To expand the number of employers participating with Escala’s education savings products
Escala reevaluated customer insights to understand stumbling blocks
Escala pivoted to treat employers as customers, in addition to the end-user, employees saving for education
Imagine you’re Escala Educación: Your value proposition gets highly positive feedback from the majority of potential partner companies, but you have only one single commitment from a partner. Your user base must expand, so what do you do?
Escala Educación was founded, in Medellín, 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 Educación catered to lower-skilled labor segments, marketing their savings programs to companies as socially-responsible ventures and for employee benefits.
Initially, Escala Educación view employees as their users and customers, meaning that their product and pitch were tailored to the primarily to benefit employees, as a B2C service. Understanding that personal savings would not be enough, Escala Educación incorporated tuition discounts based on customer research, and structured employer-matching programs to reduce attrition. The first partner company, an Escala Educación investor, offered to work with them in promoting corporate social responsibility.
Despite encouraging, positive feedback from eight out of 10 companies to whom they pitched, getting commitments from any of them proved pretty much impossible. Assuming that a downturn in the Colombian economy contributed to the reticence from companies, Escala Educación had to reevaluate the employer as a B2B 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 employers are clients, Escala Educación pivoted to understand the pain points and needs of B2B clients.
As Escala Educación spoke with potential partner companies, Escala Educación pitched “Helping your employees, focusing on CSR, and getting better retention rates.” When positive feedback failed to lead to new commitments from companies, Escala Educación 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 Educación 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 the B2B 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 their priorities and addressing employee retention as a key issue, Escala Educación targeted industries with high attrition rates. Based on industry research and interviews, Escala Educación identified the Colombian flower industry as a prime target. With annual turnover rates reaching 100%, flower growers had difficulty attracting new people to hard manual labor. When interviewing companies in the industry, the Escala Educación product aligned with the needs of employers as a potential solution already under consideration.
In order to attract younger hires, Escala Educación created Progresa, a savings program targeted to individuals saving for their own education. Futuro, the original product, caters to parents saving for their 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 Educación, the company grew the number of partners from seven to 20 during 2017. Employee engagement with Escala Educación’s savings and educational programs clocked in at 95%, a significant decrease in attrition rates for partner companies to hope for. By continuously iterating and interacting with both sets of B2C and B2B customers, Escala Educación will continue to improve their offerings and look to scale.