Engagement & Retention project | Smallcase

Smallcase.com

Smallcase.com is a financial technology platform that provides a unique approach to investing in the stock market through smallcases, which are essentially curated portfolios of stocks and exchange-traded funds (ETFs) designed around specific themes, strategies, or objectives. This platform caters to both novice and experienced investors by offering a streamlined way to invest in diversified portfolios without the complexities typically associated with stock market investments.

What is a smallcase?

A smallcase is a basket of stocks or ETFs that reflects a particular investment idea or strategy. For example, investors can choose from various thematic smallcases that focus on trends like green energy or the electric vehicle sector, or sectoral smallcases that target specific industries such as pharmaceuticals or IT. Each smallcase is created and managed by SEBI-registered investment professionals, ensuring adherence to regulatory standards and providing investors with expert insights.

How does it work?

Investors can start by connecting their brokerage accounts to the smallcase platform. They can then invest in smallcases either through a lump-sum payment or via systematic investment plans (SIPs). Once invested, the stocks and ETFs are credited to the investor's demat account, allowing for complete control over their investments, including the ability to add or remove stocks as desired.

Key Features:

• Diverse Investment Options: Over 500 smallcases available, covering various themes and strategies.
• Transparency: Investors have full visibility of their investments and can track performance easily.
• No Lock-in Periods: Investors can sell their holdings at any time without penalties.
• Rebalancing: Rebalancing updates a smallcase's stocks/ETFs to keep it aligned with its original idea, and investors can apply changes with two clicks after receiving an email notification.
• Rupee Cost Averaging: Investor can start a SIP in a smallcase with one click when buying it. SIP allows investors to deploy the Rupee cost averaging strategy, helping them benefit from market fluctuations
• Earn Dividends: Dividends for any of the constituent stocks in the smallcase will be credited directly to the investor's bank account
• Tracking your portfolio: When you buy a smallcase, an index value of 100 is assigned to it. Say, after a year, your index value is 124 - meaning your smallcase has returned 24%. With the index value, you don’t have to track stocks individually. 

Types of Smallcases

1. Thematic Smallcases: Focused on specific trends or ideas (e.g., rural development).
2. Sectoral Smallcases: Target specific sectors of the economy (e.g., healthcare).
3. Fee-Based vs. Non-Fee-Based: Some smallcases require a subscription fee for access to premium features, while others are free

Core Value Proposition for smallcase.com

The core value proposition of smallcase.com lies in its ability to simplify and democratize stock market investing in India through curated portfolios, known as smallcases, that are designed around specific themes, strategies, or objectives. These investable smallcase portfolios are developed by SEBI registered financial advisors and professionals. 

Problem: Many investors struggle with the overwhelming choices in the stock market and lack the expertise to build diversified portfolios.

Solution: Smallcase simplifies this process by providing expertly crafted baskets of stocks and ETFs tailored to various investment themes—like technology, sustainability, or growth sectors.

By focusing on themes and strategies rather than individual stocks, smallcases facilitate long-term wealth creation through diversified investments that align with broader market trends. Smallcases offer more control, lower costs, and thematic investing opportunities compared to mutual funds, which provide professional management and built-in diversification but less direct ownership and higher fees. 

