Tilman Ehrbeck on Impact Investing, Understanding Customers' Needs
CGAP CEO Tilman Ehrbeck recently published an article on HuffingtonPost.com addressing how impact investoing can be more effective by gaining better insights into client demand.
Don't assume you know what customers want. You need to genuinely ask them. Better yet, you need to engage in a real dialogue, observe daily behaviors, and design an open-minded, joint discovery process. People might not be able to articulate in the abstract and at the outset what they really want. As Henry Ford famously quipped: Had I asked a focus group what they wanted, they would have said "faster horses."
The article draws on work from CGAP's Technology and Business Model Innovation Team, which has partnered with large banks and design firms over the past 18 months to create better financial services products for the poor in three countries - Mexico, Brazil and Uganda.
My colleagues at CGAP over the last 18 months have worked in three countries with large banks and design firms to generate demand-side insights and create innovative financial services that better meet the needs of low-income customers at the base of the economic pyramid. These are people typically excluded from the formal financial system and therefore reliant on age-old informal sector mechanisms such as rotating savings clubs (ROSCAs) or money lenders, which can be unreliable and very expensive. This design work has come up with some really good new ideas. But equally importantly, it has comprehensively documented the process and the tools available to go about generating true client insights. The key is to meet your target customers on their turf, speak their language, and understand their lives and daily actions -- in our case, how they pertain to financial behavior.