When to Stop Growing
This is a story about when to stop growing.
I lead design at Creditspring, a subscription-based fintech company in the UK. Our members receive two personal loans per year to help deal with unexpected expenses or build credit through repayment. In the UK, credit is tighter than in the US, which makes common tools like credit cards and overdrafts out of reach for many.
Loaning to regular people is riskier during economic downturns driven by COVID and inflation. Creditspring had to find new ways to protect our members from falling into debt. So we introduced more stringent lending criteria. This dropped Creditspring’s growth rate based on signed loan contracts to -80%.*
We don't want to give loans to people who can't afford to repay them, but our business is lending. If we stop lending, do we stop growing? In this newsletter, I will share how we redefined our value proposition to continue to expand safely during times of crisis and avoid losing potential future users forever.
Yours in growing responsibly,Sabrina Loi, Chief Design Officer, Creditspring
*Creditspring defines their growth rate as number contracts signed/applicants vs previous quarter
Creating the Free Membership
The best way to prevent predatory practices is to pump the brakes on lending through stricter criteria, especially for new members who don't have a history with us. However, our core membership product is personal loans. So how can we reduce lending without sabotaging retention and our future membership base? The answer: Find alternative value propositions we can offer besides loans.
Speaking of alternatives… Creditspring provides its members with a stability score that’s a more holistic stand-in for a credit score. The stability score helps to track members’ financial well-being. More than 65% of our members adopt the score.
We decided to offer the score for free to new users whom we couldn’t lend immediately during the crisis instead of just rejecting them. This created a new tier of membership that didn’t include paying to borrow.
Since introducing the free track, more than 20% of rejected applicants have joined Creditspring even though we can’t lend to them immediately. We invite these free members to reapply for loans as the economy improves, and they are more likely to be eligible.
The new membership has become a growth channel. Every month, we convert 10% of free members into paying/borrowing members.
New Value Propositions
Today, Creditspring has over 60,000 free members. They are potential customers that would’ve otherwise been turned away. This is now an evergreen growth channel for us. More importantly, it increases our positive social impact through financial education anchored in the stability score.
The stability score is apart of an expanded program called the Stability Hub to navigate member finances with a tangible way to track how close they are to a Creditspring loan. It provides clear direction on how to improve unlike traditional credit score programs.
As a designer, it's immensely satisfying to evolve our membership value proposition beyond lending to building creditworthiness. As a growth practitioner, I feel reborn to go beyond acquisition to a long-term view of sustainable prosperity for our business and members.
About the author
Sabrina is the Chief Design Officer at Creditspring. She contributed to building Creditspring from 0 to 200,00+ members focusing on product strategy, growth design, and business goals. During the past 27 years, she has worked as a Creative Director, a UX consultant, and as a professor at the European Institute of Design (IED).