Today on Real-World Branding, Sabrina shares insights from her career journey, how the Best Egg brand was built, and what they are doing in this peculiar moment to keep things moving for the team and their customers.

As Chief Strategy Officer, Sabrina leads the development of the company’s customer-centric growth strategy. In addition, she is responsible for brand strategy, communications, consumer insights, and customer experience. Prior to joining Marlette, Sabrina spent over 20 years leading successful business development and marketing teams in large global banks and high growth start-ups. If you like our podcast, please let us know and subscribe!

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Bill:

Greetings one and all, this is real world branding. I'm Bill Gullan, President of Finch Brands, a premier boutique brand consultancy, and thank you for being with us. Today's guest is Sabrina DeVito, who's the Chief Strategy Officer at Marlette Funding. We've been tried to get guests during this period of time, and again forgive the audio a little bit because we're doing all of this remotely of course, who not only have an interesting career backstory, and an interesting business that they're leading or managing, but also have a sort of unique set of wisdom, or level of wisdom when it comes to the coronavirus, and how their companies, and the economy in general is reacting.

Bill:

Marlette Funding provides under the Best Egg brand name, personal loans, and in many cases these are individuals who are consolidating debts, or who have had some financial disruption, and have needed and sought loans for that reason. As one can imagine, the overall economic displacement that all of us are facing is particularly challenging for many of Best Egg's clients. So Sabrina is going to talk about not only her own career backstory, and how the Best Egg brand was built, but what they are doing in this particular moment to keep things moving within Marlette, but also how they're making choices about how to support their customers or clients. So enjoy the insight of Sabrina DeVito.

Bill:

We are here, not here literally, but through the power of UberConference, and all these other amazing things with Sabrina DeVito, who's the Chief Strategy Officer at Marlette Funding, and particularly the Best Egg platform. Thank you for joining us.

Sabrina:

Hey Bill, thanks so much for having me.

Bill:

It's cool to see your face in this very peaceful room that you were saying you've converted into an office, or a meditation chamber because it's certainly not a calm time. So thank you for spending some time, and sharing your insight with us. Why don't we start maybe where we normally do with just a little bit of your own backstory, and what has led you to the role that you currently occupy with Best Egg?

Sabrina:

Sure, thanks. So by way of background I've basically been in banking or financial services virtually my entire career. My work efforts have always been in and around marketing, customer experience, strategic partnerships, branding, business development. I, throughout my career have always gravitated for what I call smaller challenger companies, but as a result of doing that I have also lived through three acquisitions. So I've been in companies that had been acquired, typically by large global banks. So I have both worked at small startup, kind of scrappy companies, and I have I ended up working at very large, global banking entities as well.

Sabrina:

After the last financial crisis, interestingly, I took a small sabbatical from financial services, and I actually joined an HR technology startup, where I actually joined the company originally leading their business development, but eventually became the CEO of the company. That was both interesting, and different, and also relatively short-lived as Jeffrey Meiler, who is the CEO of Marlette Funding, actually lured me back into financial services. So I actually came to Marlette Funding about five months after the company launched, which is about six years ago now.

Bill:

Yeah, amazing, and so just ... You were a Communications Major, an undergrad marketing branding roles, is there something about financial services that you fell in love with, and then maybe out of love with, or back in love with, or was that just kind of how this, sort of linear career progression has worked?

Sabrina:

Oh, let me tell you something, if you had asked me in college, "What is the last industry that you think you would be part of?" I would have absolutely said banking and financial services, and part of it is because by nature of the work that I like to do it's just not very numerical, and mathematic in nature. I didn't really have an appreciation when I was in college, for actually the level of marketing and communication sophistication that banks had. Most of my career was in credit card, where it is highly analytical. The direct-to-consumer marketing experience is incredibly important, and so I actually ended up there quite by dumb luck. I started very early in my career working for an event marketing firm in Philadelphia, and they had a couple of banks as their clients. Because I kind of had that on my resume, and I lived close enough to Wilmington, Delaware I actually sort of made a leap into banking. Honestly, I just couldn't have been happier that I stumbled across it.

Bill:

Yeah, it's interesting. Then let's talk a little bit about Marlette, and what you found when Jeffrey brought you in. You were instrumental in launching what is known, I think by those in the public domain at least, sort of market-facing brand that's called Best Egg, which is a ... sort of the personal loan platform with which Marlette goes to market. Could you talk a little bit about the ... what Marlette was founded to do, and kind of what the process was to build this really strong personal loan and consolidation brand, and sort of how that fell on the ground?

