Giles Andrews (Part 2) 042-2
Giles Andrews, CFO of Zopa, describes people's motivations for using Zopa.
Transcript:
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A. Slip under the radar the famous civil servant trying to leak bad news at opportunity times.
These things don't work unless they are done consistently and I think you are right, you get all sorts of knock-on effects by having more empowered people, people who feel able to make a difference.
So anyone in the company -- everyone in the company -- is encouraged, if they see something they can answer from our community, should just go ahead and answer it.
There is not a party line because -- well I suppose there is a party line but it is shared by everybody and it doesn't have to be communicated, it is perceived and, therefore, everyone feels empowered to respond and act accordingly and sort of as an intuitive sense of what the company would say in response to certain questions because we are -- the company views are shared by everybody else and it is not something we have to communicate in memo form which is great because who likes writing memos.
Q. And that extends to -- how do you perceive of them?
A. I do not really -- my perception, I mean every business needs customers. So we need customers because they do pay us money and it keeps the business going but I do not think we have a sort of conventional customer supplier relationship. Which I think for me is always slightly patronising and always slightly uneven and the supplier, in many cases, thinks I am the supplier of the goods so I am the higher up the food chain than the customer and the customer thinks I am the customer and the customer is always right so I pay the supplier's wages so I am hire up the food chain. So there is this sort of conflict. I do not think we really have that. I do not think we perceive our customers in the same way and we refer -- internally we refer to our customers as members. That was not a sort of dictat. It just evolved that way and I think, if you ask anyone in this room, the word customer is not something I hear very often -- I hear 'members' a lot.
Q. Say something about that, you know, you are not saying "we make something and they receive it." You don't?
A. At the end of the day -- that is another interesting -- we don't make anything. We are a market place. We exist to connect people. So I suppose if you wanted to do -- in the traditional terms our lenders are our suppliers and our borrowers are our -- or their customers rather than our customers and we are just a market place in the middle and maybe that is why the term customer doesn't ring true in my head. So it is a lender in that paradigm, where I just described the lender as a supplier, is the lender our customer or not? Easier to refer to him as a member.
Q. ...is it important to you to respect people?
A. (3.37) I think it is really important to respect them. It is also important to -- well, it is important to respect them in the same you respect any other human being, you know. They have a fundamental right to respect and that doesn't mean they are right all the time and it doesn't mean you have to listen to everything they ever say but they have a fundamental right to respect.
Q. What is your opinion of compared to to ...(inaudible)
A. (4.30) I think they are a community of individuals where their motivations for for dealing with us are probably actually very disparate and so I think we have people that deal with us purely financially, so Zopa offers a great financial return and, in jargon speak, it is a new asset class which consumers have not had access to before, which is called unsecured consumer lending which is a sector that banks have made a lot of money out of in the last few years and therefore it is an interesting opportunity to some.
To others it is an interesting sort of social diversion. It is fun.
And to others it is an philanthropic thing where we have lenders offering money on our markets at uneconomic rates of interest, so why would someone offer money on the Zopa market at 2 and a half per cent interest. There must be some -- I mean assuming they are not mad because I don't think any of them are mad -- there is something philanthropic going on there.
So, as far as I am concerned, all those motivations for interacting with Zopa are good ones but it makes it difficult to generalise and I suspect that that is something that society is increasingly coming to terms with: that customers don't necessarily fit into is the easy pigeon holes that businesses and marketing departments like to think they do because it makes their lives much easier, if they can label people, and marketing agencies will say, if you do this and pitch in this publication, you will attract this demographic and these are your customers. We have never found any evidence at Zopa that that kind of approach works and we have to engage with people individually. That is extraordinarily inefficient as an marketing strategy and therefore means we depend on, I suppose, the community in the viral organic growth from our community because actually we are putting an supplement in the Mail on Sunday which might work terribly well for another financial services provider, doesn't necessarily have a guaranteed success for us.
Q. Most of the people we have talked to have seemed not to do any marketing...
A. (7.06) Right, well, we have done marketing that we have paid for and it just has not been very successful and we do less and less of it so maybe we should have started from the position of the other people you have talked to.
Q. Is it I think it is I think this patnership thing ...it is very easy for people to understand the responsibility of what happens to their money.
A. I am not really sure what the question is.
Q. ...do you agree that that is why?
A. (8.14) I think people engage with the idea. So I think people fundamentally think that is an interesting idea and for the different motivations I have described earlier, in that some people think that is an efficient business model, I am intrigued by its efficiency that means I will make money out of it. Other people think that is a really interesting, neat idea -- I like the sound of it. Other people say I am on their sort of slightly less establishment end of society, so I like the idea and other people say that is a great way I can help people, so I will forgo some of my return on my money in order to help people. So I think people engage with the idea.
Actually turning that idea into something that works for people, operationally, is more complicated than you might expect and doing so in a way that conforms to a really important part of our ethos which is is around taking security. So a sort of less exciting part of what we do is to work really, really hard to make sure as few people as possible lose money and that we don't lend to the wrong people and we lend responsibly. So, one, we don't want to lend to the wrong people, we don't want to create further problems in terms of consumer borrowing in society that is over borrowed. We don't want to exacerbate that problem both on a moral basis and also financially we don't want to do it and that is something that is actually quite difficult to transact and it creates complications with the interactions with us so we have borrowers who applied for us -- they have to fill in a reasonably big form and at the end of the day, in some days cases, the computer says no.
So you can not lose those unexciting parts of the way you run your business. But to those people who are successful, who don't find the form filling to onerous, I think you are right -- they probably do enjoy dealing with us but I think what we are engaging in is fundamentally the idea of people working together with other people to get a better deal and our job is to try and make the sort of boring bits of the web site match up to the interesting idea.
Q. We have got to change our tape.
