New Product Development
Mark Aspinall 13 December 2021
There is nothing new under the sun. Apparently.
And a recent trawl through mortgage and loan company websites threw up over 10 pages of products - all to do with consumer lending and which certainly seems to bear that truism out. Short term, long term, life-time fixed (admittedly rare), loans for cars, payday loans, loans to keep you going at college until the next grant cheque turns up, and on and on.
However, we do occasionally get presented with truly new lending ideas where people have spotted a potential gap in the market. These make for interesting - and sometimes really exciting - discussions. So exciting, that the innovator perhaps loses sight of who really matters in all of this - the borrower. At such times it’s a good idea to not only listen to what they say (good market research is always helpful) but actually test what they do (anyone remember when McDonalds started selling salads on the back of research and then canning them when everyone rushed to not buy one?). People’s behaviours don’t always match their stated intentions. The problem then becomes one of cost (especially if only one in three or one in five products are a success) and launching and testing any new financial product can look prohibitively expensive.
So, what if you are thinking of launching the next big thing too? Whilst it’s always exciting, it’s important to do your homework and then do a controlled entry into the market: what may seem obvious to you may be anything but for the consumer. Yes, do your market research but then get your product prepared, work with a small number of trusted (perhaps specialist or geographically constrained) brokers and find a partner who can manage all the loan administration for you without it interfering with your core business. Make sure you are clear in your objectives for the trial, define what success looks like and make sure you have access to all the data that is created at a really granular level. Once you’ve done all that, you’ll have given your new baby the best possible chance to grow without putting any of your normal, day-to-day business at risk. Bringing a new product to market can be the most satisfying aspect of any job, so get everything sorted at the outset, and good luck!