Elliot Moss
Welcome to the Jazz Shapers podcast from Mishcon de Reya. What you are about to hear was originally broadcast on Jazz FM however music has been cut or shortened due to rights issues.
Good morning, welcome to Jazz Shapers, the first of 2019 and I hope you are having a good one and a Happy New Year to all of you. It’s where the Shapers, if you recall, of Business join the Shapers of Jazz, Soul and Blues. They come together perfectly as if we have always, always done this and indeed this is year number eight I believe. My guest today on this very first programme of the year is Alex Perrin, CEO and Co-Founder of ismybillfair.com, a website aiming to highlight the inequality of pricing by big businesses. Alex has spent most of the last 20 years working in commercial and pricing roles at big service businesses including Virgin Media, British Gas and RAC – quite big as I said. Then as he says, the poacher turned gamekeeper and you will be hearing all about exactly what that looks like. Alex and his next door neighbour, now business partner, realised not only were loyal customers not getting fair deals, so called price comparison websites weren’t working in the interests of most consumers either because 79% of people would rather get a fairer deal without needing to switch and that’s me included and I am sure you as well. Ismybillfair.com was created to expose and tackle the loyalty penalty in which loyal customers are overcharged for services such as broadband, energy, mobile and breakdown. They support consumers in challenging their providers for a fairer deal in return for staying with then. Thank you so much for joining and hello.
Alex Perrin
Hello Elliot, thanks for having me on.
Elliot Moss
It’s an absolute pleasure. Tell me in your own words and I explained a little earlier what it is, what I think it is, what ismybillfair actually doing? What’s it about? What need is it filling?
Alex Perrin
So as you said in the introduction, we exist to tackle the so called loyalty penalty. What we are really trying to do is ensure that loyal customers of big companies across a range of categories pay fair prices. The site fundamentally does two things; it helps you see whether your price is fair. So we show you how the price that you are paying your broadband provider for example compares to what other customers are paying the same provider for the same package and then if you see you are paying a fair price and getting a good deal then fantastic, take no action but if you are over paying then, as you also said in the introduction, people just want to get a fair price. So most people don’t set out to switch, in our research we saw 79% of people said ‘I would rather get a fair price from my existing provider rather than having to switch’ so we help them challenge that provider to give them a fairer deal for staying with them.
Elliot Moss
It sounds such an obvious idea and in my experience of obvious ideas they are the good ones because I myself will always at the end of the year as my insurer says ‘it’s gone up by X percent’, I’ll say ‘excuse me I’m not sure that’s fair’ but this is much better because you are basically making it easy for people like me and anyone one else to go in there and do it. Where did the idea come from? Was it one of those moments that you had that I just expressed?
Alex Perrin
Yeah so, so my background is I, I previously worked in commercial and pricing roles in big businesses. Those businesses and those categories have been disrupted over the last 10, 15, 20 years by, by the emergence of these price comparison sites which are now absolutely huge businesses in their own right.
Elliot Moss
And we’ve had a few founders of those businesses, Confused.com, we had Sara Murray on here many years ago, we’ve had John Paleomylites of BeatThatQuote.com, sold it to Google. Big businesses been doing this for years but carry on.
Alex Perrin
So what they have been doing for years is helping people get a fairer deal by switching. However when you look at the stats what’s actually been happening over many, many years is despite the fact that there is now this massive switching industry with all those huge marketing budgets, every time you turn on the TV you see the meerkats of the opera singer, levels of switching just aren’t going up so the big realisation was ‘hang on a minute, that model of big businesses creating attractive packages to entice people in and switching sites supporting that and encouraging people to switch’ just isn’t working for many consumers out there and in fact I would argue it is not really working for the telecoms or energy businesses as well so I thought there has to be a better way. The problem and the fact that this model just wasn’t working across the board was in my mind for a long time and then the idea just came to me and I thought I have to go for it.
Elliot Moss
Let me go back a little bit. I know you went to Liverpool University; I know you graduated in an excellent year to graduate and that’s 1993 – the same year as me – and then you went in to… you did all sorts of stuff. Now I don’t need you to kind of plot every single thing that you did but corporate life for you, you obviously enjoyed it Alex because you did it for two decades. What was it about corporate life that you really liked and why were you happy to say goodbye to it, part two of my question, after 20 years?
