For our latest Operator Session, we were joined by Aoife Houlihan, who has been managing Global Communications and Public Policy at Klarna for the past six years. To the discussion, Aoife brought invaluable insights from her 15+ years of experience and gave us a glimpse into Klarna’s comms playbook, a company that has successfully stayed relevant through ups and downs, having been in the market for over 17 years.
Today, Klarna’s biggest market is the United States, something unimaginable a couple of years back when Aoife was expanding its team, opening one market at a time. The company’s incredible growth journey in the US derived from following an often-forgotten blueprint based on going back to scrappy roots, basic communication and marketing tactics to initially scale fast in extremely competitive markets and build these out to more sophisticated concepts when some consumer and merchant awareness established and product market fit was clear.
In this article, we share some of the best tips that came out of the discussion, and hopefully, actionable items tech companies can use.
How early is too early for public affairs
As a startup, your operations are very likely to be contingent on upcoming regulations and too often, companies find their house on fire before properly looking at public affairs. At a bare minimum, these regulations’ tailwinds need to be on a company’s radar to operate and defend its point of view. For Aoife, it can even go further than that: “It can really turn into a competitive advantage because you’re able to demystify some of the complexity around regulation for your customers, ultimately foreseeing what might be coming and putting together a solution that would support them.”
Most importantly, focusing early enough on public affairs allows businesses to go from day-to-day operations to thinking about what is coming next, ensuring an influence on the future of their market. This doesn’t mean you need to be actively lobbying or influencing everything, but getting the proper level of monitoring. When it comes to investor sentiment, this will make a huge difference if incorporated from the outset.
Managing market sentiment and engaging through tough times
It’s fair to say that Klarna knows how to manage the ups and downs that follow different market conditions, the company went all the way up to 47 billion and recently raised at a 7 billion valuation. This affirms its category-defining position, Klarna has gone from being completely VC-backed to financing through a mix of private debt, bonds, private equity and has eyed the public market for a couple of years. The company has become increasingly very transparent on its financial metrics, growth and expansion plans, releasing quarterly results.
After years of managing affairs privately, its communications section is now closer to the standards of a public company, without making that leap quite yet For Klarna, driving more transparency is a defensibility asset: the discipline associated with transparency, and its consistency has allowed the firm to create trustworthy relationships with its customers, investors and most importantly employees, who are also active shareholders. “I think debating whether the company should be more public with reporting than required is a very healthy discussion to have. We’re obviously building for the long term, but we’ve adapted our narrative needs to be more attuned to our journey, hence the public quarterly reports, which was not natural to us at the beginning. It’s clear that our CEO Sebastian is not a serial entrepreneur, he’s going to dedicate his life to this business” adds Aoife, while being questioned on the benefits of being public about growth.
If you’re in it for the long term, holding back information will have little impact on your success. You can share the burden of some battles, especially when it comes to market sentiment (up or down). A lot of other companies are likely to be in a similar situation and that collective piece for representation can also be quite cost-effective.
The value of communications, how to even measure it?
The sentiment on how crucial communications and marketing is often undervalued. Unless you’re building the best niche product in the world, you’re unlikely to grow organically forever. As we approach the year’s planning, considering the market conditions, many companies are pondering ways of cutting costs and are having healthy discussions on where to keep investing. KPIs and ROIs shouldn’t only be weighed during tough times, and should never change due to specific market conditions. It’s important to steadily keep the same lenses. For one, Brand is a really strong moat, “it’s a flywheel within itself around attracting consumers, when at the moment the attention is becoming quite around the bottom line” adds Aoife.
Over the years, the communication team has become “a lot more” metrics-focused, especially as the team scale from a couple of generalist communicators to a pool of 30+ experts in public policy, language and bring in-house expertise. “The reality is that we’re only doing what’s critical for long-term growth” adds Aoife, who says this discipline has been beneficial to the business growth, especially when launching new markets: “It rolls back again to why you should use our product as a consumer, what is the value you bring, which can get lost in the noise at times. It’s about smarter spending though: you won’t be rewarded by cutting this out completely because the company is not going to grow organically.”
Too often, success metrics are down to executive sentiment, whether or not it was good. Some companies will focus on headlines, or the number of mentions (share of voice), all metrics likely to be achieved quickly with press releases sent on the wire. “These metrics are all okay if you have mass reach challenges, but what we now really focus on is the cut-through rate of our message” adds Aoife while being questioned on which metrics the company focuses on.
Pick your spokesperson wisely. Actually, pick your spokespersonS.
Successful businesses often rely on several spokespersons to help shape their vision, attract top talent and share the load on the overall narrative. Building a spokesperson strategy will move mountains to reach your audiences. Ideally, you wouldn’t depend too much on your CEO or Founder, which can be very hard in startups.
While Aoife has worked a lot with CEO Sebastian Siemiatkowski, she says there’s an upside in building confident leaders across the C-suite but also product leaders: “We have strong product leads that are so passionate about their products that they can often transcend our vision better. Journalists are eager to engage because you have an owner that not only understands the product but also conveys emotion beyond the business’ purpose. It’s about making it part of their job and their KPIs to sell as well.”
Fast reactions, on the right channels, and with the right spokespeople are critical. An important part of a communications team today is defining the role of internal communications, product market and customer experiences. All these remits are often intertwined, and detailing each function’s roles and responsibilities is key to getting a perfect feedback loop.
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Communications and Public Policy are two areas in which leaders still have a lot to learn about. The unpredictability of the markets and increased competition in tech makes it harder for leaders to navigate a world in which they have to be accountable for virtually every aspect of their product’s societal impact. You want to create consistency in how you launch markets and constantly innovate on your messages, as Aoife puts clearly “you’re interesting until the next interesting thing comes along. The real moat is to think about the long-term, build the right relationships for the long run.”