What does an institution need to do to gain a bigger share of the client’s wallet, and dominate the market? This blog introduces the framework MicroSave uses to answer these questions.
Let us start with a quick reality check. Most financial service institutions aspire to gain a bigger share of the client’s wallet not only in terms of profit but also the value and number of transactions with them. This is true irrespective of whether you are a single, double or triple bottom line institution. Those in the digital financial services space are of course no different. That brings us to some core and high-level strategic questions for those involved in developing a strategy for their financial services institutions: 1) What do you (as an institution) need to do to gain a bigger share of client’s wallet? 2) How do you dominate the market on a sustainable basis? All institutions try to answer these fundamental questions in one or other form (albeit a bit more specific and contextual) as they think about their strategy.
This two-part blog introduces the framework/approach which MicroSave has used with some institutions to help them answer these questions through a quick exercise. Let us call it, ‘Follow the Money Approach’ (FMA). It has proved to be very effective irrespective of what stage of life cycle these institutions are at; whether they are developing their go to market strategy, whether they are just revisiting their strategy or they are trying to expand. Following are some of its key benefits:
In simple terms, this helps you put your mouth where there is money.
There are four key steps towards a successful implementation of the FMA approach:
The following is a detailed ‘how to’ explanation for each step. We will cover the first two steps in the first part of the blog and the remaining two steps in the second part.
Step one: Identify your users and user categories
The objective is to understand different use cases of your offering more than doing a rigid categorization of a fluid client base into narrow segments. And, the ultimate objective is to find high potential intervention points for you to covert a cash footprint into digital footprint or to convert an existing inefficient digital footprint (such as interbank cheque transfers or expensive money transfer system) into a more efficient (for yourself, your agents as well as for the end users) digital footprint.
First activity within this step is to brainstorm and identify your key user types or client segments. Following is a sample categorization of use cases:
There are a few useful guiding points to help you come up with a dynamic categorization:
Step two: Follow the money and map its footprint
The main objective here is to draw a unique Financial Footprint Map for each user segment.
Once the user types are identified, the next activity is to hit the ground, identify a few random households for each category (ideally 5-7 households per category) and engage in detailed qualitative conversations with the user segments.
Under this step, all you have to do is follow the money, map its footprints and organize these footprints in a logical structure. In any active financial ecosystem, you will inadvertently observe that money (whether cash or digital) has the following logical (as well as practical) trial as it leaves it footprints:
The Financial Footprint Map, as an outcome of this exercise, should ultimately look like this:
A couple of useful points to remember during this step:
Once you have a financial footprint map ready, it is time to move to step three…
Leave comments