Sabrina:

Sure. So interestingly, the business was originally started to address a gap in the marketplace, which was created out of the last huge recession. Banks had significantly pulled back in unsecured lending, and at the same time really had failed to keep pace with technology. So lending at the time was both constrained and difficult, so there was a real opportunity to actually create a frictionless lending experience for customers. When we came to market our mission was simply to make money more easily accessible for people, so that they could enjoy life, and quit stressing over the process of actually borrowing. We, just to be abundantly clear, we developed, and we managed all of the marketing, the technology, and the servicing for Best Egg Personal Loans, which are actually originated through Cross River Bank. To date we have facilitated over $10 billion in loans to over 600,000 customers.

Bill:

That wonderful. So these loans are used in a variety of different ways, and I know this is a combination of, at least you intend it to be a combination of being very, sort of strongly data-driven, but also very human in terms of the experience. Could you talk a little bit, again, what you're comfortable sharing, I know some of this is proprietary, but what is sort of, for beginners the personal loan market, who does it serve? For whom is it sort of strongly geared, and effectively deployed?

Sabrina:

Sure. I'll speak specifically about what we do in the marketplace. So we typically serve a prime credit consumer, so to us that means somebody who is fairly well-established, who has had a good history of repayment of borrowing. What we originally had seen is after the last recession, because prior to the recession home equity was so readily accessible to the marketplace that people were having no problems borrowing, and being able to spend. Once you went through the recession most banks took some pretty extreme measures, both shutting down home equity lines, and reducing the amount of credit that's available to consumers, and so consumers were relegated mostly to borrowing on credit cards. Many of which, again, during the crisis had been repriced to higher interest rates.

Bill:

Right.

Sabrina:

So particularly in the beginning we saw most of our customers were coming to us because they had multiple high balance credit cards, and they were really wanting to consolidate, simplify their payment, and pay off those credit cards. Our product, just so you know, offers interest rates starting as low as 5.99%, loans up to 50,000, and the customer, their fixed payments, so the customer repays them over three to five years based on what they decide as their desired monthly payment. So mostly it started with this idea of paying off credit card, and consolidating debt, and even today we still see more than 80% of our consumers choosing us, choosing that as their main reason for taking the loan.

Bill:

Sure. Sure. So the process of launching Best Egg as sort of the marketing platform, could you talk a little bit about the strategy that was underlying that, and why Best Egg has been so effective in capturing, from your perspective, the market share, and the and the consumer relationships that it has?

Sabrina:

Well, interestingly, when we started the business we very much took the best practices from credit card, and applied them to personal loan only using technology as an enabler, and a differentiator for ourselves. I mean, we kind of think that the three core competencies of the business that led to the success really had to do with how we engineered data, how we underwrote those particular loans, and our operational effectiveness. So you kind of coupled those business mechanics with an attractive product for consumers, an attractive alternative to how they were borrowing at the time, and it's been a recipe for great success.

Bill:

Sure. Is there a reason why it made more sense to go to market with a nomenclature for example, in a marketing brand ecosystem around Best Egg than it would for Marlette or for something else? Is there a reason brand architecturally why Best Egg is sort of the platform that we chose to bring the market, as opposed to Marlette or something that was a little bit less, I guess marketing savvy?

Sabrina:

Well, let me just say two things. One, is the reason that we chose Best Egg is in the beginning, what we felt was that everybody, their ultimate goal in life is to build a nest egg, but a lot of times you get some bumps in the road where your debt accumulates, because there were unexpected expenses or situations that you couldn't avoid very much like today, and so you would ... The name Best Egg really came at ... take a Best Egg loan, and pay off your debt so that you can start building your nest egg, so that's sort of the genesis of the Best Egg brand.

Sabrina:

I will say for those who might want to learn from our mistakes, it has been challenging, especially as a startup company with limited budgets to actually have two brands. Our Marlette Funding brand is very much our business-to-business brand, it is the brand that our bank, and our investors who actually purchase the loans, that is the brand that they understand, and then we have, obviously operation of this Best Egg loan platform under a different brand. So if we were to do it all again, I think we would choose one brand.

Bill:

That fascinating, particularly competing against some deep-pocketed folks whether it's Marcus, I guess from Goldman, or SoFi, or others that we all are familiar from seeing them in our mailbox pretty frequently, and well beyond. That's fascinating.

Sabrina:

Yeah.

Bill:

So you mentioned today as a perfect example of a situation where a financially responsible person may see some interruption, and some challenge. Let's talk about that, and just for our listeners' benefit, we are recording this because we know how fast the world is moving right now, on Monday morning, the 23rd. So at this point, we're all waiting to hear how the federal negotiations around bailouts, and other things are going to transpire, and who that impacts corporately, or in terms of taxpayers. From talking over the last couple of days, it sounds like Marlette and Best Egg have taken some pretty important measures to secure the financial position of your of clients. Could you talk about, just sort of how you all are seeing this crisis, and the unpredictability surrounding it through the lens of the relationships that you're seeking to create, as well as extend with folks out there?

