Cakes and “Awesomestow”

This weekend Money Saving Movement (MSM) placed itself back on the streets (well actually on a lovely piece of grass) in Walthamstow (Or “Awesomestow” as they like to call it). We have been itching to get back there and talk to the lovely people of this diverse area for a while as Walthamstow really interests us.

Walthamstow has been home to a number of research visits for MSM. It sits within the Borough of Waltham Forest which has some of the highest concentrations of deprivation within the U.K. Its High Street is notable for its long market (apparently the longest in Europe). The high street is busy with high cost lenders and high cost retailers, unfortunately. Both of which MSM are not fond of. However the people of”Awesomestow” are brilliant and we found them great fun to talk to. This might have been helped by the Free Cake, more about that in a bit.

The objective of this trip was to spend some more time talking to ordinary people about how we might design an alternative social enterprise service to high cost rent to buy retailers. So when we arrived we were all prepared with a pre-planned discussion structure, gazebo and the all important MSM banner. Most importantly of all (well maybe) we were also offering Free Cake supplied by the lovely Dee.

I’m pleased to say that we found out A LOT. Here is a quick snapshot –

  • People continue to use rent to buy retailers.
  • People are also paying for warranties to cover themselves in the eventuality that something goes wrong with an appliance.
  • People like brands that have a solid reputation.
  • People would purchase from a social enterprise.

It was great to hear people’s opinions and the data provided us with plenty to think about. For me it underlined the importance of “getting out of the office”. I wonder how much emphasis is put on this within business. I hear plenty of people talk about it but I struggle to find actual examples. It is core to our approach at MSM and we are looking forward to doing lots more of it.

Have a great week everyone.

JP

James Perkins

Co-Founder

Money Saving Movement  MSM in Awesomestow 1MSM in Awesomestow 2

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Does Bulk-Buy Fly? User Testing at The Mill

MSM Outside The Mill

There’s only so much reading and report writing you can do before knowing whether what you’re up to is right – eventually, it’s about time you road-tested.

After a whirlwind start, the Hub Launchpad jolted into its 7th week – the halfway point, and a time to take stock. We’d made some significant progress in honing our market, defining our problem, and producing a solid body of research – but often we’d made the most progress when speaking directly with our users.

Having steeled ourselves on the streets of Hackney, a new opportunity emerged to reconnect with our users. The Mill, a volunteer run community centre in the heart of Walthamstow, offered us three days to speak with people about the cost of living and how we might reduce it. As ever, the results weren’t exactly what we were expecting.

With food prices ever rising and energy companies arousing ire, our team had thought that bulk-buying products and services would be a great way of bringing peoples’ bills down.

We’d spoken to several groups who ran bulk-buy deals, which had helped us to identify several problem areas, such as how might the produce be distributed, and how much choice people would have over the goods they received.

Yet up in Walthamstow, peoples’ concerns were different. Even when recognising that saving money through bulk-buy schemes was a ‘good idea’, it was always an idea for someone else. “I feel this bulk-buy idea is second best to having flourishing local shops,” One woman remarked. “Even if it cost me more, I’d still want to support my local shops.”

Fionn Talking with Walthamstow Residents

The sentiment was echoed throughout our stay. “I’d rather there was an attempt to build neighbourliness in a small area,” said one man, who didn’t trust his energy supplier and yet hadn’t switched in 15 years. “The more connected to things and the better you know people, the better you feel so the less you need to spend.”

Guests of The Mill seemed to pine for community, and also expressed real enjoyment from sharing their money saving experiences – yet admitted to never having done so before we, as a group of strangers, had started the conversation.

Other recognised themes came to the fore too. When in financial trouble, people tended to rely on their social and familial connections, turning to public services often as a last resort. “I racked up £25,000 worth of debt with payday loans,” one woman told us. “Eventually I went to my father.”

Significantly, most people mentioned transition periods as being those that put the biggest pressure on their budgets. Moving from benefits to work or from two wage earners to one was a frequent concern, and something that has come up time and again in our research.