User Experience of the App and Website

• Home page / section of the app will give a quick overview of the market (nifty) as well as of the investor portofolio in the investment overview section.
• • Observations:
  • • Although it is good to have quick overview on launching the app but it always gets me confusing.
    • I always confused nifty with my own portfolio numbers. It takes me a few seconds to decide which is what in the investment portfolio
    • From a UX point of view there should be clear visual distinction between nifty vs my own holdings.
    • Clicking on this section takes the user directly to the portfolio section which is definitely a very good thing
• Investment Overview is followed by some banner carousels to introduce various features of the app such as smallcases, FDs and single stocks
• • Observations:
  • • These banner carousel is completely missable and prone to banner blindness
    • Users may lose out on new features introduced by the app if the banner messages and visuals are not prominent
  • Banner carousel is followed by Trending section which highlights the popular smallcases last month, most watchlisted, most invested etc.
  • • Observations:
    • • This is a very useful tool to help the user with both decision making as well as creating a FOMO factor in the minds of the user
      • New users are more likely to explore smallcases featured in this section in depth
• The following sections build up on the previous sections where it introduces as well as encourages users to explore various thematic smallcases
• The level up your investment journey section outlines a few tasks that the user should perform as part of his onboarding
• • Observations:
  • • This is very good tool that not only qualifies users who have onboarded to the PO but to the user himself
    • Based on the progress in percentage score as well as pending tasks the new user gets a visual feedback on his own onboarding journey which can prompt him to finish the onboarding
• The next section highlights the various managers on the platform as well as their insights (in terms of blog articles)
• • Observations:
  • • Giving a platform for the portfolio managers to share their research articles can help build trust not only with the platform but also with the managers
    • The managers get a platform to showcase their product offerings
    • Users get access to financial market research free of cost and it also keeps them engaged as well as informed
• The next section is SEARCH where it reinforces some of the sections of the Home page section and also introduces the users to new product offering such as FD, Mutual Funds as well as Single Stock offerings
• • Observations
  • • This section is more useful for someone who wants to do some deep dive on the various products
    • One big advantage is that users can compare mutual funds, individual stocks, smallcases and bank FDs all from within the same app. It brings all the retail financial products together under one umbrella.
    • Users can also Sort and Filter various products based on their criteria to help them shortlist the products that matches their interest
    • The Collections section has something like Ideal of new investors, India growth which makes it easier for users to discover portfolios as per their risk appetite or interests.
    • • The only drawback here is that these collections only introduces smallcases
      • Different products such as mutual funds and FDs can also be introduced as part of the collection to give the end user exposure to various other financial instruments
      • Alternatively based on the earnings that a user wants to earn (such as 10%, 15%, 20% per anum) different product groups can be categorised (along with the risk factor)
    • No where in the app the product takes into consideration the risk rating or risk appetite of the user. It kind of exposes all the products to the users and then it is upto the user to choose the smallcases which may be very risky for him or her.
    • The credit section has this interesting feature of giving loans against mutual funds at an attractive interest rate. This could appeal to long terms investors who would want immediate funds but may not want to exit their portfolio considering the future growth prospects. Also, loan against mutual funds is an interesting category not much users are aware of.

Natural Frequency for the users

• Natural Frequency:
• • Casual users (2-3 times/month)
  • Core users (4-5 times/month or once a week)
  • Power users (3-4 times/week).

What is the ideal Engagement Framework for Smallcase.com?

Depth for Smallcase is core, this means two things.

1. Time spent on app per month - The more users spend time on the app reading about various product offering, the more likely they are to invest in the products that smallcase app has to offer - thereby having a revenue impact
2. No. of distinct products invested - The more distinct product a user invests, the higher the retention. As this would give the user a unified picture of their portfolio across various products.

Actions that make a user an active user -

1. Free user.

• • Explores smallcases on a weekly or monthly basis
  • Bookmarks (or wishlists) at least one free smallcase from each of the collection - max 5
  • Reads investment insights as well as other financial insights
  • Invests minimum INR 500 in Equity & Gold and also starts an SIP of the same amount
  • Invests in one FD or a mutual fund
  • Invests in one mutual fund

2. Paid user

• • Subscribes for a paid smallcase
  • Invests a minimum of INR 15000 in paid access smallcase
  • Renews the subscription once it expires
  • Bookmarks (or wishlists) at least one paid smallcase from each of the collection - max 5
  • Reads investment insights as well as other financial insights

Segments:

• Casual Users: Engage occasionally like once in a month to read free financial content and understand this category of smallcases. They are kind of new to investing. They like to watchlist certain smallcases to see how they are performing over time.
• Core Users: Regular guys who has a systematic investing plan. They like to invest regularly once in a month into their choice of SIP for either smallcase or mutual fund. But like to engage with the platform at least once a week to explore deeper into various smallcases as well as mutual funds available.
• Power Users: Frequent users who explore a variety of products from smallcases, to mutual funds to individual equities. They would regularly visit to check the performance of their stocks, funds and portfolios they have invested in or they have watchlisted. They do not just restrict themselves to smallcases or mutual funds but would also buy stocks directly based on their separate research. They would like to be in control of their portfolio to some extent.

