Case Study · Destacame


Experimentation to improve credit approval rates, debt collections, and credit scores

SCROLL DOWN

Case Study · Destacame


Experimentation to improve credit approval rates, debt collections, and credit scores

 
destacame.jpg
 

1

Challenge

Rejection rates for credit applications via Destacame’s platform were close to 100%

2

Action

Destacame provided increased transparency for the user and a new consumer-requested module to repay outstanding debts

3

Result

Destacame created a new revenue channel, increased user engagement and application acceptance rates

 

1

Challenge

How do you react when the basic value proposition of your startup is not delivering?

Destacame was originally conceived as a free online financial management platform that allows people to take control of their financial data, to improve financial capabilities, and improve access to better financial products. Destacame targeted middle-income, working adults, and operated functionally as an alternative credit scoring company using non-financial data to serve that mission.

Destacame built alternative credit scores for users based on non-financial data, but when users would apply for credit products, primarily with larger banks, the rejection rates were sky high. The purpose of financial empowerment was rebutted by the rejection of Destacame users when applying for credit. 

 

2

Action

Destacame had built relationships with financial institutions who used the platform to offer financial products to individuals. Leveraging those relationships, Destacame received feedback from a credit bureau executive that pushed them in a new direction. Destacame needed to show the users their other, traditional credit scores to further educate the users about the state of their financial health.


In June of 2016, Destacame added the option for users to view their traditional credit score with apprehension. The Destacame value proposition was to use data outside of the traditional score and feared users would their frustration with poor conventional credit scores at Destacame, the messenger. The fears were unfounded as the user experience explained in simple terms what the issues were for reducing credit scores. Armed with this new knowledge, users began to ask for further information and aid on improving their credit score. A large detriment to a credit score is overdue debt and Destacame logged growing demand via customer support for a way to settle their old debts in order to access better credit products.

destacame users.JPG
 

This led Destacame to launch their collections module in August 2017. By signing contracts with financial institutions to additionally act as a collection agency, Destacame added the simple collections module to the existing platform. This added a new revenue stream to the Destacame business model. When users view products with outstanding debt within the platform, they have an option to resolve and settle the debt via a three-click process.

  1. Users view their products with outstanding debt

  2. Users view an offer of discounted settlement from the debt-holding financial institution

  3. Users gives consent for Destacame to share their current contact information with the financial institution and to be contacted to resolve the debt at the rate within the offer

Contracts with financial institutions are required to display the offers. Therefore, the more contracts with large firms in the credit industry, the better Destacame serves its user base.

destacame debts settled.JPG

Three months after the module launch, Destacame signed contracts with three new financial institutions, allowing users to repay outstanding debts in order to increase their credit score.

 

3

Result

The three groupings each required a tailored solution, which were explored and tested via lean experimentation:

  • 10x increase in approval rates for credit applications via the Destacame platform, from 1% to 10%

  • New revenue stream for Destacame

  • Written-off debt recovered for partner financial institutions

  • Improved credit scores for Destacame users

 

Destacame views this collection module as a simple fulfillment of their mission statement to their users and a great addition to their value proposition for financial institutions. By working towards greater transparency and financial literacy, Destacame achieved a benefit for all parties involved; users have access to better financial products and knowledge, while financial institutions are gaining access to more clients and recovering written-off debt.

Case Study · Escala


Recognizing value proposition for end-users and corporate clients

Case Study · Escala


Recognizing value proposition for end-users and corporate clients

 
logo-escalatm.png
 

1

Challenge

To expand the number of employers participating with Escala’s education savings products

2

Action

Escala reevaluated customer insights to understand stumbling blocks

3

Result

Escala pivoted to treat employers as customers, in addition to the end-user, employees saving for education

 

1

Challenge

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.

 

2

Action

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

 

3

Result

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.

escala growth.JPG

Case Study · Nomanini


Using unit economics to offer a more economically viable device to the client

Case Study · Nomanini


Using unit economics to offer a more economically viable device to the client

 
Nomanini logo text only 300 x 40.png
 

1

Challenge

Nomanini struggled to sell their well-crafted payments device to mobile airtime distributors

2

Action

A stakeholder analysis led to a reworking of the Nomanini device

3

Result

Unit economics and balance of user and buyer played an enhanced role in Nomanini’s approach

 

1

Challenge

Imagine you’re Nomanini: How do you react when you’ve designed the ideal product for your end-user, but your end-user isn’t the buyer?

Nomanini is an enterprise payments platform provider for the informal retail sector.

