Wednesday, December 3, 2008

Case Study: Intgrated marketing reduces drop-outs

Fonkoze, a Haitian MFI, has a Social Performance Monitoring (SPM) unit which behaves like an integrated marketing department.

How, you ask?

They collect market data on a regular basis, manage the information they gather and disburse it throughout the MFI, and management actually uses the data for strategic decision making.

What makes this department “integrated” is the level of coordination between managers and the SPM unit. Social monitors continually feed the information they collect to their supervisors, and the department director manages the data to make sure it gets to the board and upper management. The unit also works with top management and branch managers to find out what questions they most want answered, for example in the bi-annual focus groups conducted by Fonkoze’s “social impact monitors.”

Like most MFI’s Fonkoze realized that they don’t earn a profit on a client until the borrower has been with the program for 10-11 months – in Fonkoze’s case, the third loan cycle. By regularly monitoring drop-outs, the MFI determined that the highest proportion of clients who drop out, drop out after the first or second cycles. Fortunately, Fonkoze’s social impact monitors conduct regular client exit interviews, and reported results to managers.

Thanks to their integrated marketing/SPM program, Fonkoze was able to develop strategies to provide incentives for clients to stay with the MFI. For example, Fonkoze adopted a life and credit micro-insurance program for all our clients to decrease the dropout rate and increase profitability, and has introduced other initiatives to keep clients with the program.

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