To expand the number of employers participating with Escala’s education savings products
Escala reevaluates customer insights to understand stumbling blocks
Escala pivots to treat employers as customers, in addition to the end-user, employees saving for education
Your value proposition gets highly positive feedback from the majority of potential partner companies, but only a single commitment to partner. The user base must expand, so how do you react?
Escala was founded, in Medellin, Colombia, with the intention of providing “education for all” via a savings product matched by employers to fund higher education and coupled with tuition discounts. Escala catered to lower-skilled labor segments, marketing their savings programs to companies as a socially responsible venture and employee benefit.
Initially, Escala had understood the employees as their users and customers, meaning that their product and pitch were tailored to the primary benefit of the employee. Understanding that personal savings would not be enough, Escala incorporated tuition discounts based on customer research, and structured employer matching programs to incentivize reduced attrition. The first partner company, an Escala investor, offered to work together promoting corporate social responsibility.
Despite encouraging, positive feedback from eight out of ten companies pitched, getting commitments from any proved nigh impossible. First, an assumption was made that a downturn in the Colombian economy contributed to the reticence from companies. With that in mind, Escala had to reevaluate their customer insight to understand the employer as a customer, rather than as a partner in providing access to education for employees. “We had to go beyond the end user, who is still a customer that uses a lot of our services, who is part of our mission of financial inclusion, but we had to find a contact in the company that was willing to pay for this service. Meaning we had to identify a problem of theirs that we could solve.” By understanding that the company is a client, Escala pivoted to understand the pain points and needs of the companies.
As Escala spoke with potential partner companies, Escala pitched “Helping your employees, focusing on CSR, and getting better retention rates” in that order. When positive feedback failed to lead to new commitments from companies pitched, Escala stepped back and reevaluated their marketing approach. Understanding the danger of waiting for the eight companies who indicated interest, they moved to diversify their potential partner base. This shift in approach led to further evaluation of how best to pitch new partners. By conducting informational interviews with clients, employees, investors, and industry players, Escala reached a point of understanding that the company was not a channel to customers, but a customer itself.
This realization forced an assessment of how to meet the needs of and ameliorate the pain points of this new customer base. CEO Jonathan Duarte states that “It’s no longer [enough] that they think what we’re doing is great, but that they actually want what we’re providing. Therefore, not all companies are created equal. We have to target the companies that actually need help.” By swapping the priorities and addressing employee retention as a key issue, Escala targeted industries with high attrition rates. Based on industry research and interviews, Escala identified the Colombian flower industry as a prime target. With annual turnover rates reaching 100%, flower growers had difficulty attracting new people to job of hard manual labor. When interviewing companies in the industry, the Escala product aligned with the needs of employers as a potential solution already under consideration.
In order to attract younger hires, Escala created Progresa, a savings program targeted to those saving for their own education. Futuro, the original product, caters to parents saving for children’s education. Different solutions work for different parts of a business. Duarte emphasizes “We have found that Progresa is the first program we pitch; especially to HR because they are the ones are suffering from the attrition rate and want solutions now. Usually we end up presenting to the GM or board since we’re asking for funds. Once we get to that strategic level, they start asking about children of employees. We then respond with the Futuro solution.”
“It’s no longer [enough] that they think what we’re doing is great, but that they actually want what we’re providing. ”
Jonathan Duarte, CEO
By catering to employer pain points and new lessons learned from employees saving with Escala, partner companies increased from seven to twenty during 2017. Measuring employee engagement with Escala’s savings and educational programs at 95%, they expect a significant decrease in attrition rates for partner companies. By continuously iterating and interacting with both sets of customers, employee and employer, Escala will continue to improve their offerings and now scale.