The Pioneer interview with...Neil Costello

Neil Costello was passionate about building iconic financial services brands with experience across the Aviva Group, scaling the Atom Bank brand and is currently developing digital experiences and brand building as Marketing Director at UK’s largest unknown brand, with 7m customers, Lowell. Lowell is a debt collection company on a mission to help its customers take control of their debt.

What does pioneering on behalf of customers mean to you?

For me, pioneering is connecting back to your true purpose, being true and deliberate with it. I think there are a lot of organisations out there that say one thing and do another. If you’re pioneering when it comes to customers then the organisation should be willing to back you, even with a riskier decision if it’s focussed on making things better for the customer. It’s about taking real risks, as opposed to fake ones that an organisation could probably shirk. I’ve been blessed with that backing at Lowell, and for the last three years we’ve been delivering customer propositions that haven’t been seen in our sector before, so it was never clear whether they were going to fly or not. But if the business is serious about being a customer pioneer, it will back them knowing that some will fail.

What is a good example of Lowell backing bold customer-led decisions?

One good example is the credit scoring that we’re giving away for free in our app. It’s a cost that we’re footing because we’re serious about helping customers out of debt for good, helping people by giving them the tools and services to do this without it adding to their expenses. Since we launched the functionality, about a year and a half ago, what we’ve seen is a clear link between those customers who use the free credit scoring and those that pay off their debt quicker. It’s not just giving it away because the purpose of the brand allows you to do it, you can actually see that the commercial net benefit is positive because more customers are paying off debt quicker.

What does it really take to be customer-led in your sector?

I think there are many important elements that need to come together. The way we look at it is that everything we do is all about financial health in the broadest sense. Our customers are in the lower deciles when it comes to finances and they’re not going to miraculously find money. But we can help point them to tools and services that give them a little bit more flexibility in their finances. We don’t force them to use this to pay off their debts, but we believe that many of them will choose to use some of this money to pay off that debt.

We’ve got relationships with other brilliant businesses and brands in Fintech that bring things we don’t have. For example, we’ve partnered with Snoop. They help customers understand patterns in their financial behaviour and what they can change to improve their income during the month. We’ve also started working with entitledto.co.uk, which is a free benefits calculator. That’s because there’s a lack of awareness, particularly in those segments that are less financially astute, of the benefits that they are entitled to. We’re giving that service away for free as well and we’ve found a huge number of customers use it.

It all goes back to our purpose, which is to help get people out of debt for good. Whether that’s directly through us or by working with others, we firmly believe that we’re leading the charge and that the sector will follow.

What is the value to you and your customer of working with other brands?

I think our sector is probably one of the most mistrusted parts of financial services. To combat this, we work with brands like TransUnion to provide free credit scoring. They are trusted because of their brand awareness and the clear role they play that’s not connected to debt management. This helps break down the trust barriers that the individual has, making it easier for them to engage and act.

How do you stay connected to your customers and has this changed with the cost of living crisis?

We’ve got a customer panel now that we’re super proud of. It’s now got three and a half thousand customers giving us feedback. We know there is a slight bias because those customers are the ones who are engaged and paying their debt off with us, but it gives us such a brilliant window into their lives.

We have set up a cost of living tracker with the panel where we’re asking about how people are changing their behaviour to cope. It started in August and some of the insight is more obvious, such as concerns over utilities prices rising. But with a deeper look, you can see that inflation is affecting the lower deciles of customers the most. It’s having a huge and, in many cases, tragic impact. In a recent survey, we have seen that more than a third of people are selling some of their possessions to earn more money and a fifth are having to work more hours. Around 40% of them already get help from charities or are going to apply for help very soon. Some people are too proud to get help from charities or claim benefits but it’s the result of extreme pressure on vast proportions of society.

How do you bring these insights alive and help people realise how it feels?

I’ve known many senior execs that have pored over data but don’t take the time to understand the genuine reality of what’s going on. The most important aspect is bringing the lives of our customers to life in the business. Until you see and feel it, it’s difficult for an organisation to really understand what’s going on.

We do regular call listening, but even that is all framed from our perspective. It’s all our agents trying to engage with the customers, understand the circumstances, and then decide the best approach and payment plan to set up. Sometimes it is incredible what you hear when you listen more. For example, a parent talked about how their daughter has autism and needs the light on to sleep. They were so worried that they won’t be able to afford that, which is heartbreaking. We’ve got another customer who has taken the light bulbs off their top floor so that their kids can’t press them on and off to reduce their anxiety and save money.

Is there anything that you do to tackle the naysayers who are sceptical?

There is already a strong belief that we need to help customers, but there is pressure from the commercials. You need to balance the customer agenda with the commercial pressures to keep the naysayers happy. When I’m investing in propositions or features that have never been tested in our sector before, I trust my gut. But you can’t just do it blindly and anchor it to your purpose, you must be able to demonstrate the impact by interpreting and analysing the data. Then play it back and show empirically the influence on customer behaviour and the benefits.

It’s tricky to be pioneering and leading the way. It requires the backing of an organisation and the exec. You’ve got to have proof of the impact to encourage belief. For example, there was a lot of concern with our app internally. Why would a customer want to have a debt collection app on their phone? But today the app is 20% of our digital business and we’ve proven that customers who use the app come back more regularly to check on their balance and stick to paying the debt off.

When trying to be genuinely pioneering, there will be things that just don’t make it through your exec. Don’t be put off by the fact that it’s not always going to fly. I would say that 30-40% of the initiatives that we’ve come up with over the last three years have failed to get approval. But that makes me happy because otherwise I’m playing it too safe.

Looking outside of Lowell are there any customer pioneers that you particularly admire?

Inevitably, I’m drawn to my experience with the Fintech space and the leaders in that territory such as Monzo and Revolut. Monzo led the charge on design and how you build an interface and experience that had been seen as boring and distant by customers. They have genuinely shaken up banking and had a clear influence on the bigger and more traditional banks. I would also add Patagonia and how they use their purpose. It’s so clearly part of everything they do, and I think it plays out for them with a clear commercial impact.

What advice do you have for any aspiring customer pioneers?

When you’re selling the vision of being a customer pioneer, you must land it in the language that a CFO and CEO would understand. Customer pioneers generally come from a marketing or operational background, and it can be very easy to slip into the territory of customer sentiment metrics. Always remember that investors will primarily care about getting a return on their investment. If you want to succeed as a customer pioneer, you must get the CFO and CEO onside with financial and commercial success.