P2P and investor communications

One of the main reasons why P2P has been able to evolve so quickly is the Internet – you are able to provide access to investments to people with ease, removing all the pesky time consuming elements of real life interaction. Theoretically this should also mean ease of communications – access to information should be unlimited and all investors should be happy. In theory this is the case, in practice investor relations seems to be a rather vexing problem for many P2P sites.

communication

What do investors want?

You would think that this question is not really that difficult to figure out when it comes to investor relations. The key things most investors want to know – what is happening to their money, are there any changes/risks they should be aware of, and they want live updates for the current situation. However, in the past month there have been many communications disasters, that others should surely learn from. I’ll go through some of them to explain what I mean.

Twino will-they-won’t-they interest debacle

A while back the Latvian P2P site decided to drop their set interest rates from 14,9% & 12,9% to 10%. The announcement was made rather out of the blue and went into works the next day. Not good – people need to know things in advance. Today, however, after two weeks of hassle (suspiciously sudden buy-backs, their IT system currently miscalculating interest / xirr), today they announced that some loans will be back to 12% interest.

Out of all the things that investors do not want, number one is uncertainty. If you make decisions – let investors know (enough time in advance!), and explain thoroughly why you are doing something. Overall, they received the ire of many investors over the recent troubles, and it will leave a mark on their reputation.

Crowdestate server meltdown debacle

As crowdfunding real estate has reached new levels of popularity in Estonia, therefore from previous server issues it might have been reasonable to assume an epic server meltdown was in the cards for them. As it stands, with the newest project they listed the servers died even before the bidding started, which resulted in a full 3-day delay while the IT team managed to fix the issue.

Overall, a server meltdown is excusable, since they probably didn’t assume that such a level of popularity would reached so soon. However, the bigger issue here ended up being the fact that the communications that accompanied the problem lacked severely, and even though many e-mails were sent out (eventually), then once the project was reopened, then it was reopened before the announced time (has happened many times), therefore a large amount of interested investors were left out, which caused further displeasure.

Invest into investor relations

While in the classical sense investors aren’t the site’s clients but the people who take out loans are, then in the long run investors have much more of a say in how any site does. Bad feedback from investors (who, for example, write blog posts), creates a lot of the external feedback that people find when they are looking for information. It’s worth it to invest into investor relations and if sites are unsure about what kind of info investors want, then asking the investors works rather well.

Recently the three sites that probably deserve most praise are 1) Mintos – they send regular press releases, talk on FB (and stopped sending e-mails 5 am after I requested it! ) 2) Investly -they have employed a full time investor relations person, who answers all sorts of obscure questions that bloggers such as myself have (for example info about legal aspects of factoring), 3) Bondora (surprisingly!) – CEO’s personal presence in the FB group, plus increased amount of newsletters and blog posts.

 

4 thoughts on “P2P and investor communications

  1. Good article.
    As an investor I very much expect to be treated by the marketplace as a client.
    If they want me to reinvest my money I expect the marketplace to deliver a service that is up to my expectations.

    And some marketplaces seem to ignore the following:

    – Winning and satisfying a borrower means they do business once (at least with consumers), also there is a chance for repeat business but that will mean the next loan is usually a couple of years away

    – Winning and satisfying an investor means they’ll continously do business with this investor for years, because likely this investor will reinvest over years (there are nice LC charts showing that)

    And I also agree that investors like predictability and advance notice.

    1. Exactly! The local P2P portals here seem to have forgotten how much value there is in an investor bringing in more and more money – saves them the trouble of finding new investors constantly.

  2. I am really happy with ViVentor. They are answering really fast and they are the only platform offering a support chat. I think that is an easy way to communicate for investors.

    1. So far I’ve also had very good experiences with them, quick responses via e-mail as well. Now, if they just sped up the IT development speed :)

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