CGAP is working with urban microfinance institution, Janalakshmi, and global development advisory, Dalberg to enhance the experience poor customers have while using financial services. We have five insights from this project on improving customer experience for the poor, in a way that is game-changing, yet profitable.
Decide which socio-cultural factors you will mitigate for
Despite a strongly articulated social mission to serve poor customers, and a committed workforce, large socio-cultural inequities were sometimes reflected in Janalakshmi’s customer experience. Customers feared asking questions to staff. Some admitted to being disrespected but didn’t feel empowered to express dissatisfaction. A customer visiting an overcrowded branch was told by the security staff at the door that she could only enter the branch when her whole loan group was with her. Some customers who did not understand the enrollment training, made mistakes in loan repayments, and felt discouraged when reproached. These gaps in customer experience stem from factors such as class-distance, lack of literacy and sometimes even gender inequities, and they impose a psychological cost on customers. They can turn customers away from the service altogether. FSPs serving poor customers cannot solve all these issues deeply embedded in their communities, but should pick few factors to mitigate and enforce service standards for every employee and every branch. During prototyping, Janalakshmi trained hosts in two branches to welcome each customer, provide them with a token for waiting and direct them to a seating area. Even when branches were overcrowded, staff was asked to speak courteously to customers. They have also created enrollment videos that use visuals and entertaining narrative to ease information transfer. Their HR staff has set annual targets for recruiting female frontline and corporate staff. All simple tweaks, but ones that could make a big difference in customers’ experience with Janalakshmi.
Determine the non-negotiables of customer experience
Now make sure you provide them everywhere: Conversations with Janalakshmi customers revealed that sometimes basic amenities were missing at branches. Drinking water was not available and bathrooms were designated staff only and not for customers. On other occasions, customers said they waited over 6 hours for a manager to address them. FSPs serving poor customers must have a list of non-negotiable factors that reinforce the basic minimum customer experience in every branch/agent location and create a distinct brand identity in customers’ mind. Janalakshmi prototyped “Jana Basics” where water, clean bathrooms, large waiting areas, and kids play zones were provided at two branches that were typically in the poorest-of-poor areas and lacked these facilities. The positive impact this prototype had with customers, showed them they need to invest in scaling these non-negotiables to all their branches nationally.
Find one pioneering idea for this segment
Now put your weight behind getting it right: Most customer experience improvements are incremental, but FSPs should also focus on big ideas for this segment to unlock larger business opportunities. Janalakshmi tested one such idea for reducing customer waiting time for loan disbursement. To get their loans, the entire loan group must be present at the branch at the same time. Typically there are delays and incomplete groups wait for hours at overcrowded branches. Customers complain that they lose a day of work and wages. The working group tested a new approach where all the paperwork is done at a community center near where the loan group lives early in the morning (generally a loan group lives in the same community). Customers still need to turn up individually at the branch through the day to get their money on their ATM cards, but waiting time in the branch is reduced. With fewer customers waiting at the branch, staff can now also process more loans in a day. Good for customers, good for business. Compliance and risk teams were hesitant as this prototype challenges industry norms around enforcing group liability and they feared it would affect repayments and the increase in business was not evident in 6 weeks of prototyping. As a result, this prototype has moved to a piloting phase for more evidence, but Janalakshmi management remain committed to back it if the business case is proved.
Beyond insights on customers, two insights relate to strategic adjustments it takes for an organization to provide a better customer experience.
Empowering employees is crucial to success
Employees working closely with customers are an important source of innovation on customer experience. Jana staff took great initiative during prototyping but struggled to balance responsibilities with their regular job. Now Janalakshmi is creating customer-centric KPIs for its staff, to ensure that customer-focused innovation is part of their usual responsibilities. Given the prevalence of socio-cultural inequities in customer interactions, FSP must also recruit staff that bring empathy and respect to customers and align with the organizational mission. Today, there are few truly customer-centric FSPs serving the bottom of the pyramid. So at managerial levels, it is important FSPs recruit individuals with skills or experience from other industries in bringing that customer-focus into the organizations.
Making space for a culture of continuous innovation is hard but necessary
Customer-centricity depends on continuous testing and feedback-gathering with customers, but FSPs hesitate to invest time and resources without a clear business case at the outset. But to realize the business benefits of a customer-focus, FSPs must be ready to take the first step and build momentum in the organization. They should determine a scale and tenor of customer-focused innovation they are comfortable with, then bolster their commitment by allotting budgets, designating customer champions and creating enterprise-wide visibility for this innovation. Simultaneously, to safeguard business, FSPs should ensure all innovations have the desired impact before scaling. Janalakshmi set aside a modest budget that the working group used for prototypes. A senior staff member was assigned to be the customer-experience champion and ensured prototyping managers had the right permissions and buy-ins to complete their projects. Not all prototypes are being scaled immediately. Where more evidence is needed, it is being sought. But beyond this project, Janalakshmi has also set up a customer-centricity council called Suno Unki Kahani (listen to their stories), with members from every business function that meets periodically to highlight customer-centric initiatives and bring the customer into the boardroom. A Jana branch in Bangalore city’s Neelasandra neighborhood has been transformed into a lab for testing all new customer-centric initiatives. If it works there, it becomes the first endorsement for scaling up customer experience improvements.