Sabrina:

Sure. So first let me just say, as human beings our hearts are just in general, going out to people across the world who are impacted in some form or fashion, and that, we are incredibly thankful for the people who are on the frontline actually responding to this situation. This is such a devastating situation, and one for which I think many people and companies were relatively unprepared for. For us, what's interesting is while we are a relatively young company we still have some of the habits that were formed when we worked for larger financial institution, so we actually had done a fair amount of event response planning in advance. We have a team of people who are actively monitoring the situation, and are activating the plans that we had laid out previously.

Sabrina:

So just to give you an example, as a company, by Thursday of last week we had deployed all necessary equipment across the business, and the appropriate processes for the entire company, including our call center agents to be able to work from home, and continue to serve our customers. So it was quite a heroic effort. From a customer perspective, as of Wednesday last week we had proactively launched e-mail communications to all of our customers, letting them know that we had flexible repayment programs available for them. We have been absolutely inundated with calls, and e-mails from literally thousands of customers who are requesting some level of relief in their payments right now. We are doing a fantastic job of handling those requests.

Sabrina:

So, first and foremost, the thing that we are trying to be focused on is to find opportunities to really help people who have been disrupted financially by this event. I would say the other thing, just to give you some context, I mean, we lived, this leadership team lived through the last recession in banking, and so we had some context of what happens when you have a large number of people who are financially disrupted. The issue with this particular situation is it was sudden, and it's deep. We had posted a survey on our website last week, and in the first couple of days with just a couple of hundred responses to that, it was close to 80% of the people that were reporting that they were suffering some type of income disruption, which was ... I mean, I was floored by that kind of response. Now understand, people are coming to us because they are looking obviously for some money, and this was not our customers per se that we were surveying. This was sort of out on our public websites, but I mean, my goodness, it's just amazing, the impact.

Bill:

Yeah, absolutely, and who knows how long either, and so some of the ... I would imagine within banking, or certainly with what Marlette is doing at this moment, there is this line between you don't want mass default.

Sabrina:

Yeah.

Bill:

Obviously, nor ... but the company has to operate, and there's some expectation that folks will fulfill their commitments, because that's the basis on which the company is able to lend to others who need it. Could you talk a little bit about that balance? I don't know whether the answer there is purely data-driven, or how you kind of get to what's both equitable, as well as financially responsible in terms of operating, and growing the company, but how does that feel to you all?

Sabrina:

Well, I think there's sort of two sides to the coin. One, is we have a group of existing customers, some of which are experiencing a financial disruption, and frankly they just need some flexibility in their repayment. We are making every effort, and we are being incredibly proactive to try to give them some level of confidence, that we are here to try to help them through the situation. On the other side, we have a lot of potential customers who are coming to us right now, to actually seek some additional cash, potentially to help them through this situation. I just want to be clear, the way our model works, we are kind of the service provider who is helping to source these loans for Cross River Bank, who in turn we help them to find funding for these loans through other institutional investors who want the loan.

Sabrina:

So we have a real obligation to our institutional investors, who keep the loans to ensure that we are finding people who are able to repay, obviously the money that is being lent. So we are being judicious about also looking at who, and how we extend new loans out to consumers. Part of the process that we go through, is in order for people to receive one of our loans, we do verify their information including employment. So we are looking carefully at people's ability to be able to repay during this timeframe when we are trying to figure out how to responsibly lend money on behalf of our investors.

Bill:

Absolutely, and it's a ... in some ways it's not a complicated value chain, but it's a value chain with multiple folks in it, and certainly on the consumer end there's a tremendous amount of emotion and uncertainty. I'm sure that there is, on the sort of institutional side too, and there you all are in the middle trying to figure all this stuff.

Sabrina:

It is a complicated balance game, and that is the truth. The balancing act is like we are trying to do the right thing for customers, and people, and do the right thing for our bank, and our investors, who are really an integral part of the business model.

Bill:

Yeah, no doubt. I know that we don't want to keep you longer than we said we would, but real quickly as we move along you mentioned the sort of rapid deployment of a remote working environment for the entire team at Marlette. I think we're all going through that to some degree, but yours is a larger enterprise than ours at Finch, we just ... we work at home periodically anyway, so we don't have these sort of complex plans. But culturally, how are you all fairing in terms of remote work, both from a cultural perspective, as well as, you talked about some of the processes, but how has it felt 10 days in?

Sabrina:

Well, I will say we too are, have always had a fairly flexible, remote working policy. So I would say depending on the area of the business that you are in, you are probably used to working from home periodically, or as you needed to. So for many, I think they were well-equipped. There were definitely areas of the business, like our operations group, and our servicing agents, who definitely were in the office every single day, and so it was a little bit more challenging for them. That being said, I mean, here's what I'll tell you I observed is happening across the business.

