product

PM POV: Capital One

“if I were the PM, how would I improve three Capital One products?”

This is the start of a hopefully regular-ish (yeah, I’m data-driven) series where I write about Product. I think about it quite often, but my thoughts are scattered throughout Apple Notes, Notion pages, and my head. This is an effort to articulate those thoughts into a somewhat-polished format.

Today’s piece will be a POV on three different Capital One products to answer the question: How would I improve it?

Capital One Shopping

Overview (if you don’t know what it is)

  • What: Users get cash back deals, compare real-time prices, and apply coupons while shopping online -- rewards can be redeemed for coupons
  • How: This can be done via the C1 Shopping website, app, or while browsing the web using the browser extension
    • Web platform: shop by brand, products, events, and hotels
    • Mobile App: personalized home section with options to search, view hotel deals, and more
    • Browser extension: apply coupons at checkout
  • Note: C1 Shopping cash back and offers are independent from C1 card holder benefits (there are separate offers and deals for them)

Users: Who are you building it for?

  • millennial/gen zs between 20-29 bc they are likely earning regular income, spend a significant amount of paycheck online, and still highly influenced (i.e. make dumb/impulse purchases and like to try new things)
  • the venn-diagram of those that are the above and budget-conscious hopeful – want to save money (or convince themselves that they are)

Value: Why build this?

  • Value to C1 customers
    • Saves users money (one of the core desires)
    • and time -> making your life and online shopping, cheaper + easier
  • Value to C1 business
    • Revenue:
      • Referrals: Affiliate commissions from directing traffic to partnering sites (commissions are shared with users)
      • Sponsored deals/events: Extra $ directly from Retailers for paying premium to be a featured event/deal on the C1 shopping homepage
    • Non-revenue:
      • Customer engagement and loyalty: Retention through added value, unique offering compared to other FIs (financial institutions)
      • Data collection and insights: consumer behavior data (improve marketing campaigns, product offerings, and personalized experiences in other C1 products)
      • Brand awareness / expanded customer exposure: C1 name and logo is plastered everywhere
      • Cross-selling: can be used to introduce new audience to other C1 products

Viable: Should we build this?

  • Value to business: (1) direct revenue streams and (2) indirect benefits like cross-sell potential and expanded data insights
  • Viable:
    • (1) aligns with customer-centric approach by using technology to deliver new value in novel, digital-first ways
    • (2) appeals to their target customers – everyday consumers (both young/credit building and mature/tech-savvy)
    • (3) expands their reach on financial ecosystem by diversifying their revenue, data collection, and customer exposure

My perspective –> Strategy: What would I do next?

  • It does all the basic things (see: Kano Model) that the competitor / popular online shopping rebate tools use so customers would be baseline satisfied with the current product. Therefore, when making a option between C1 and competitors, customer could choose C1 Shopping solely based off brand recognition
  • BUT they have three areas of opportunity that will (1) differentiate themselves from other major players and (2) get more people using their other C1 products