Having identified a need in the Cape Town public transportation market for easier distribution of airtime credits, Nomanini developed a device to manage airtime credit distribution for the “conductors” on Cape Town mini-buses (taxis). The design and components of this device were completely proprietary. Designed from the bottom up, with an understanding of the pain points that “conductors” experienced while selling airtime on taxis — South African mini-buses that supplement public transportation. Nomanini successfully sold their device to one major airtime credit distributor, and received positive feedback from its users. Conductors, who before had to manage paper slips of airtime credit, as well as collect taxi fare, appreciated the ease that the device brought.

The issue was that, despite this positive feedback, Nomanini was struggling to sell to a second client. The issue came to a head when Nomanini’s first client collapsed into bankruptcy.

 

2

Action

Based on industrial design and market research, their device was sleek and excelled in its singular function. However, the conductors were not the ones buying this device. Rather, the device was issued to them by the distributor, which led to a disconnect between the buyer of the device and the perceived value of the device in action. Nomanini needed to understand and resolve the challenge at hand.

Nomanini first moved to understand the issue. According to Werner Pyke, Head of Product, Nomanini’s awareness of the issue had been growing over time. With the collapse of the first client, they had to take rapid measures to secure revenue streams.

During pilots with potential clients, Nomanini understood that the unit economics did not work for the purchasing client needs. People “can often have an optimistic view of their business case and then if you implement in a pilot and start looking at the actual data, you see that it won’t pay for itself. By the later pilots, seeing that the economics weren’t working, it all becomes clear...  there is a temptation to say ‘This is only a pilot, when it scales, the price will come down or there will be higher volumes.’”

Keeping in mind the challenge of high upfront capital expenditure by the buyer, Nomanini reworked the device to improve its unit economics.

“A lot of that [reaction] had to do with being emotionally attached to the design that we had, really believing in it, and it being a great product. It takes a while to let that emotion work itself out, but then it’s important to not let those personal emotions confuse you.”

Using the industrial product design approach of Design to Value (DTV), Nomanini broke down the device into its component parts and assigned value to each part.

Nomanini shifted from a completely proprietary design to the use of commoditized parts within the device to reduce cost, thereby improving unit economics. While they had to sacrifice a part of their original value proposition, they were able to maintain the device’s functional integrity using the DTV approach and a feedback loop with clients.

 

3

Result

Nomanini feared a change in user acceptance during the shift from their original offering to the updated, more economic offering. However, both buyers and users were happy with the altered product. Nomanini gauged no shift in user acceptance when comparing the two devices.

Beyond the device changes, Nomanini now places huge emphasis on their economic modeling. Their client interaction process is streamlined based on robust models for unit economics, which dispels rose-colored views during the pilot if the unit economics aren’t working well and allows for easier changes to the device functionality based on the client’s evolving needs.

“We’re now even at a point where if a client would like to add a new transaction [function to the device] and they ask for a quote to roll out the transaction, we calculate whether that transaction will be profitable for the client based on all of the costs... We have folders full of ready-to-go spreadsheets to calculate for new functions.”

Starting with a device designed to improve the work of taxi conductors, Nomanini shifted towards a greater sensitivity of the buyer’s needs, as well as that of the original users. This meant moving to more economically viable product for the buyer and an orientation around modeling to communicate clearly and openly with the client.

Case Study · WorldCover


Increasing trust and engagement with smallholder farmers using the right communication strategies

Case Study · WorldCover


Increasing trust and engagement with smallholder farmers using the right communication strategies

 
WorldCover+Logo.png
 

1

Challenge

WorldCover struggled to communicate with rural, farming customers

2

Action

WorldCover conducted problem interviews and increased the frequency and type of communication

3

Result

WorldCover saw increased levels of customer trust and engagement

 

1

Challenge

Imagine you’re WorldCover: How do you communicate clearly and consistently with a rural customer base when only 50 percent own phones and 80 percent are illiterate?

WorldCover, a crop insurance provider that launched in northern Ghana in 2015, services smallholder farmers with policies by insuring crops by the bag. WorldCover entered a developing market that depends heavily on personal relationships and trust, targeting an agricentric customer base with low rates of formal education. Insurance payouts are based on satellite weather data, which is not obvious to the farmer-policyholder.

At the end of the first season, WorldCover was concerned with maintaining a relationship of trust with farmers. By the season’s end, one of seven communities with customers received the insurance payout, although a second community claimed that they should have received the insurance due to drought. The farmers’ claims conflicted with the satellite weather data, which showed requisite rainfall for the season. Founder Chris Sheehan explains,

“This caused problems where they felt they had a drought but did not get a payout. One of the main learnings there was that it’s ok if the weather data is imperfect, which is true of many insurance products, but the way we communicate the weather data to the customer in real time, which is what we do today, at least on a week to week basis, allows us to resolve any potential disputes or problems with the data. Either customer misunderstandings or data issues on our side. Trust with the customer goes up a huge amount based on providing that data to the customer.”

