How to drive word of mouth | Nilan Peiris (CPO of Wise)
Nalan Piras, Chief Product Officer at Wise, shares how the company achieved 70% word-of-mouth growth by building a 10x better product. He details their strategy of using NPS comments to identify core product pillars (price, speed, ease of use) and relentlessly optimizing them.
Deep Dive Analysis
18 Topic Outline
Wise Overview and Word of Mouth (WOM) Importance
Measuring Word of Mouth Growth
Leveraging Net Promoter Score (NPS) for WOM
The '10x Better Product' Philosophy for Advocacy
Avoiding Common Missteps in Driving WOM
Working Backwards from Ideal Experiences
Wise's Approach to Pricing and Cost Reduction
The Three Core Costs of Money Movement
Solving Trust Problems and Singapore EKYC Example
Rational vs. Emotional Reasons for Recommendations: The Mission
Prioritizing Customer Happiness and Impact
Wise's Approach to Experimentation and Building Conviction
The Macrostructure of International Banking and Wise's Position
Structuring Global and Local Product Teams
A Small Change That Generated a 3x Increase in Referrals
Product Marketing: Closing the Value Perception Gap
Nilan's Philanthropic Endeavors
Lightning Round
5 Key Concepts
10x Better Product
This philosophy means creating an experience that users didn't know was previously possible, going far beyond incremental improvements. It involves solving systemic, difficult problems that lead to a fundamentally superior offering, which is key to driving strong word of mouth.
Working Backward Method
Instead of incrementally improving an existing product, this method involves envisioning the ideal, disruptive experience if starting from scratch, and then determining the steps required to achieve that ideal. This approach helps identify and tackle foundational problems for significant breakthroughs.
Cost of Poor Quality
Nilan defines 'people costs' (customer service, operations teams) as the cost of poor product quality. When a product is unclear or lacks automation, it necessitates more human intervention, increasing these costs. Improving product clarity and automation directly reduces these expenses.
Weak Product Ownership
This organizational model involves global product teams owning overall KPIs and a single codebase, while local or regional teams have the autonomy to directly commit code changes and pull requests. This structure allows the global product vision to evolve dynamically based on continuous feedback and adaptation to diverse market regulations.
Product Marketing (Within Product)
This discipline focuses on ensuring customers not only receive value from a product but also fully perceive and understand the extent of that value. It involves in-product cues, animations, or clear explanations that highlight the benefits delivered, thereby closing the gap between actual and perceived value.
8 Questions Answered
Wise measures word of mouth by integrating a question into their product flow asking customers how they heard about the service. This qualitative data is then overlaid with web tracking data for direct traffic to estimate the overall word of mouth percentage.
Wise focused on word of mouth because money transfer is a commodity, making traditional brand-led growth expensive. Their lower pricing structure also means they have less margin to spend on paid marketing channels compared to competitors.
Wise found a strong correlation between NPS scores and referral rates, with 9-10 scores doubling advocacy. They analyze NPS comments to identify key areas like price, speed, and ease of use, which they then prioritize to create a '10x better' product experience that encourages recommendations.
A common misstep is taking shortcuts, such as integrating existing infrastructure, which might provide quick user acquisition but doesn't fundamentally change the user experience. True word of mouth comes from building a product that is '10x better' and solves core problems in a novel way.
Wise allocates every cost (people, risk, partner fees) back to the specific customer or transaction that generated it. This allows them to charge more expensive customers appropriately, drop prices for others, and continuously invest in engineering to reduce these three core costs.
Wise prioritizes building conviction on what truly matters to customers through qualitative insights and data, then makes bigger, strategic changes rather than relying solely on incremental A/B testing for every idea. This approach aims for significant, rather than marginal, improvements.
Wise employs a 'weak product ownership' model where global product teams own overall KPIs and a single codebase, but local/regional teams directly contribute code and provide feedback. This allows the global product vision to adapt and evolve based on diverse regulatory requirements and market needs.
Wise achieved a 3x increase in referrals by adding a visual graph on the success page after a transfer. This graph clearly compared the user's savings with Wise versus traditional banks, making the value proposition undeniable and prompting users to share.
18 Actionable Insights
1. Blow Users’ Socks Off
Focus on creating experiences users didn’t know were possible to drive strong recommendations and word-of-mouth growth. This means going beyond merely ‘working’ or being ‘slick’ to truly amaze users.
2. Build 10x Better Product
Aim to create a product that is fundamentally 10 times better than existing alternatives, rather than just incrementally improving. This often means solving systemic, hard problems that no one has tackled before.
3. Work Backwards from Ideal
Define the theoretical ideal experience or limit (e.g., minimum cost, maximum speed) and work backward to achieve it, instead of incremental improvements. This approach leads to transformative product changes.