Alex Perrin
Crikey so… yes I did work for some big businesses, you know I enjoyed being there in a big company, understanding how it all worked. In a big business it is quite easy to get involved in something which you then see out there on an advert or on a billboard and you can say to your friends or your mum ‘that’s what I’ve been doing’ and of course as long as you are, as long as your project gets funded or whatever then there are unlimited resources and in fact it is only now that I have become an entrepreneur and started my own small business that I realise how much I took for granted and how there is no one to come and fix that dripping tap in the kitchen and so on.
Elliot Moss
Or when your phone doesn’t work.
Alex Perrin
Or when your phone doesn’t work.
Elliot Moss
Or your laptop or whatever it might be.
Alex Perrin
Yeah.
Elliot Moss
But the, but the things that you liked I imagine security would be one, the fact that you are going to get your pay cheque at the end of the month – was there something nice about corporate culture as well for you?
Alex Perrin
Yeah I mean I, so I started off, I had quite a transition in my career so I started off in container shipping and worked in that world for a few years and then after a while I joined BA and I joined the cargo division of BA but then moved into the marketing team.
Elliot Moss
You are like my mother-in-law, she likes boxes. Everything is in a box. I mean I am not joking, big containers and then inside the big container is a little container. But was there… I mean joking aside the cargo piece obviously related to the first part of your career. Is there something about that world which you found fascinating or did you just find yourself in it?
Alex Perrin
No I, I just stumbled into it and to be completely honest, I saw an advert for a graduate training scheme for a shipping company which said ‘join this company and you will spend some time working out in the Caribbean’ so…
Elliot Moss
So you thought that sounds good?
Alex Perrin
…so I did that and it’s been downhill since then.
Elliot Moss
And then from BA you then went into where?
Alex Perrin
Yeah, so, so BA I made the transition from the cargo division into the passenger marketing team and I think I, what I wanted to do was to work in a consumer business. I am interested in how consumers think and feel and I wanted to get close to that. So that’s… that, being in a business that size of BA afforded me the opportunity to make that kind of transition and then since then I, I moved to RAC, then British Gas, then Virgin Media so all service businesses.
Elliot Moss
And pricing is a part of what you do?
Alex Perrin
Yeah I think I have always been quite analytical and enjoyed, enjoyed that mathematical challenge of working in that kind of team and also product development so working out who the audience are, what you are going to develop to meet their needs and how to price it I think is quite a nice round challenge so, so I spent many years doing that across a range of categories and I did really enjoy it.
Elliot Moss
That all sounds… and that sounds fine obviously decent you know, nice as I mentioned earlier, that safety of a big company and as you said, resources. So you now have the idea, I am going to jump you back into that moment when the idea comes…
Alex Perrin
Yeah.
Elliot Moss
…it starts to percolate, starts to ferment a little bit and then at some point you say ‘I’m going to do this’. Do you remember where you were, who you were with when you actually said ‘do you know what this is happening’?
Alex Perrin
So I remember exactly that moment when I made the commitment because I was sitting at my kitchen table with my next door neighbour, Graham, who is now our CTO. Graham had just left the business that he had been at for 20 years and he was deciding what to do with his life and I was chatting to him and saying ‘look well I’ve had this idea, you know, I see this massive price comparison industry and I think they are missing the point and failing to deliver what people want which is a fairer deal for staying’ and so I think it was one part fortuitous that Graham was at that stage in his life, one part that I had had the right idea and then probably one part midlife crisis and I thought ‘crikey I am in my mid-forties, if I don’t give this a go now I never will’ so yeah we jumped in. We shook hands there and then and handed my notice in and we started making plans.
Elliot Moss
Stay with me to find out much more about how those plans have evolved in a very fast space of time actually, that’s Alex Perrin he is my Business Shaper, CEO and Co-Founder of ismybillfair.com. Lots more coming up from him in a few minutes but before that some words of advice from our programme partners at Mishcon de Reya for your business.
There are many ways for you to enjoy all of our former Jazz Shapers from 2012, 13, 14, 15, 16, 17 and 18 are all in there. You could ask Alexa if you would like to play Jazz Shapers and there you can hear many of the recent ones or if you pop Jazz Shapers into iTunes or your own preferred podcast platform as they call them, you can enjoy the full archive but today, right here, right now, the beginning of January 2019, I have Alex Perrin, CEO and Co-Founder of ismybillfair.com. We were talking about your move from the world of boxes, as I said my mother-in-law loves boxes, I’ve said it again now, I am definitely in trouble and then movement towards people and pricing and product and then that moment where you sat with your neighbour who luckily, you know, not that there is anything wrong with gardeners, wasn’t a gardener because CTO’s need to be good at you know, the technology thing. So you made that commitment and I like that phrase, the vibe between the two, you said you shook hands, were you sure that was right? Was there any doubt? Or was there loads of doubt but it was kind of exhilarating?
