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Should P2P platforms cross-sell?
During LendIt Europe Cormac Leech, Principle at Victory Park Capital Advisors, suggested that peer-to-peer lending companies should take advantage of cross selling which is an untapped source of revenue.
Once banks have acquired customers they will typically try to cross sell loans, credit cards, insurance and other financial products throughout their relationship. Cormac suggested that peer-to-peer platforms could go further and cross sell holidays and tech goods and share some of the revenue with the platform's customers.
On some levels this makes financial sense, but when I heard this I had to shake my head. There may be some merit in cross selling other financial products on a P2P platform, but I would argue that unless this helps grow the brand and deepen the customer relationship it may at best detract from the platform's primary aim - which is to match lenders and borrowers - and at worst lose customers. Would you buy a holiday from your insurance company? If not, how would you feel about your insurance company offering to sell you a holiday?
Some customers have migrated to peer-to-peer platforms to get away from some of the traditional spamming practices that some companies operate. If peer-to-peer companies were to adopt some of these cross selling practices then some customers may simply go elsewhere.