|Image credit: Ky Olsen|
As we look to scale, however, we realize that one of the biggest challenges will be customer acquisition; our competitors have branches in every low-income neighborhood in the state and boast significant marketing budgets. To put predatory companies out of business, then, we must have an effective and cost-effective marketing strategy. To that end, we recently partnered with Professor Joe Stasio, a marketing professor at Merrimack College, to develop just such a strategy. And the first thing he recommended we do? Listen to our clients.
Two weeks ago we held our first focus group with seven borrowers, and the results were fascinating, surprising, and insightful. For instance, we were surprised to hear that the majority of participants love that we hold them accountable, which we do by requiring that they provide proof of loan purpose (such as a disconnection notice from their utility) AND checking in to ensure that they spent the funds in accordance with their plan. This is in stark contrast to a concern we've long nursed, namely that this requirement is patronizing and "overkill" for such a small loan.
When asked to write down one word to describe Capital Good Fund, participants came up with things like "honest," "non-judgmental," "fair," and "affordable." One of their biggest concerns was that we are a "hidden gem," with one person bemoaning that she hadn't heard about us sooner. Despite the payday industry's claims that they have 90% satisfaction rates, every single person in our focus group had tremendously negative things to say about payday lenders--things like: "[payday lenders] are doing a number on poor people," and "the way they get you is that you have nowhere else to go, but then you are trapped."
In short, much of what we heard was not what we expected. We didn't expect that borrowers prefer reminder calls about loan payments; that their hatred of payday loans and understanding of how predatory they are is a big reason for applying with us; that not being judged and feeling comfortable is as important as our rates and turnaround times; or that offering applicants a loan amount less than that for which they applied can be appreciated by the perspective borrower.
Now that we've gone through this exercise, we are eager to learn more. Moving forward, we plan to implement a continuous feedback loop into our processes--ensuring that we are always learning from those we serve so that we can serve them better.