Three Opportunity Areas & What to Build

  1. Introduce an entirely new way to shop for a new generation: "Desire" NL Search Engine
    1. How: allow users to search for products based on what their feeling or want to do (like Marriot's AI search for getting vacation ideas)
    2. Why:
      1. appeals to existing younger/impulse crowd who love shopping online
      2. entirely new way to shop for what you want without knowing what to buy, made possible through new GenAI technology **
  2. Strengthen an existing differentiated feature (that isn’t marketed as a differentiator) in a viral way: Enhanced Price Comparison Tool (that meets shoppers where they are)
    1. How: input URL in front of product page URL for quick access to full-screen view of deals and similar items (see how Dupe.com did it)
    2. Why:
      1. Competitive analysis shows price comparison feature is already a differentiator vs competition, but it isn’t marketed. This functionality can be a “show not tell” demo on the feature page.
      2. Increase accessibility to the differentiator (so people are disappointed if they switch) by meeting customer where they already are (on the product page)
      3. Increase potential uses of the price comparison functionality (currently, you can only compare prices when on amazon or on the C1 Shopping platform), with the format (full page) to display the detailed prices
  3. Enhance cross-sell & clear customer confusion: Incorporate C1 Card Holder Benefits
    1. Why: the current product is (1) unclear on the difference between C1 card rewards/offers and C1 shopping offers (according to reviews) and (2) doesn’t promote any exclusive benefits for existing C1 card holders (you already know what your existing customers actually spend their money on)
    2. How:
      1. for Potential C1 cardholders: offer exclusive/additional promo deals to non-C1 card holders to encourage/convert them to become C1 card holders by opening accounts
        1. what if there were special sign-up points offers or additional % savings for those with a capital one card?
      2. for Current C1 cardholders: allow them to redeem the C1 Shopping rewards for statement credits (not currently offered, one of the biggest complaints in the reviews) OR with a wider range of merchants
        1. Reviews show clear misunderstanding. This will help understanding and customer satisfaction, particularly for existing C1 card users who are disappointed that C1 Shopping rewards aren’t tied to their credit rewards.

Capital One Mobile App

Overview (if you don’t know what it is)

  • What: a mobile app for banking
  • Main functionality/benefit they promote:
    • Basic, convenient account management on the go (viewing balancing, making payments)
    • Easy access with Face ID and Touch ID
    • ++ additional features: locking cards, credit wise, alerts, virtual check deposits
  • Note from annual report: Security remains core concern of increasing mobile banking product usage and mobile payments --> likely core focus of app right now
  • Sentiment: IOS: 4.8/5 stars with 8.2M ratings on app store. Android: over 10m downloads.

Users: Who are they building it for?

  • Theoretically, anyone with a C1 account and a smart phone
  • Really when looking at C1’s target customers: individual consumers (all levels of prime), instead of SMBs who likely require more sophisticated functions and therefore interfaces/portals that would require a web app

Value: Why build this?

  • Value to C1 customers
    • Manage their accounts 24/7, on-the-go = accessibility, convenience
      • Access account actions: pay bills, check balances, transfer money, deposit checks
      • Real-time notifications: mobile alerts for account activity
      • Security: instant card locking
      • Rewards: track awards, points
    • Personalized benefits = information for proactive decisions
      • Customized spending insights, budget tracking, and financial advice
      • Offers for discounts at stores they shop at
      • Eno, in-app AI assistant
    • Bonuses: Integration with other digital payment services [apple/google pay]
  • Value to C1 business
    • Increases customer engagement and retention
      • Regular interaction opportunities (deeper customer relationship/loyalty, increasing customer satisfaction)
    • Increases data to use for data-driven insights
      • App collects user data on behaviors, preferences, transaction patterns --> allowing C1 to further personalize services like offers, predict future trends, and more effective marketing campaigns (reducing CAC, increasing retention)
    • Increase operational efficiencies by offering self-service features
      • Reduces need for in-person banking or support calls (allowing for scale)
    • Bonus: reinforces brand loyalty and positioning as a tech-savvy, consumer-centric company

So in summary --- Value:

  • For customers: Customer experience (Loyalty, personalization, self-services)
  • For company: benefitting from that CX, but also data collection

Viable: Should we build this? (even though no direct revenue streams)

  • Viable:
    • (1) aligns with customer-centric approach by leveraging technology to deliver personalized digital products
    • (2) appeals to their target customers – everyday consumers (both young/credit building and mature/tech-savvy)
    • (3) benefit from that CX, data collection, possible operational efficiencies

My perspective –> Strategy

  • Capital One's Mobile App does all the basics, delivering value to its customers and its business as one would expect with an app…
  • BUT there's 3 opportunities for it to deliver new value for it's customers and business