Alex Perrin
I think there was, there was no doubt that it was… there was clearly doubt as to whether we were going to get this thing off the ground and whether we could get people to come to the site and whether it would work and you know, it is still really early days for ismybillfair, we are only just going big now but I think there was… I felt no doubt that it was the right thing to give it a go. As I said, if I didn’t back this idea now then I would never, I’d probably never get out of that corporate world so.
Elliot Moss
And what was it like resigning and knowing that you were saying goodbye to that kind of world?
Alex Perrin
It felt fine. I think I made the right decision, I went in and spoke to my boss. He wished me luck, I think he admired the fact I was going on to do something like this as opposed to just moving to another corporate role and a competitor or something like that so, so yeah it’s been an enjoyable time and I’ve learnt such a huge amount since we started.
Elliot Moss
The first thing you guys did… I mean that’s what I want to ask you, the very first thing that you and Graham, your partner did was what?
Alex Perrin
The very first thing we did was decide that we couldn’t just sit in my kitchen and we needed to find somewhere to work so in classic start-up style we, we then quickly remembered that he knows somebody who owns a bar with a function room that is generally empty Monday to Friday day time so we went and did a deal to work out of there so that was our, that was our office for the first six months and then I think the best thing we did was rather than just jumping straight in and starting building a website, we took the time to research this properly. We took the time to map out what the customer experience should be, research which products our model was right for, in fact I think it is right for practically every single service product for which you as a consumer pay by direct debit and then we started building.
Elliot Moss
And it’s just been the two of you?
Alex Perrin
We’ve grown a little bit, we’ve had another five or six people join along the way but our model is to, to keep the team really lean and then where we can outsource to experts so we’ve got some agencies helping us with some of the marketing, we’ve had some outside people do some of the coding and building and developing but year, Graham and I have stayed at the core of it and then we’ve added a few more people as we’ve gone along.
Elliot Moss
And investment, have you had investment or are you still you guys the 100% equity people?
Alex Perrin
So we had an initial round of investment at the start of 2018 which helped us get the site live and bring the first users to the site and really saw us through that initial phase of learning, developing, tweaking and refining, you know we are constantly debating when we should go for the next investment round and so on so deciding how quickly to grow and how quickly to scale is something that we’ve been wrestling with ever since day one really.
Elliot Moss
And that can’t be easy because kind of how do you do it, you are basing it on some quantitative numbers that you may reach but you may not and then there is a speed question and then there’s the cost of the investment, I mean things that are sort of imponderables?
Alex Perrin
Yeah and despite many years in big business, having investment conversations was something I’d never been near or never had to do so we were lucky in that we knew we had personal friends who had been through this, who had started their own businesses and who were able to guide us through the process and also make some introductions so we had some useful introductions up front, we got introduced to a chap called Peter Scott who is now our chairman and Peter has been an enormous help in all that process as well.
Elliot Moss
Founder of WCRS Ad Agency and has been on this very programme. Stay with me for more from Alex Perrin as we explore what it is like to start a business up and relatively recently but also to grow awareness super-fast and we are going to actually touch on a very topical thing which is an issue raised by the Citizen’s Advice very, very recently. Time for some more music right now though, Earth, Wind and Fire with That’s The Way Of The World.
That was Earth, Wind and Fire with That’s The Way Of The World. I am talking to Alex Perrin, we are talking about the movement from the corporate to the private world, the movement from the kitchen table to a room, a function room in a bar and a commitment which you talked about and then the research that goes into it in terms of getting something off the ground. You need a bit of luck in business as well, a lot of luck and people I meet are, they work hard and they seem to also bump into a lot of people who have also done really, really well. Your bit of luck is that it sounds like this is the moment for your business because there is a furore around the notion of being charged too much and indeed I think you’ve been aiding the Competition and Markets Authority in its investigation into what is called the Loyalty Penalty Super Complaint and there is a publication that popped up very recently. Tell me a little bit about that and just how lucky you feel that that happened without, I mean it’s not lucky for consumers but for the nature of your business?
