Payday loans are clearly big business. The APRs they charge are, in my opinion, outrageous and whilst you can argue the point that they are lending to people who cannot use mainstream banks and whose only other option would be the even less palatable money lending that exists outside of the law and regulators view, I would contend that they are exploiting a group of society that is limited in its ability to change the model through its own actions.
The Government and regulators seem to be acting, slowly, and I see a real positive action in the growth of credit unions – great institutions & a wonderful model of co-operativism. The OFT investigation and referral to the competition commission has led to a reduction in companies already, and you have to believe that those who have ceased trading were the least well placed to survive an investigation, because the model itself looks profitable for the companies. You even have to admire the Church of England and its intent; using Churches for social good and allowing Credit Unions to use them is a great idea. It’s a shame about the £75k (tiny !) VC investment in Wonga getting the greater publicity.
But this post is really about how the payday loan companies have cleverly built their brands by use of some very clever naming strategies that they then follow through in the brand experience, advertising and customer journey. All designed to make you feel happy and that this is somehow not really a big deal.
Think about it … you usually borrow money from venerable institutions like Lloyds, Barclays, Nat West and so on. There are a few outliers like Tesco Bank, Virgin Money and M&S Bank – but in the main these are serious brands with serious names and a lengthy heritage in banking/money.
But this is not the case with the Payday loan companies. Check out the list below;
- Wonga = slang for money
- Payday Pig = plays on piggy bank
- Moneybox = plays on piggy bank
- Cash Cow Now = plays on well known phrase implies easy
- Cash Lady = gender specific and unthreatening – uses Celebrity endorsement … not A list !
- Sunny = happy light feeling
- Peachy = happy light feeling – “everything is just peachy”
- Pedro = happy singing mexican imagery
- Uncle Buck = family friendly associations
- QuickQuid = slang and presents low value implicitly by use of quid
- WizzCash = majors on speed
- BeeLoans = friendly imagery
- Moola = slang for money
Example imagery below:
This is clever marketing designed to mitigate the awfulness of knowing the APR is running into thousands of percent. These names as they appear are often tertiary brands and as you click through you find yourself at a differently named website. It is a confusing marketplace – with low entry costs and a proliferation of brands using ‘names’ to target different sectors.
Wonga for example is using older characters perhaps to demystify and appear less threatening but also to appeal to an older demographic. Cash lady, clearly identifies with a gender specifically. Clever segmentation strategies that are more sophisticated than you first think.
The websites and collateral are all bright primary colours, simple and easy to read – perhaps based on an insight that the audience is less sophisticated.
The imagery is typically friendly, illustration of sunny uplands, rounded fonts and simple forms and actually there is very little traditional loan imagery, no money symbols in evidence, just lots of sliders and dials that you can interact with.
You have to admire the way these companies have presented themselves as friendly, professional and appealing with warm cuddly advertising. Cartoons and illustrations are happy and welcoming and resonate with an unsophisticated target. But they, like the naming strategies they have employed, are a distraction designed to move the eye away from the APR and the reason that the target audience has to use them.
I might not like them, but their advertising and marketing is well positioned and well executed.
I do hope that the Competition commission do something swiftly to address what I see as a blight on our society, but the cleverness of their advertising will stay with me for a long time I think
10 Aug 2013