Strategy

  • Of the 3 opportunities, two of them work sequentially to (1) getting more people into the app and using it (hypothesis that people don’t use it that much outside of basic needs based off user research) -> (2) enhance the overall experience
  • the third one is (3) a moonshot exciting idea to leverage the newly acquired Discover card/payment network
  1. New Personalized Financial Planning and Insights tool
    1. What it is: financial planning tool for users to set financial goals and better manage their money using personalized insights on their actual spending/saving/budgeting habits to achieve those goals
      • Fills a gap where it falls short: compared to competitor apps (Chase and BOA)
      • Similar to Mint: track monthly spending, across categories, set budgets, alerts
    2. Why:
      • Customer value = customer-centric personalization elevates customer experience by giving them personalized views and insights into their spending habits, budgets, and actionable ways to tackle their financial goals (great for underbanked, credit building consumers who are less financially literate)
      • Aligns with strategic approach to leverage tech-driven solutions to providing the best CX
      • Business value = increased customer experience & touch points because users will visit app more**:** increased retention, increased effectiveness of campaigns/targeting through better understanding of customer behaviors (specifically budgeting and financial goal desires), increased satisfaction
      • Customer interviews confirmed the lack of touch points: They mainly use app to check account balances (ensuring ample funds before automatic payments like rent or pay bill if they don't have automatic payments)
        • ++ Occasionally: check credit score, setup automatic payments for credit card (”one time, but thought it was very easy to do so”)
  2. Advancing Eno's capabilities
    1. What:
      • invest in AI/ML research to make the assistant provide more accurate, helpful responses (reviews say customer support through app doesn’t help)
      • personalized financial planning and management insights (leverage user goals from financial planning tool)
    2. Why:
      • For users: once people are in the app -> increase satisfaction/retention and usage
      • For business: (1) no one knows about it despite it being a differentiator as part of your strategic approach and (2) increase operational efficiencies
      • Based on research: people don’t even know it exists
    3. Metrics to track: not requiring feedback (sessions opened consecutively: decrease, time spent with assistant per session: decrease, but watch out for second order effects, messages sent: decrease, response time of Eno: decrease, people that come back to Eno: increase, using Eno on first load of app: increase) and requiring feedback (survey at the end, satisfaction/star rating)
  3. Social Payment Platform
    1. What: social payment platform built on top of discovers card network (compete with Venmo).
      • C1 currently uses Zelle which is common to other Fis like chase -> But Zelle stinks according to reviews/and me -> make their own instant social payment service (can this be done on discovers payment network?) (Zelle doesn't even support Discover debit cards)
      • Features: social transactions with friends via phone #/email, separate account for these payments outside of your checking/savings
  4. Why:
    • For customers: Aligns with younger, credit building consumer base that is social
    • For business:
      • (1) Ways to revenue: fee for instant payments to friends without C1 peer payment system, invest cash sitting in people's accounts to low-risk guaranteed interest making accounts (like robin hood), no longer paying Zelle fees,
      • (2) Aligns with general approach && (3) better personalization based off user behaviors

Capital One Auto Navigator

General Overview

  • What: a car buying/selling platform that offers comprehensive services for both sides
  • Problem to be solved: Trust and Information Access (according to car buying outlook in 2023)
    • Asymmetric trust perception: dealers were 3x as likely to believe process is transparent compared to 21% of buyers which means this is really an information asymmetry (increase personalization and transparency for the buyers) -- gap in this perception has only gotten wider
    • Buyer’s trust in dealership matters more than deals for car buyers
  • So: the solution is to ****"build trust both ways" ---> aims to solve number one problem
  • How: Provides transparency and ease for both buyers and sellers
    • Car buyers can go through the entire process online and set preferences for what they want
    • Car sealers (dealerships) can understand those preference and provide customers with personalized offers while working with their existing CRM

Users: Who are you building it for?

