Active management: staying ahead of the curve

We continue to modernise our business and take the opportunities presented by the current environment to serve more customers in our target market. Key actions taken in 2009 include:

Increase in front-line management

In order to give the home credit field force adequate resources to manage the business on the ground and keep arrears and defaults at acceptable levels as the recession has deepened, we have reduced the spans of control in our field offices. During 2009, we invested in some 120 new field-based roles to support our field activity and maintain operational capacity.

Customer recruitment

At Vanquis Bank, customer recruitment channels continue to evolve. An increase in online display advertising contributed to 61% of new customers coming via the Internet, and new card-issuing partnerships with other organisations brought additional new customers. We have also developed arrangements to consider customers who have been turned down by other credit card issuers.

Park Group Love2Shop vouchers

In our home credit business, we have replaced our own brand shopping voucher which we had offered for many years with the popular Park Group Love2Shop voucher. This has led to increased sales.

Tailored products

Only by applying a sufficient margin to our products can we remain profitable and so continue to supply our customers with the small amounts of credit they need. In deciding how much to charge for our products we take many factors into account including customer behaviour, market conditions, the competitive environment, and the current and forecast state of the economy. In 2009, we launched a new 50-week core product to replace the old 57-week product. The new product has a higher rate than the old product but provides a better fit with our customers’ needs for a loan of around a year in length. We are not alone in adjusting pricing and our customers tell us that we continue to be competitive and offer good value for money.

What it means to our customers

Gemma (top of page) used Love2Shop vouchers to buy presents for her daughter Tabitha's third birthday. Gemma budgets on a weekly basis, so the repayment structure is ideal for her, and having vouchers meant that she didn't spend more than she had planned to.