Thursday, January 8, 2009

Word of mouth: Is it all MFIs need?


“We don’t need to do marketing – we use word of mouth.”

I hear this all the time from MFI managers. Word of mouth (or referrals) is a great way to get clients. However, too often managers simply assume word of mouth is happening, and that it’s positive. “Word of mouth” then becomes an excuse not to do anything.

But did you know that you can actually generate positive word of mouth? Here’s how:

Step 1: Make sure you’ve got a great product and are delivering good service! Unfortunately, bad experiences tend to get more “word of mouth” than good service, so you need to make sure that your products and customer service is as good as you think it is.

Step 2: Identify and cultivate influential people in your markets. Who do your clients listen to? Who do they get their information from? These could be village leaders, well-respected businesswomen, or even local celebrities. Spend time telling them about the benefits of your product, and give them your brochures, business cards, or other materials to help them get the word out.

Step 3: When a new client comes to you, ask how they heard about you and record their answer. Again, this is where an integrated marketing program can be of help. This sort of information is most useful when it’s spread around – enabling the branch manager and loan officers to understand exactly where the referrals are coming from, and enabling upper management and marketing to understand just how effective the word of mouth campaign really is.

Step 4: The group solidarity lending methodology lends itself to referrals – it’s up to the clients to find others to join the group. However, once a group is active the referrals may stop unless loan officers get in the habit of asking existing clients to keep spreading the word. A good time to do this is when they receive a compliment about your MFI’s product or service. Loan officers should be trained to follow up with a “Thank you! Who can you tell about our…?” to prompt good word of mouth marketing.

Action item:

Ask your branch managers to identify opinion leaders in their communities. Work with the branch managers to develop a plan to reach out to these opinion leaders.

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