Can a bank be pink? How Klarna built its brand on “forbidden combinations”

Klarna CMO David Sandström
Klarna CMO David Sandström

Klarna CMO shares how the financial services brand went from boring and blue to vibrant and pink.

For the first decade-plus of Klarna’s existence, it was a boring, blue and male brand — typical of a financial institution.

Then David Sandström joined the company as CMO in 2017. The former DDB Nordics CEO and Campaign US CMO 50 honoree had a vision to disrupt the category through what he describes as “forbidden combinations” — for instance, a bank that leans into vibrant pinks, whimsical creative and celebrity partnerships with rappers including Snoop Dogg and A$AP Rocky.

What may have seemed radical was logical for Sandström, who knew banks and financial institutions are seen as some of the most hated and distrusted verticals in the world.

“Banks have lower trust than politicians and the media, but still, there seems to be a recipe they all follow with their marketing,” he said. “Everyone is blue, boring, uncreative, bureaucratic and male in their approach. That, to us, sounded crazy. Why would you want to look like something that is universally hated and distrusted?”

Instead, Klarna, which enables consumers to split purchases into payment installments or “buy now, pay later,” (BNPL) wanted its brand to stand in complete contrast to the category.

At the time of Klarna’s U.S. launch, the market wasn’t as familiar with BNPL services. So Klarna had to be “attention-seeking” with its campaigns, Sandström said. In 2019 Klarna brought on Snoop Dogg as an investor and spokesperson and in 2021 rapper A$AP Rocky joined the collaboration. In 2020, Klarna teamed up with Lady Gaga to open a creative mentorship hub in LA supported by a $100,000 grant.

Another key approach to growing awareness was targeting subcommunities and interests. In 2017, Klarna ran a U.S. campaign with stars from RuPaul’s Drag Race to tap into the drag community. “Instead of being generally relevant, especially in the U.S., where it's expensive to target everyone everywhere, we went for subcultures that made sense,” Sandström said.

Now that BNPL is big business in the U.S., with more than 45 million people projected to use the service in 2021, per eMarketer, Klarna’s competitive set is growing. Therefore, its marketing strategy is changing as it becomes a “household brand.” In its latest earnings report, Klarna said it has 20 million customers and processes 2 million transactions per day. It’s now valued at $46 billion. 

“We’re not this juvenile, fast-paced, energetic and sometimes angry disruptor,” Sandström said. “We’re a more stable, grown-up, responsible, household brand. That is a shift, and it informs media choices.”

Klarna has grown its brand recognition with a largely in-house model, despite Sandström's background as an agency exec. The financial brand chooses not to work with an agency of record because external firms often can’t move as fast as internal teams, Sandström said.

“I can’t work productively with agencies,” he said. “It’s too slow. I write a brief, and before I finish the last sentence, it has changed.” He also described retainers as a “useless business model” that Klarna doesn’t have interest in paying for.

He added that Klarna relies on agencies for “slow-cooking projects,” but for something more urgent, day to day or related to its data-driven marketing strategy, the brand keeps strategy and execution in-house, Sandström said. He added that outsourcing the entire problem is the work of a “lazy CMO.”

“I want to have really skilled people that come up with things that are right for us,” he said. “If we are too dependent on an agency, there is something wrong with how we work internally.”

Sandström said agencies often are not incentivized to work on projects that will move the needle for Klarna’s business. CRM emails, for instance, are critical to Klarna’s success, but creatives are more interested in creating a 30-second TV spot.

“The business model and incentives between clients and agencies are not aligned,” Sandström said. “They want to sell some creative mastermind thing that won't affect my business because they want to be on stage at Cannes, and I want to do something that actually moves the needle.”

Still, there are times when an agency relationship is key. Sandström is aware that the best motion designers, art directors, copywriters and creatives may not choose to work at a financial services firm where 2,000 engineers outnumber a 30 person creative team.

“I see the agency more as an extension of my team, rather than a supplier of ideas,” he added. “But I want to do as much as possible in-house, because you have to work at Klarna to understand how ideas align to our brand.”

As BNPL becomes mainstream, Klarna faces stiff competition from other providers, traditional and disruptor banks and even retailers such as Walmart and Amazon enabling BNPL services at check-out.

Klarna will continue to tap into passions by offering interesting content around the shopping experience to stand out. That includes creating a “shopping user app” with shoppable content, influencer live streams and other elements that bring emotion to online shopping.

“Half of a purchase is the transaction and the other half is emotion, passion or interest,” Sandström said. “What if we can make e-commerce and online shopping more social, almost like a multiplayer game? We’re trying to build an app that recreates the feeling of going to a mall with your friends.”

Still, Klarna isn’t the only one leaning into shoppable content, and faces competition from social platforms with massive followings (see: YouTubePinterestInstagramTikTokSnapchat).

“It sounds crazy to say we're in the same game as [social platforms] but to some extent, we are,” Sandström said. “I don't think this will be a winner-takes-all market. Everyone will find their niche around shopping.”


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