  • Buyers: buy the cars -> ****want information access, to trust information, and an easy process
  • Sellers: sell their cars -> build that trust

Why build this?  -- Value

  • Value to C1 customers
    • Car buyers
      • Easily navigate the entire car buying process, from approval to finding the dealership with your car
      • "Saves time, increase satisfaction with choice"
      • 96% customers recommend this product - according to reviews managed by Bazaarvoice
    • Car Sellers / Dealerships
      • Connect with more car buyers == generate and convert more leads
        • Connects with dealer CRMs, with conversion tools and personalized virtual showrooms
  • Value to C1 business
    • Revenue:
      • from buyers: interest on the loan payment plans to purchase a car
      • from sellers: possible fees to use the service, (conversion tools)
    • Non-Revenue:
      • Builds 'Trustworthiness' in brand perception
      • Engagement in capital one ecosystem
        • Get people using their products
        • Can be used to cross-sell on other C1 saving tools like capital one shopping

Viable to C1 for all the same reasons mentioned for other products

Main problem of solving ‘Transparency’ becomes the oppurtunity

  • Transparency stood out as the main problem based on (1) core problems to be solved, (2) customer reviews, and (3) differentiator in competitive analysis, and (4) aligns with strategic approach for customers

Competitors & Competitive Research

  • Carvana: online used car dealership
    • C1 win: focused on pre-qualification for financing before you start shopping, so you know budget and terms upfront
    • Carvana win: fully online buying experience with touchless delivery
  • AutoTrader: online marketplace connecting buyers and sellers, financing through 3Ps
    • C1 win: integrated with C1 credit's offerings, vs having to use 3P
    • AutoTrader win: decades of connections/personalization data (Started in 1997), private sellers, advanced search filters for specific vehicles
  • Cars.com and TrueCar: digital automotive marketplaces
    • Their wins: true price clarity, comparisons with what others paid
  • Ally Auto: financing service that offers auto loans/leases to consumers through dealership networks
    • C1 win: pre-approval before purchasing
    • Ally win: variety of purchasing options with post-purchase support
  • Summary: Capital One's Auto Navigator stands out for its financing pre-approval process that does not impact credit scores combined with its flexibility it offers in choosing a dealership, dealer portal and its integration with Capital One's broader financial services

My perspective

  • This is a good start to addressing the informational/perception asymmetry in the car buying process, but more can be done to improve transparency for the buyers, who ultimately still report frustrations/disappointments/dissatisfactions with transparency in fees/interest rates.
  • The focus on pre-approval process (connected to C1s credit service) with no effect on credit score is what drives traffic to their site (and ultimately their revenue by leasing through C1 credit loans) and a big win for transparency.
  • Further transparency is needed to become a standout player in this field and build brand C1 brand trust.

Strategy → How might we reduce transparency issues for car buyers in Capital One's Auto Navigator (for their core customers)?

Three prioritized ways to do this:

  1. Fix discrepancies between rates online and final rates in dealership
    • Integration of real-time data with the dealerships internal systems
    • Training for manual data maintenance
  2. Address difficulties understanding financial terms
  3. Strengthen customer support and communication channels

Additional - Areas for improvement (according to reviews)

  • Interest rates were too high
    • "disappointed with high fees (despite their financial good standing)"
    • "surprised by high interest rates and fees"
    • "complaints about unexpected fees"
    • Way to improve:
      • more competitive rates for loyal customers (apparently already in place when filtering by reviews of those who spent 1+ years with C1)
      • Transparency and upfront communication regarding fees/rates to manage expectations
      • Clear breakdown of fees
  • Poor communication and customer service -- improve with:
    • Reduce time taken to respond (customer support workflow), and reduce repeat customer support chats (quality of service reps, training)
    • Virtual chatbot
    • Chat interface for interacting with FAQs
  • Approval process: doesn’t handle edge-case circumstances and isn't aligned with dealership process
    • "frustration not being approved for a new car loan after car got totaled"
      • Accommodate exceptional circumstances or clearly highlight those not currently covered (with links to get help)
    • "discrepancy between dealership and online approval process"
      • go into dealership, act as a customer, take notes
  • Poor stability and structure of app and website
    • "difficult to pay"
    • "frequent log outs"
    • "difficulty navigating features"