Alex Perrin
So firstly you know what the Super Complaint is, well Citizen’s Advice raised this Super Complaint at the end of September and they called it the Loyalty Penalty Super Complaint. Fundamentally they say that we can’t continue with this situation in which loyal customers of broadband companies, insurance companies, mobile businesses etcetera end up being charged so much more than the much lower prices paid by new joiners and the Super Complaint stated that despite many, many years of switching being pushed as the remedy it just hasn’t worked for people and what is now needed is a solution which enables or results at least in loyal customers getting a fairer deal. Was it luck? Well in many ways we had already spotted that as the issue and had set out to solve it. I think what it has done though is, it’s brought this to the forefront of the news agenda and its really top of mind now. So we clearly set out as ismybillfair before the Super Complaint was even raised to build a solution but it’s great now that there is so much publicity arising from this that is helping us bring more traffic to the site which means that we are there to help more of those loyal customers get a fairer deal.
Elliot Moss
Have some of the big energy companies and broadband companies and so forth come to you and talked to you about what they are doing and if so, how have those conversations gone?
Alex Perrin
We were talking to them anyway before the Super Complaint but what is very clear is that this Super Complaint has now highlighted the issue in a way which means that it has to be dealt with. So yes that has helped us have the right conversations with the right people because we are a ready-made solution. The other thing that we have been doing is working with the CNA themselves on the initial stages of their report and also talking directly with Citizen’s Advice. Now Citizen’s Advice have stated to me that they always thought that the issue was even bigger than they had stated, they calculated it as being a total overcharge of 4.1 billion pounds across five products. What we’ve been able to do is use the data from the users of our site to dig into that in much more granular detail and calculate the true extent of the loyalty penalty.
Elliot Moss
And what is it?
Alex Perrin
We think it runs into tens of billions and counting. So for broadband alone the total overcharge as defined by Citizen’s Advice comes to 4 billion pounds. So they had 4.1 across five categories. We are seeing 4 billion across one of those five, in one of those five categories. Across the four categories of broadband, mobile, car breakdown and energy…
Elliot Moss
Yeah.
Alex Perrin
…we’ve calculated this as being about nine and a half so if you were then to add back in savings and mortgages and home insurance which were part of the initial Super Complaint which we don’t yet cover and then you think about categories like car insurance and even things like gym membership, this will run into billions and tens of billions of pounds.
Elliot Moss
Do you see yourself, I mean, as a crusader now as much as… and I want to understand the commercial model as well… is it that when someone gets the price with you that you somehow or other have a percentage of the saving that they have made, is that how it works?
Alex Perrin
Yeah so we have three revenue streams. The first is the most well-known which is that if people don’t want to stay and they do want to switch then we can help them switch and we make some money from that in the same way as any other switch site. The second, which we haven’t actually switched on yet is advertising on the site and the third which we’ve only just switched on since the start of this year, is we do charge these existing businesses to retain their customers through our stay model.
Elliot Moss
Got it.
Alex Perrin
So if we challenge a business and we say, look we’ve got a hundred customers of yours who don’t want to switch they want a fairer deal then we make a charge as we pass those hundred records through to that business in order that we cover the cost of operating. But the crucial thing there is that if we didn’t exist and you know, the situation for the last 20 years has been that those hundred disgruntled customers have got nowhere to go other than to switch, if those customers switch away they need replacing and the average cost of replacement in the service industries can be well over £100, sometimes over £200 so that means that the service businesses are spending hundreds and millions of pounds each year to standstill. They are paying to replace customers who are switching. Our entire business model is about saying ‘look that’s not working for you as a business, it’s not really working for the consumer either, what we are about is coming up with a solution that works for both’ so we are very consciously undercutting switching with staying which we think is a win/win for the consume and for the service business so, so yes we… yes that’s a revenue stream for us but our commitment to them is that we need to do that at a fraction of the cost, less than 10%....
Elliot Moss
…of what they are having to pay.
Alex Perrin
Yeah and an acquisition is actually a replacement. These are saturated markets, it’s a massive game of musical chairs so we are setting out to, to help offset that enormous existing cost with a much lower cost which we think is good business all round.
Elliot Moss
We will have our final chat with my guest today, Alex Perrin, plus we will be playing a track from Van Morrison and Joey DeFrancesco, that’s up in just a moment.
