Thursday, December 4, 2008

The market research loop

Too often, market research is not conducted at all (how many times have we heard, “we don’t need to do market research – our loan officers know our clients intimately!”). If it is conducted, market research is frequently not fully utilized.

At one MFI I worked with, drop-out data was collected for every client and then sat in a computer file – no one saw it except for the data entry staff.

What a waste of time and information!

In a market-driven MFI, market demand drives products and strategy. For this to happen, managers must know and understand client demand, and they need research data to do this. But unless all levels of the company use the research data and can drive what questions are being researched, market research is wasted. Too often, research data languishes in a file, unreported and un-used.

The solution to this is to ensure that market research flows in a loop through your institution. Research findings must flow up to management and down to loan officers, and loan officers and managers must provide feedback to the researchers. Do they agree or disagree with the findings? Would they like research to explore other issues or to explore certain findings more deeply?

Action item: Make a “wish list” of information you’d like to know about your clients and how you can use it. Look in your credit files to see if any information on your list is already being collected by your loan officers. How can you access that data on a regular basis?

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