Advanced Segmentation:

• Loyalists: Regularly engages and invests with the platform
• At-Risk Users: Drop in engagement frequency - have stopped the SIPs and have started withdrawing funds
• Hibernating Users: Have stopped engaging as well as investing but are not yet fully churned

• Goal: Increase the average ticket size for investments in popular Smallcase like Equity & Gold to INR 5000. And get them to invest on a fee based plan such as MWG Asset Allocator portfolio for a minimum ticket size of INR 5000. And also make them invest regularly via SIP route.
• Success Metric: 30% increase in the ticket size for Monthly active users (MAU) in the casual category over the next quarter.
• Problem Statement: Users need guidance on investing in equity as well as trust plus faith that they will not lose their money.
• Current Alternatives: Other demat accounts, mutual funds, tezi mandi, axis direct etc.
• Solution: Identify users who are casual users with a minimum of INR 1000 investment in the platform and then update these users with articles, blogs, informational vidoes, infographics, newsletters on the benefits of investing regularly with a smallcase, Rupee cost averaging, compounding etc.
• User Flow: Open app → View personalized recommendation with a visual infographic comparing how an SIP of INR 5000 would have grown if it was invested in FD, similar mutual fund, Equity & Gold smallcase as well as MWG Asset Allocator smallcase over the past 3 to 5 years (based on the availability of historic data). Minus any deduction, fees, taxes, exit loads etc. to give transparent pricing and gains to the user to make informed decision -> nudge the user to start investments with 5K.

Campaign Examples:

• Segment: Core and Power Users
• • Goal: Increase weekly engagement
  • Pitch: “Sail the market volatility with ease by automating your investments!”
  • Offer:
  • • Highlight not just smallcases but other product offerings such as mutual funds, individual stocks etc. that matches their risk rating profile on the platform.
    • Encourage portfolio managers to share posts on smallcase internal social community and encourage them to have direct conversations with potential investors
    • An option to subscribe to regular feeds and updates from their preferred portfolio managers and also DM them for any queries
  • Frequency & Timing: Daily newsletter with market commentary as well as insights from portfolio managers.
  • Success Metrics: Weekly active users (WAU) and increase in the overall portfolio
• Segment: Casual Users
• • Goal: Encourage bi-monthly engagement as well as monthly investment
  • Pitch: “Make your money work for you!”
  • Offer: Showcase the top smallcases in the last few months as well as their earnings as compared to keeping that money in savings account or FD
  • Frequency & Timing: Bi Monthly email campaigns
  • Success Metrics: Monthly active users (MAU) and click-through rates

What are the top reasons your users churn

• Lost job or source of recurring revenue so the users do not have extra money to invest
• Lost money in some smallcases immediately after investing because of the volatile market conditions
• Found an alternative

Divide your churn reasons into voluntary churn & involuntary churn

Voluntary

• Lost money in some smallcases immediately after investing because of the volatile market conditions
• Found an alternative

Involuntary

• Lost job or source of recurring revenue so the users do not have extra money to invest

What are the negative actions you'd look for? Examples, Low NPS, Support tickets, CSATs etc. Make this relevant to your product.

• Stopping of active SIPs
• Stopping of smallcases
• Selling of stocks
• No rebalancing of portfolio after constant reminders

Resurrection campaigns for voluntary churn such as loss due to market fluctuations would be educate the users on the benefits of long term investing as well as introducing them to the concept of Rupee Cost averaging to even out their losses and encourage them to invest more (or regularly) using SIPs instead of exiting their positions and taking the loss.

Creating case studies to give an example of how holding the investment and buying more during market corrections can help them bring down the cost of their average unit and sail the market volatility.

Resurrection campaigns of alternative options in the market would be to have a direct call with the user and see how they can be retained. By giving them free plan for a few months.

Actually I have not done resurrection campaign before so I do not have much clue on this.