Trevor Harvey writes:
We have a longstanding segmentation which helps us, and our clients, to understand consumer attitudes to financial services, so we have used it to explore attitudes to the credit crunch. The segmentation tests for levels of involvement in financial provision, along with levels of risk one is willing to accept. (The current segment sizes are above, along with the original percentages when we first built it ten years ago.) ‘Pressured providers’, the largest segment, are engaged with their finances because they have to be.
The main finding from the analysis, which we wrote up for WARC, the World Advertising Research Center (subscription required, free trial available), after presenting it to clients, was that for two of the segment groups, the Pressured Providers and the Free Thinking Independents, debt was integral to their lifestyle. As I say in the WARC article,
attitudes towards debt, which have been built up through easy access and optimism, are not likely to dissipate… appetite for borrowing is unlikely to diminish in the two groups noted for driving the debt market. Pressured Providers will continue to need help because they have no other means of survival, and Free-Thinking Independents will continue to take as much as they’re given to help fund a lifestyle born of attitude rather than means.
Market conditions provide some constraints on the ability of financial services companies to provide loans. But there are also reputational risks in lending to people who are borrowing under pressure and who may struggle to repay.