Marketing

Zopa Promotional Offer: Rate Promise

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Today Zopa announced yet another promotional offer for lenders: Rate Promise. In this limited time offer Zopa promises lenders that ‘… the money you lend within the Offer Period, for up to 5 years, will earn an average return of 5% over the lifetime of those loans.‘ That is after fees. The offer is valid from January 9th till Feb. 3rd. Actually for some lenders this will mean even higher guaranteed returns – see full T&C of the Rate Promise here.

I think Zopa’s repeated promotional offers (cash backs and now rate promise) are signals that Zopa feels the impact of the p2p lending competition which entice Zopa’s customers with models that seem more appealing (there has been a lot of discussion that with the introduction of Safeguard Zopa became much less transparent) or could yield higher returns. In terms of p2p lending loan volume originated per month the main competitors are certainly gaining ground on Zopa.

While this is a (nearly) no risk offer for those lenders managaing to invest during the promotion duration, users on the Zopa Talk board do wonder what longtime impact this has for Zopa. And rightly so as Zopa will have to cover any shortcomings from its fee margin. Done repeatedly it will effectively result in an unlisted fee decrease.

I am sure it will fulfill the probable short term goal: increase funds on offer and originations in January.

Win a Copy of Zidisha’s New E-Book

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Zidisha has just published the Kindle E-Book ‘Venture: A Collection of True Microfinance Stories‘. Authored by Zidisha staff and volunteers, the book is a rich and readable collection of real-life portraits of Zidisha entrepreneurs worldwide.
Venture is written for Zidisha supporters and anyone else who would like to better understand the realities faced by the poor and the aspiring middle class in the world’s least developed countries, the range of factors that affect their prospects for working their way out of poverty, and how microfinance can impact their lives. There are 34 stories of individual borrowers.

Zidisha founder Julia Kurnia told P2P-Banking.com that all proceeds will go to cover Zidisha’s operating costs.

Note to other p2p lending/p2p microfinance services: Do you have interesting inside stories to tell? Have you considered distributing them in e-book format? The marketing effect could be good compared to other marketing channels. For maximum exposure you might even offer the e-book for download free of charge. If you tried this method, tell us, so we can write about your experiences.

Here is how you can be one of 10 winners of a free copy of the new E-Book

Are you interested in Microfinance? Maybe you have used Zidisha already? Regardless of what triggered your interest in the subject, you have a good chance to win, because the only thing you have to do is: be quick!

The first 10 readers to leave a comment (any comment) under this blog post will win a free copy, courtesy of Zidisha. You need to leave your email address when commenting in the designated field. The email addresses will NOT be publicly visible. The email addresses of the 10 winners will be given to Zidisha. Zidisha will distribute the copies. And after you read it, please do come back and post a comment here how you liked it, so other readers can have some guidance on whether they should go ahead and purchase it. Thank you.

Smava Changes Business Model; Brokers Bank Loans

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German Smava, launched 2007, yesterday announced that it will offer more products and evolve into a marketplace where borrowers seeking loans get multiple offers. The site logo and layout have been redesigned to reflect this change. Smava said p2p loans will be continued to be on offer and the new products (bank loans) added will give the borrower more choices.

My take on this – what does Smava achieve with this change?

Smava’s new loan volume was static since mid-2010. With the current change Smava:

  1. can increase revenues. Since borrowers can be offered more loan terms and get multiple offers from banks, the probability of a sale increases. That bank loans need less explanations than innovative p2p loans further spurs this. Smava earns lead and sales commissions from the banks.
  2. can justify high marketing costs to acquire the borrowers better now as the resulting traffic is more efficiently monetized. Unlike before Smava no longer needs to balance demand and supply (borrower growth versus lender growth) but instead can totally focus on marketing to borrowers.
  3. decreases costs, as the intense vetting of loan applications (of which about 90% were rejected) is no longer necessary in most cases, since the bank does it for the referred applications

Why does Smava still keep p2p lending?

The question is not if Smava will continue p2p lending (the announcement said they will), but rather if Smava will continue development on that offer. That is unlikely since little happened in the last years. My assumption is that Smava keeps p2p lending on offer mostly for PR and marketing purposes.It allows Smava to position itself as different to loan brokers and loan comparison sites and keep a little of the image of financial innovation attached to the site. Continue reading →

How Do the Efforts of Prosper and Lending Club in Search Engine Marketing Compare?

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Internet ventures are dependant to a certain degree to new visitors that are referred to them via search engines. A visitor that did a search on a very specific search term, e.g. ‘get a personal loan’ will have a very high chance to sign up if after that search he is introduced to the Prosper or Lendingclub website. There are tools that measure how ‘visible’ a domain is on Google and other search engines providing an index chart, that allows to compare the visibility of several websites.

Prosper’s visibility index (blue line) is much higher than Lendingclub’s. Prosper.com ranks good for more and more important keywords in organic search rankings. Organic search means, that Prosper shows in a the search results at search engines that are not paid ads. But which search terms do the actually rank for? Continue reading →

Adwords Marketing Activity of British P2P Lending Marketplaces

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I did some research on use of Google Adwords in the online marketing strategy of Zopa, Funding Circle and Ratesetter.

Who is most active in search engine advertising?

I was surprised to see that Funding Circle is the most active in advertising on Google Adwords.

The chart shows that Fundingcircle had active ads nearly the whole year, while Zopa ran the ads only for certain intervals and Ratesetter only gave it a small try. Continue reading →