That was Van Morrison and Joey DeFrancesco with You Are Driving Me Crazy. Alex Perrin is my Business Shaper just for a few more minutes and we have been talking about companies that are not playing nicely with their loyal customers and how it is actually more expensive for those companies themselves to go and find new people when their current ones who are slightly disillusioned with the fact they are not getting a good deal leave and that sounds a smart thing. So you are… it’s relatively early days for the business and you’ve talked about, we’ve touched on the excitement of the idea of moving away from the old world. Have there been times in these early months where you’ve gone ‘eesh, I’m not sure about this’ or have you been totally convinced that this is the right path for you?
Alex Perrin
Probably a bit of both. So there have definitely been times where I’ve questioned, did I make the right move and this is, this is turning out to be much harder than I thought and I think I probably underestimated all of the other functions that I just took for granted in the big businesses that I had worked in so you know, we’ve for months and months and months, we didn’t have a qualified accountant. I was having to build all the excel models and make sure that they matched the cash in and out of the bank account, I was the one having to deal with the external legal firms, nice people that they are and so on so it’s you know, there have been some really difficult times but fundamentally I think as soon as we put the site live and we started getting consumers through the site I thought we are doing something here that people find useful and that has a mass audience and I think if you build an online business which does something useful for a mass audience then there has to be a way to make that work so you know, as I said, it is early days, we are still playing with that blend of revenue model, we are not actually making any money yet but I think we have a…
Elliot Moss
Oh that’s fashionable, so fashionable.
Alex Perrin
…it is.
Elliot Moss
You don’t want to make any money Alex for at least 10 years and like many guests I have spoken to, they are ‘oh no, no, no’. Facebook didn’t make money for 15 years so keep going you are doing well, 14 years to go.
Alex Perrin
Good, I am hoping that our investors are listening to your wise words there.
Elliot Moss
They know, they know, it’s a patient capital gain, that’s what people say. But in terms of the support you’ve had emotionally, you mentioned your, your family. Has that been, has your wife been very supportive, has she been someone that you have gone without her this would have been really impossible?
Alex Perrin
Yeah definitely. I mean I think she was, she was supportive, she also you know, I lived down in Winchester travelling up to London each day and I was finding it increasingly difficult, I’ve got two children, wasn’t seeing as much of them so I think I’ve definitely had a better work life balance but also I think you know, it’s been great having her around and I know that Graham would say the same about the support he has had from his wife and family and friends etcetera so you do need that because you know, starting off any business the one thing you can guarantee is there will be some hurdles or obstacles that you hadn’t even considered.
Elliot Moss
And you touched on Peter Scott whose the chairman and as I said, previous guest here on Jazz Shapers. Important that you have someone I imagine who has got more experience, more wisdom and is going to challenge you. That’s a really critical role isn’t it I imagine?
Alex Perrin
Definitely yeah, I’ve got huge respect for Peter, he’s, he’s obviously been through this before, he’s built businesses from nothing, he knows how to find and then deal with investors so yeah it’s been, it’s been good having him on board. Yes he is challenging but in a really positive way.
Elliot Moss
And I imagine that there is no one silver bullet within the advice he gives, it’s more generally that you know you are going to have a proper conversation about the issue?
Alex Perrin
Definitely, definitely.
Elliot Moss
It’s been really nice talking to you Alex, really good luck, this is a big year for you, 2019 I think will be the time when we all get much more conscious about just how easy it is to call and hold companies that give us different services to account and that must be right. Just before I let you go, what’s your song choice and why have you chosen it?
Alex Perrin
So my song choice is Brand New Love by Grupo X. I think this is a fantastic track, it’s written by Johnny Enright who is my oldest friend. Johnny and I grew up in Yorkshire many years ago and then when I first moved to London it seems that every Saturday night he was playing live with this band at the Jazz Café in Camden so I have many happy memories of watching him up on stage playing this track.
Elliot Moss
That was Brand New Love by Grupo X, the song choice of my Business Shaper today, Alex Perrin. I loved it when he talked about making the commitment and you’ve got to do that. He talked about the importance of research before jumping in and we’ve heard that before and finally the importance of support, whether that’s your family, whether that’s your friends or whether that’s a chair with a lot of wisdom on his or her side. All really, really good advice. That’s it from Jazz Shapers, have a fantastic weekend.
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