed that the users downloading the app did so with the purpose of purchasing a ticket. It raises the question, “do the users acquired actually have a need to use Allo Bank?”.
After successfully purchasing and attending the event, it is very high that the users will delete the app permanently and not use it as a daily financial application.
What do you think of this strategy? Is it effective?