Know your customer; profit from insight
Cebuana Lhuillier holds the Guinness World Record for the largest number of pawnshops in the world, with close to 2,000 outlets—bigger than many banks combined. It serves mostly the ordinary “unbanked” population.
Its president, Jean Henri Lhuillier, shares his thoughts on innovation.
Question: How do you go about understanding your target consumers and what have you discovered about them?
Answer: We know a lot about our clients, and the market we serve. We talk to our clients in so many ways, in our branches, through our customer care hotline and our digital platform. On top of this, we engage on a national scale UAI study, complemented by several consumer researches through FGD, etc.
Our frontline people are there where the action is. We have an open feedback system.
It’s important to receive constant feedback. They all have direct access via a dedicated e-mail address and contact numbers to me. I also believe in seeking direct information from my managers via the CEO lunches held wherein I would get to meet with the staff underneath the managers who directly report to me.
Our market has changed significantly. The consumers have become more educated about the services and products they avail. They have become more discerning and perceptive, ever more conscious of value for money, customer service and quality.
Q: Apart from pawnshops, your company also offers remittance, bills payment, collection, e-loading and insurance services. In fact, you have tie-ups with close to 100 other companies. Which of these products are you most excited about? Which represent the future of Cebuana Lhuillier?
A: Cebuana Lhuillier believes in empowering the masses through financial inclusion. Each product we come up with will enable clients to gain more access to financial access and security.
We are excited about every product we bring to the market. We are applying the “sachet” concept to make our services within reach of the market—from microlending/loans to remittance and microinsurance. All are part of our community empowerment vision.
Remittances are a focus right now as the influx is growing steadily. We are anchoring our network to this. But what really excites me is our microinsurance business—it has been fulfilling. And with the addition of a microlife policy this year, we will be able to educate the CDE markets.
Cebuana Lhuillier will be at the forefront of the microfinancial industry, having a complete portfolio of products and services that not only help but improve the lives of our clients and communities.
Q: You are pioneering in microinsurance with over a million policies sold monthly. In 2012, you launched “Barangay Cebuana” where your branch personnel visited 750 barangays, resulting in over 300,000 policies. This initiative partly cannibalized store sales.
What changes are you instituting to gain big wins on both fronts?
A: For microinsurance, out-of-branch efforts were meant to educate communities about the value of insurance. The true measure of the success of such info dissemination campaign was the number of people who availed of it, and we were successful in doing that.
Out-of-branch activities may have slightly cannibalized our branch sales, but all succeeding transactions/renewal are directed to branches located within the community. So, looking at the bigger picture, we are actually reaching and insuring more Filipinos coming from both fronts combined.
In business you can’t wait for your clientele, you need to reach out physically, and electronically. This is our strategy—to provide more customer touch points. Thus, access to our products and services is is not limited to our brick-and-mortar branches.
Q: One of your core values is innovation. What innovation are you proudest of so far?
A: Cebuana Lhuillier is a game-changer: We have changed the face of pawning, remittance and microinsurance. We don’t walk around telling our market of our capabilities, they tell us what they need and we develop the capabilities to serve them even better.
Our innovation is born out of our need to create a culture of appreciating our clients, making sure that the clients who are “unbanked” are treated even better than those who are “banked.”
We are the first to introduce a loyalty program in the microfinancial industry. This program enabled us to understand our clients even more. And that simple understanding allowed us to achieve the highest availment/membership and frequency in our transaction records.
Q: What other programs or products can you also claim to be the industry’s first?
A: Loyalty program, microinsurance, bills payment in the pawnshops, customer convenience programs (renew anywhere, send/receive anywhere), digital platform for transaction updates, deposit links to bank accounts, network remittance, collection services, Cebuana Lhuillier On Wheels, insured pawn items, web promos, social media based promotions, etc.
Q: Your 24k rewards program now has over five million members. Other than your existing products, what can you do to leverage on your power to radically help improve the life of your cardholders?
A: We know every cardholder we have. Our in-market strategy for new products and services are normally intended towards them, based on their behavior, financial transactions and general profile.
For example, our upcoming noncollateralized microloans for entrepreneurial purposes are geared towards our international remittance members—either a small-scale business that wants to expand or an entrepreneur that plans to put up one.
We take our 24k members to heart.
Q: Cebuana Lhuillier launched the Happiest Pinoy contest with over 10,000 nominees yearly, and the annual My Happiness photo contest. What was the insight behind these contests? What are you trying to accomplish?
A: The search for the Happiest Pinoy is actually an advocacy of our microinsurance brand with a long-term objective to become a full brand campaign for the entire Cebuana Lhuillier eco system of brands.
Traditionally, insurance would be introduced to the market almost like a scare campaign. We wanted to do it differently by anchoring on happiness, which we Filipinos are known for. It links to the very culture of our people, thus the instant connection it has to our market.
This campaign will not just improve our relationship with our market but also lift the stigma of the old pawnshop concept. Our brand doesn’t just enable financial access, we also provide financial solutions/literacy, security, bridge to a brighter future, not just for individuals but, more importantly, for families and communities.
Who doesn’t want to be happy? We want to have happy clients, happy employees and happy shareholders.
We started conservatively with this campaign gaining about a few hundred nominees in our initial run, then to more than 10,000 in the next run. Currently, in the middle of our third run, we have already received more than 100,000 nominations.
(The author is chair of marketing and innovation training firm Mansmith and Fielders Inc. Follow his blog www.josiahgo.com to learn from his Q&A with many industry thought leaders.)
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