Here is the challenge: If the farmers only communicate with WorldCover during the sale, the payment, and the payout, how does WorldCover ensure that they are on the same page as the farmer? Customer insights is a dynamic process, so the lack of engagement can lead to dissatisfied customers who many only be identifyed at the end of the policy term. How should WorldCover approach customer satisfaction and retention?

 

2

Action

WorldCover approached the communications challenge from two directions. First, better understand the customer base. Second, communicate to the customer base with greater frequency. Both approaches increased trust in the product and WorldCover brand, leading to higher retention rates.

During the initial customer insights phase of the product market fit journey, WorldCover conducted more than twenty interviews with farmers in northern Ghana in order to gauge the challenges that farmers faced in their daily and seasonal work. Along with standardized demographic data gathering, the problem-interview questions were deliberately open-ended to allow for freedom of response. The answers all oriented around the instability of the rains, whether the issue was drought directly, access to finance, paying for school fees, or the ability to buy fertilizer.

Having confirmed the primary pain point and with a simple product offering to serve the farmers’ need, WorldCover used a marketing MVP composed of simple and clear images to cater to the illiterate majority of potential customers. As an example within the customer journey to explain the concept of the satellite gathering weather data, the WorldCover team conveyed that it used the same technology that powered mobile phone coverage. In spite of the intangibility of satellite data, WorldCover spoke in terms understood by their target base.

This understanding of the customer base demographics and insights allowed for the following findings:

  • Only 50 percent of customers have a mobile phone

  • Only 20 percent of customers are literate

  • Frequent communication is important for maintaining trust

Using these findings, WorldCover oriented its marketing proposition around customer capacity and leveraged automated processes where possible. Customer capacity based on the above led to three groups:

  • Group A: Those who have a phone and are literate in English or French

  • Group B: Those who have a phone and are illiterate

  • Group C: Those without a phone

Communications lean experiment 1

With mobile penetration at 50 percent and the literacy rate at 20 percent, there was a gap in the customer base for those who could receive an SMS, but could not read it. The Twilio messaging system began as a rapid experiment where WorldCover tried to send audio recordings to people.

It began with Ruth, the product manager in Ghana calling customers, pretending to be a voice recording. In the pertinent local language, she would repeat “Hello, this is WorldCover, this is our product and goal”. Her feedback was that people were trying to engage with her as a recording. She called back immediately afterwards to conduct the survey gauging the response. People were very excited to be speaking with the woman who made the recording. WorldCover conducted rapid tests to find the MV part of the MVP, by stripping things away to get the information quickly and simply. From that point, Twilio messaging had a limited rollout, progressing from the MVP test to 10 percent of the customers. The limited rollout was followed by a structured survey with ~500 data points to confirm impact. Once confirmed, WorldCover fully rolled out the service.

“In an ideal world, we leave a control group for a specified amount of time to measure effects over the term. None of the projects really get implemented that cleanly, but we aim for that.”
Chris Sheehan, CEO

 

Communications lean experiment 2

Due to low mobile phone penetration in the agricultural communities and the expense of the high-frequency Twilio service, WorldCover explored other options involving group contact to defray costs, with the added benefit of measuring user engagement via attendance rates at the weekly community meetings.

Option 1: Microphone men - as the name implies, a person who goes through the community repeating a message, which they are paid to announce.

  • Benefit - Widespread practice and ability to disseminate message

  • Challenge - Difficult to guarantee that all, if any, customers hear the message

Option 2: Community meetings - a gathering of the WorldCover customers within the community

  • Benefit - Guarantees interaction with WorldCover representative and other customers, cost-effective for WorldCover

  • Challenge - More effort to scale than a technical solution

 

3

Result

The three groupings each required a tailored solution, which were explored and tested via lean experimentation:

  • Group A: SMS in either English or French via a global messaging app (Twilio). Local languages do not use SMS to manage complexity for WorldCover communications

  • Group B: A voice message recorded in the local language via a global messaging app (Twilio)

  • Group C: Weekly group meetings led by a community representative, who either plays a message recorded in the local language or repeats that message to the group.

Using the community meetings as a measure of engagement, WorldCover observed 95 percent attendance rates and an Net Promoter Score of 9.7. Ninety percent of customers claimed “extreme disappointment” if the WorldCover crop insurance product were to no longer be offered. Farmers were more trusting the more frequent their WorldCover interactions, because "an impostor wouldn’t show up at your house every week after taking our premium money."

By prioritizing communication, WorldCover greatly enhanced the efficacy of their customer communications. Understanding customer demographics and pain points, as well as limitations on communications channels and cultural preference for in-person interaction, the team were able to create highly effective group sessions.