[Marketing social enterprises] : MicroGraam - If people don’t know you exist you will sink anyway…
MicroGraam is an online peer-to-peer lending platform connecting deserving students, entrepreneurs, and farmers in rural India with the resources and funds to overcome the financial challenges they face. MicroGraam’s platform allows these borrowers to get flexible loans from urban professionals, at affordable interest terms as compared to conventional micro-finance models. Lenders can easily choose a borrower, the interest rate, and make an investment which gets paid back to the lenders in 12-18 months. Borrowers pay back the loan to the investor who can then choose to lend again or keep their investment. For certain types of businesses, entrepreneurs can obtain funds in the form of profit-sharing investments rather than loans as well. MicroGraam works with NGOs in rural areas to identify deserving & credit-worthy borrowers.
For our marketing for social enterprises series, we caught up with Meera Sawkar who heads the marketing efforts for MicroGraam to understand their marketing choices, strategies & challenges and the reasons behind them. Meera didn’t have a marketing background and she learnt by experimenting on the go. She has been with MicroGraam for almost 3 years now.
Marketing is necessary – communicate well why you exist and what you do
It is really hard for social enterprises to divert spending toward marketing and branding. “First you want to create social impact and that may not yield huge profits, then you want to be profitable if you are a for profit social enterprise. There are so many costs that come before the marketing or branding spends. But if people don’t know that you exist and what all you are doing then you will sink anyway,” opines Meera.
Like almost all social enterprises, Micrograam wants to have low operational costs as possible because the costs incurred essentially gets paid from the investment/loan made to the borrowers. All of the cost that MicroGraam spends is something that borrowers end up having to pay. Keeping this in mind, online marketing is extensively used by MicroGraam, as its one of the most cost effective marketing tools for mass outreach.
A lot of their efforts go into making potential investors and people who are interested in this micro-finance sector aware of very basic things like how they are different than others and why is it better to give someone a loan rather than donating and not expecting the money back. Initially they thought that the investment model of MicroGraam would be much more convincing for people to invest as they will know where their money is going and they will adopt this model really quick but it didn’t turn out as expected.
Meera shares, “Our most important mission is to make loans to borrowers, to help them improve their livelihoods and it is not going to happen unless people know about us and what we are doing. People have very generous giving qualities but the kind of institutionalization part that we are trying to bring in is very weak. It is not a very straight forward model, it is a little bit complicated. It is not like saying give us charity and then forget about it. It is about communicating well to people that lend us some money, and then we will lend it to a borrower, we will make sure that they use it properly and that it helps them generate income and we will repay you with interest. If someone hears about us from a trusted source, somebody who has invested through MicroGraam earlier, it works the best. We are using social media platforms to show people how we are different from charities or even traditional microfinance institutions. Word of mouth, social media marketing, newsletters, email marketing, incentives to invest etc are all we utilize.”
Identifying the right set of customers
Marketing efforts depend on your go-to clients, and strategies vary according to the targeted customers. The first step is identifying all the customers to be targeted. MicroGraam has 2 sets of customers – the borrowers who pay back the loans and the interest and the investors who make the initial loan and they need to cater to both of them.
The marketing for borrowers come through NGOs where they go to the villages, meet the people and communicate to them why a loan may or may not be a good thing for them. Marketing becomes a little harder when it comes to investors. They need to find investors and have to explain to them why MicroGraam’s model is a good use of their investment. After identifying the right set, messaging for different set of customers needs to be devised carefully to yield results of marketing to them.
Choosing the right words
Marketing for social enterprises is interesting and challenging because there is always a new product, a new service and one has to decide carefully what the focus of communication has to be. Meera opines that they need to decide if focus will be on financial trend or the social impact. Messaging decides the impact and one has to choose the words carefully as some messages will be more impactful for the cause than others.
She says, “Social impact is one aspect of what we do but we actually try to talk more about it as an investment product like a new asset class. It really depends on who you are targeting. If it’s a new investor or executive you would explain that it’s a safe investment option rather than any other debt security that they might be interested in investing in. To an existing investor, we would say this is your borrower to whom you lent 6 months ago, this is what she is doing now and this is the impact you have made.”
MicroGraam has run a campaign ‘Make a Mother Happy’ on Mother’s Day instigating emotions to lend some money to a mother far away in some rural part of India along with buying a gift for your own mother and it did exceptionally well. A part of the credit goes to the messaging for it.
Trial and error is the only way
“Nobody in this space has developed a model that works 100% of the times. Nobody has been very successful in marketing the peer-to-peer model as a for profit company. We don’t have an ideal to emulate. It’s not like traditional marketing that we can see a Coca Cola or Standard Chartered marketing some new product and say ‘hey, it worked for them, it may work for us.’ You need to try a lot of unconventional marketing strategies. It’s a lot of trial and error and also trying to develop your own strategies that have not been done before. We hope that it’s possible, that we can devise a successful marketing strategy for peer to peer low cost investing model but we do not really know that yet.”
Giving back to the investors
People generally assume that there is a product an enterprise is selling or a direct service that it is offering. MicroGraam investors are not lending directly to the borrowers, so the only thing they get is the social ROI and the principal at the end of some months. MicroGraam needs to make sure that the investors know and remember the impact they are creating on someone’s life. “People think that you are building a product that they can see and own but we are selling an indirect service. We are providing affordable finance to another customer, we are the people who receive the money in the first step but we are not the people who are borrowers and so we need to connect them to their borrowers in some ways.”
The only thing the social investor gets is the information about their borrowers, apart from the financial returns up to an 8% return on the investment. This is pretty much the same that they can get from fixed deposits too. MicroGraam wants to incentivize investors by giving them the return but the most important aspect for them is to provide interesting information about borrowers. They really need to tell them how the borrowers are being impacted. They share photos, content, videos and success stories of the investments made to the borrowers to let the investors know of the impact they are creating in the borrower’s life.