Sabrina:

So we start out every Monday morning with a message that goes out from our CEO, that just kind of recaps our latest observations, the actions that we are taking, and gives them some kind of direction for what we need them to be thinking about, and doing this week. Each manager, myself included, has sort of a daily huddle also early in the morning to touch base with folks, answer questions, and to again, make sure that people stay focused on the right things while we're working remotely. On Wednesdays then we have a live video session with the entire company, and we spend half of the time, or at least we did last week, half the time talking about the circumstances ... We spend the last half of the time doing what we do every week, which is just, and we're trying to kind of keep some of the normal practices that we had across the business going.

Sabrina:

Then last week we wrapped up the week with a quick e-mail out to employees, just kind of letting them know how we thought things were going. We've opened up Slack channels to try to capture feedback, and at the same time capture stories, and photos, and experiences that we are a repurposing into our social media channels to actually make available more broadly to our customers, or any of our followers on those channels. So listen, no one works these from home for extended periods of time like we are anticipating. So that has been an adjustment, but I think the company has just done a really good job of trying to stay connected, and be responsive to what we're hearing are the needs of people, that are probably going to be doing this potentially for a couple more months.

Bill:

Sure, absolutely. Last quick thing, your title, and our work together has been focused on you're working on strategy for this company, and that includes a lot of thinking around the future, whether that's new platforms, new products, new customer types, not only how does Marlette execute today, and how does Best Egg succeed today, but what is the next increment of time look like. As a leader, and as a strategist, how are you sort of balancing those two hats being present-focused, as well as being future-focused? Does all the forward-looking stuff stop, and all hands are on deck to manage the existing moment, or how do you think about it? I imagine the answer to that is no.

Sabrina:

Well, it's interesting because I, as one of my sort of extension of my job, I actually manage all of the company communications. When I sat down with Jeffrey last week to prepare for the weekly results, review the live video, he said I really have four overarching goals. The first is, we have to figure out opportunities to help our customers who have been disrupted, and not only just help them by lending, but let's find other ways whether it's content, or resources, or other things we can do for them. The second was, listen, we have to figure out a plan that is going to allow us to exit this situation stronger than when we entered it. As part of that he has said we want to continue to invest in the new products, and capabilities that we're on our strategic roadmap. Now it might be at a slower pace, it might be slightly differently, but as of right now we have a number of things, including capability to allow people to pay off credit cards directly. We have a secured loan coming out. We have an expansion of our customer service website, that's going to allow people to be able to pick payment plans. We have a credit card on that's in flight for later this year, or early next year.

Sabrina:

There are a lot of things, and his message was keep those things moving, albeit at a potentially a slower pace. The final thing he said is, and we just have to be highly aware that situations like this present opportunities, and we want to be in a position to take advantage of those opportunities that will serve our customers, and ourselves well in the long-term. So I thought those were great goals, and a great message to get out to the whole company.

Bill:

It's a very balanced way to operate as well as to think, and it is hard as a leader in a smaller scale business, as I am, to keep the eyes both down, but also up when it comes to the internal, and the external piece in the moment, as well as what comes next, and what happens in the future. So Sabrina, thank you so much for your time, and insight. It is unprecedented territory, the help that you all are providing, A, through flexibility with your customers, as well as future lending, as well as just the overall sort of culture of a place that we've come to really respect, and admire, I'm really grateful for your time.

Sabrina:

Yeah. Thanks so much, Bill, for having me on, and by all means if there's anything else that we can do to be helpful, please don't hesitate to call on us.

Bill:

Thanks to Sabrina. She has noted, is very much in the middle of not only keeping a growing company growing, and working, but also helping the client base of Best Egg, that is sort of, perhaps even to an extraordinary degree, subject to the crosswinds, and challenges of this particular economic moment, putting aside the public health aspects of COVID-19.

Bill:

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Bill:

Then now we've actually ... We're going to do back-to-back weeks during this because we're at home. It doesn't mean we're working less, but we're at home, and so we don't have to spend a lot of time on the roads getting from meeting to meeting, and clients are at home too, and they're willing to share, particularly those who have interesting stories about this particular moment. So if you click subscribe you will not miss a single one. The last way to help us, and engage with us is to keep the dialogue going on Twitter @billgullan, or @finchbrands, on Facebook, on LinkedIn, any other place, we just really appreciate our listeners, and we're going to do our best to keep the content coming, particularly that, which is always interesting to brand, and business builders, but also particularly interesting in this peculiar time in which we find all of ourselves. So we'll sign off with best wishes for continued health and prosperity, at the cradle of liberty.