“I’ve learned my lesson with payday loans,” the woman continued, “but I’m just about to start a new job, and am quite worried about the changes that will bring to my money”

Mosaic Group at The Mill

If visiting The Mill served to dash our appetite for bulk buying, it also offered an array of fruitful alternatives. A “We Love Low Cost Living” event brought contacts with the local credit union and housing association, both willing to set up focus groups and eager to collaborate with future service designs.

After a long weekend The Mill had given us a lot – not just bellies full of free leek soup and foraged natural teas, but also greater insights into what people do and don’t want from the things that will save them money. That alone is useful food for thought.

Jetpacks, Grannies and Ladies on the Town – What Can We Learn from Payday Loans Marketing?

Payday Loans Neon

It might be unpopular to say this, but if the astronomical rise of payday loans companies since the financial crisis proves anything, its that these high-cost lenders are doing something right.

With eye-watering interest rates and half their profits derived from customers getting caught in spirals of debt, its difficult to see why anyone would want to get involved with a payday loans company – until you look at their competition.

Credit unions – touted as the best alternative to “compete Wonga out of business” – generally have terrible marketing that is un-engaging, sterile, and, frankly, boring. Their websites are often reams of text with simple, safe branding that fails to connect with a younger audience, and they rarely promote their payday loan alternatives.

Payday loans companies, by contrast, know their audience and are very effective at communicating with them. Our research on the Public Service Launchpad has shown that those most likely to turn to payday loans companies are under thirty years old, smart-phone and internet savvy, and are generally good with managing tight budgets, but can slip into trouble when an unexpected expense or a change in payment dates occurs.

With this insight, it becomes clearer to see why payday loans companies are growing so quickly. All the top short-term, high interest lenders have upbeat and engaging brands, with bright colours, feel-good imagery and a promise of better times to come. They boast about the speed and ease of getting a loan, as well as  underplaying the serious nature of taking out credit – sometimes to the point of breaking the law.

In addition, their social media accounts are often full of sporting brands, competitions and games – with many accounts not even mentioning or describing the loan services that they provide at all. These brands are loud, fun, and young, with cartoon-style illustration and mascots ranging from the familiar to the bizaare – including mad scientists riding jetpacks, cuddly grannies, and ladies out on the town.

The messaging is clear: its an easy, quick fix that will solve your problems, its not a big deal, and everybody’s doing it. In this way, payday loans companies target their branding consistently and accurately to attract their audience and to make them feel good about engaging with the brand – at least until the repayments are due, that is.

Banks, building societies and credit unions, by contrast, try to earn peoples trust by emphasising their expertise, reliability and authority in their branding – which often feels boring, slow and sterile. Is it any wonder, then, that payday loans can seem like a more attractive option?

If Money Saving Movement is about preventing people from slipping into debt, and to support them in navigating the cost of living crisis, then we need to be appealing to the same types of people that might consider using a payday lender.

In that case, the real question becomes not “Why are payday loans popular?”, but instead “What can we learn from their popularity that can be used for social good?”

Is financial capability the problem?

When people fall on hard times a common response is to say that they are spending money on the wrong things, or in the wrong way. Whether its Sky TV or a packet of cigarettes, focus is often on what people buy and how they buy it.

This has some major repercussions from policy makers. Financial capability is heavily monitored, personal finance education is to be made compulsory in schools, and housing associations are increasingly providing budgeting advice to combat rent arrears.

But is financial capability really the problem?

Whilst there is evidence that budgeting advice can help people to manage with low incomes, in depth ethnographic research from Surrey County Council and Lambeth Council suggests that people are actually much better at managing their money than they are given credit for. Indeed, living on a low income surely necessitates good management of a tight budget?

According to the financial services regulator “the UK population does well when it comes to making ends meet” – but that those who do worst at this are also the ones most excluded from mainstream financial services.

There are as many as 8 million people in the UK who don’t have access to a transactional bank account. On average this costs these individuals a whopping £1,280 per year, a punitive amount by anyones standards.

Given these circumstances, is financial capability really the biggest issue for low income households? Should the government be doing more to improve financial inclusion instead?