OPINION:
Sweden’s Klarna Bank and DoorDash are partnering to allow customers to purchase “groceries, retail, meals and more” on credit. The idea of leasing tacos and pizza is inviting snark. But few are savoring the secret ingredients of what’s shaping up to be a brilliant marketing plan.
DoorDash coordinates transactions between customers, delivery drivers, and everything from restaurants to convenience stores. Klarna, according to a statement at DoorDash.com, is an “AI-powered payments and commerce network.”
The leader in the online ordering business, DoorDash claimed a 67% market share in America and 42 million monthly active users as of January. Last year, its 2.5 billion orders helped it post a profit for the first time.
Now, customers using DoorDash’s app or website will have Klarna options at checkout. These are “Pay in Full,” “pay in four equal, interest-free installments,” and “defer payments to a more convenient time,” with no interest charge specified.
“Pay in 4” is the only innovation compared to other payment processors. Financing those purchases will cost Klarna, but considering the amount of free coverage the partnership is gaining, it’ll be well worth it, and interest can always be added after new customers are on the hook.
Banking isn’t a thrilling topic. This campaign’s genius is spicing up the mundane and replicating the buzz of a startup. The DoorDash press release sprinkles on the excitement, adding flavor to a corporate alliance that would otherwise have tasted bland.
DoorDash ignores that credit cards and a range of digital payment options already exist. That the move is drawing so much attention anyway is a testament to a savvy strategy aimed straight at the social media landscape’s sweet spot.
The idea of financing lunch gamed algorithms that reward cleverness, insults, and interactions for the same reason that class clowns are popular. The traditional press, meanwhile, is always on alert for something new.
Smartphones and Internet technology capture the imagination. Older customers — the very ones who may be unaware that DoorDash exists — marvel the most at having the world at their fingertips. Piquing their curiosity makes them more likely to ask about a service and give it a try.
A sign that the partnership has become a hook is a headline in Newsweek on Friday. “Klarna and DoorDash,” it asks, putting two names that are trending first. “Is Buy Now, Pay Later on Food a ’Recession Indicator’?”
Economic doom is a sure way to get people’s attention; folding in a hot topic adds a layer of icing to tempt readers. By comparison, Tuesday’s announcement by Dollar General that it will start accepting SNAP and EBT payments through DoorDash passed unnoticed.
Coverage of the DoorDash-Klarna team-up are what Madison Avenue calls “earned media.” This is coverage received through social media, news reports, jokes on late-night TV, and parents who ask tech-savvy kids about a product.
A Nielsen study in 2013 found that earned media was the “most credible among consumers” worldwide. In 2019, the Institute for Public Relations did another poll and found the same results. Both surveys judged recommendations from friends and family the most coveted word of mouth.
The earned advertising bonanza benefits Klarna, too, as it coincides with their expected initial public offering next month. The Financial Times expects the IPO to have a valuation target of $15 billion, which would make it “one of the biggest listings of the year.”
In this context, the DoorDash quote by Klarna’s chief commercial officer, David Sykes, takes on a wider significance. He calls the partnership “an important milestone in … expansion,” touts “smarter, more flexible payment solutions,” and says the bank is delivering for “millions of Americans.”
Mr. Sykes is signaling to potential investors that Klarna has access to a large chunk of the American market. Since stories quote details provided by the bank, they act as the key paper evaluations used to pitch IPOs.
Whether customers avail themselves of the new payment options, DoorDash and Klarna are gorging on all the attention. People missing this key facet of the marketing campaign can joke all they want, but the two new partners will be laughing all the way to the bank.
• Dean Karayanis is content producer for the Clay Travis & Buck Sexton Show, former Rush Limbaugh staffer, and host of History Author Show on iHeartRadio.
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