Wednesday, December 10, 2008

Market research and client satisfaction

Market research tools should be appropriate to the size of the MFI. Though a notable few MFIs have made the leap to “major corporation” status, most MFIs are closer to medium-sized than large-scale enterprises, and this blog will focus on market research methods for the small to mid-sized MFI.

Though larger MFIs have the advantage of more funding for sizable market studies, this doesn’t mean that market research by more modestly sized MFIs must be sub-standard. Small to medium-sized MFIs can effectively collect market data using tools such as focus groups, surveys, and observation. They can also conduct high quality exploratory, exit and satisfaction research.

Today, I’d like to focus on the latter – researching customer satisfaction. Questionnaires, surveys, interviews or focus groups can all be used when researching customer satisfaction. Whichever method you use, there are some general rules to keep in mind.

1) Segment your market (and your market research). Different groups of customers (i.e. market segments) will make their buying decision for different reasons. If you mash all your client groups together in one survey, without differentiating between who says what, the data you receive will be confused.

2) Decide in advance what specific aspects of satisfaction with products you’ll be researching. Generally, clients look at price (no one will ever admit to liking your interest rate), speed of delivery, point of access, loan size, customer service, range of products/services, product flexibility, and collateral requirements. There may be some other aspects of your services you’d like to focus on as well, or some points listed above which don’t apply.

3) Satisfaction vs. loyalty. According to a survey, 60-80% of clients reported being “very satisfied” before switching to a new supplier! (Reichart, 1996). The goal of having satisfied clients is having repeat clients. Verify your satisfaction data against your drop-out data. Are your clients staying with your program for years or for months? Are they using your MFIs other financial services? Are your clients referring your services to their friends? These are all indicators of loyalty.

4) Pre-test your research instrument. Expect that your first “draft” of a questionnaire or focus group script will be flawed and be ready to fix it before you go too far.

5) Do it regularly. Whether you randomly survey clients at the end of each loan cycle or conduct annual focus groups, data should be collected regularly.

6) Report it! There should be a system for analyzing the data and delivering it to management and loan officers. Loan officers are on the front-lines of providing customer satisfaction, and managers need the data for more strategic decision making (e.g. product redesigns).

1 comment:

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