4. Leverage NPS Comments Qualitatively
Don’t just track Net Promoter Score (NPS) numbers; deeply analyze the qualitative comments to identify core product pillars. Customers’ direct feedback reveals what truly drives their advocacy (e.g., faster, cheaper, easier).
5. Prioritize Customer Happiness for Growth
Structure your business around a single list of priorities focused on making customers happy, especially by tackling hard problems with high impact. This approach, when successful, aligns customer value with shareholder value and growth.
6. Allocate Costs Granularly
Implement a system to allocate every operational cost (people, risk, partner fees) back to the specific customer or transaction that generated it. This allows for dynamic pricing where high-cost users cover their expenses, enabling lower prices for others and driving advocacy.
7. View People Costs as Product Quality
Consider customer service and operations team costs as indicators of product quality issues. Invest in engineering and automation to reduce these ‘people costs’ by making the product clearer and more self-service.
8. Empower Customers to Lobby
When facing regulatory or systemic barriers, engage and empower your customer base to advocate on your behalf. Wise leveraged customer complaints to the government to secure the world’s first EKYC license in Singapore.
9. Connect Emotionally Through Mission
Share your company’s authentic mission and values with customers to foster an emotional connection. This can lead to organic sharing and advocacy, even without traditional marketing calls to action.
10. Make Strategic Bets on Pillars
Develop conviction around key product pillars (e.g., price, speed, quality) and make significant, long-term investments in them, even if immediate incremental returns aren’t obvious. Trust that these foundational improvements will eventually drive growth.
11. Build Conviction with Qualitative Insights
Before extensive A/B testing, gather qualitative insights by talking directly to users to build a strong ‘gut feel’ and conviction about what truly matters. This approach helps focus engineering efforts on high-impact changes rather than broad experimentation.
12. Close Value Perception Gap
Actively show customers the value they’ve received within the product to ensure they understand and appreciate it. For example, visualize savings or confirm instant transfers with animations to increase referral rates.
13. Incentivize Solving Hard Problems
Foster a company culture that rewards tackling difficult, systemic problems rather than just incremental improvements. This philosophy encourages teams to pursue ambitious, transformative solutions.
14. Structure Global Product Teams
For global products, use a structure with central global product teams owning overall KPIs and a single codebase, complemented by local/regional teams. These local teams contribute feedback and code changes, ensuring the product adapts to diverse regulatory and market needs.
15. Evolve Team Structure with Scale
As your company grows, adapt your organizational structure (e.g., from independent teams to squads and tribes) to maintain autonomy while ensuring alignment with overall vision and strategy. Squads should focus on specific products or regions with clear accountability.
16. Prioritize Speed of Recovery
Cultivate a personal and organizational motto focused on the speed at which you recover from setbacks. In a high-growth environment, quickly moving forward after challenges is crucial for sustained progress.
17. Ask About Frustrations
When interviewing candidates, ask ‘What frustrates you the most about where you’re working right now?’ to understand their limits, what challenges they struggle with, and how they might fit into your company’s problem-solving culture.
18. Invest in Market Failures
If passionate about social impact, consider investing in or supporting startups that address market failures. These are areas where the market doesn’t adequately fulfill human needs, offering opportunities for meaningful impact.
5 Key Quotes
You have to give them an experience they didn't know was previously possible.
Nilan Peiris
If you optimize for something like conversion rate, and you move conversion rate with 10%, you kind of get this one-off hit. But if you move the MPS from 30% to 50%, you increase the viral coefficient of your customer base.
Nilan Peiris
The thing that defines success is the speed at which you pick yourself up.
Nilan Peiris
You can't split test your way to love.
Nilan Peiris
What is it that most frustrates you about like instead of why you're leaving, what frustrates you the most about where you're working right now?
Nilan Peiris
2 Protocols
Wise's Cost Reduction Strategy
Nilan Peiris- Allocate every single cost (people costs, cost of risk, partner fees) back to the specific customer or transaction that generated it.
- Identify the 20% of customers generating 80% of the costs and adjust their pricing to ensure they cover their expenses.
- Drop the price for all other customers.
- Invest as much cash flow as possible into engineering to systematically reduce these three core cost problems.
- Continuously work to engineer away these costs, enabling Wise to move into different segments of the market with lower prices.
Wise's Referral Program Optimization Method
Nilan Peiris- Identify a core insight about customer perception, such as customers believing they save money but not believing the specific numerical value of that saving.
- Sketch out alternative in-product experiences or communications (e.g., an alternative email or success page element).
- Gather qualitative feedback from customers (e.g., in a coffee shop) on the proposed designs and iterate until the message strongly resonates.
- Implement the refined experience, such as a visual graph on the success page that clearly compares savings with Wise versus traditional banks, alongside a prominent share button.