Adopted Experiment

[JAN 19] Customer Segment Analysis (Define) - Fiji SoCon I

Lean Phase: Customer Segment/Problem


The customer segment is small businesses with the following attributes:

  1. Been selling products/ offering services for at least 18 months.

  2. Running the business by themselves or with at most two other employees.

  3. Mainly in food, retail, & service industries (repairs, transport and hairdressing)

The problems faced by this customer segment are:

  1. Lack of access and/or awareness of financial advisory services.

  2. Lack of access to credit facilities and financing

  3. Lack of access to the capital required for expansion (no space to offer more products, lack of tools/training)

These assumptions have arisen from secondary research, which is consolidated in the following document:

Time Box: 1-2 weeks

Success Metric:

% of businesses which meet the customer segment assumptions that have the assumed problems

% of businesses which have the assumed problems that meet the customer segment assumptions

Green Light- Proceed with the next stage of surveying/analyse note data taken during this survey to determine possible solutions to the problems

Success point: 60% of respondents identify with the above assumptions

Orange Light- Optimise the survey, based upon feedback from those surveyed, revise assumptions as necessary & reexamine them via the revised survey

Failure Point- 30% of respondents identify with the above assumptions

Red Light- If the results fall below the failure point, they will be examined to determine if any residual assumptions can be made/validated & if so the next experiment will be designed to test these/based off them. If this is not the case, the customer segment & problem will be reexamined as a whole and another experiment will be designed based upon the new analysis.

Experiment build:

Testing at least 30 small business owners

1. Create a survey to collect data on:

    a) General demographic information

    b) Interest in Loans of $50-500 size

    c) Prior experience with loans/grants/financial services (to determine what kind of reception we are likely to receive)

2. Create google surveys and spreadsheets

3. Set up meetings with businesses from a variety of industries, set up village meetings, set up market stall visits.

4. Create a sales script and practice.

5. Survey 30-40 respondents

6. Compile and analyse the collected data to prove or disprove the assumption

7. Type up the final experiment results into results document and upload to Crowdicity.

Tagged users
edited on 13th January 2019, 21:01 by Jess Riley

Jess Riley 5 months ago

Status label added: Experiment adopted

Reply 0

Fiona Aaron 5 months ago

Just a couple of questions on this:
1) the document attached refers to grants of $1000 given by the government. That's a grant, not a loan right? If it is a grant, why are we using this as the reason to go to this customer segment? Have they applied for loans and not been successful?
2) Also, if we are having difficulty with our revenue model linking to fuel ($80-$100 per loan), why are we bothering surveying for loans between $50 and $500? Shouldn't the survey cover $200-$1,000 (or a number that we've gotten from our financial analysis which is our 'minimum' loan amount to make a proper margin from?
Hope this makes sense!

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Brianna Townes 5 months ago

1) Yes, the $1000 government grants are grants rather than loans, but this is an indicator that there is a need for capital within the market of Fijian small businesses, and the analysis of what the grants were spent on has allowed insight into the potential uses of loans in this space
Part of the purpose of this experiment is to analyse whether or not the need for capital could be satisfied with loans from PEV.

2) At this stage, the low profitability of the loan is due to the assumption of every loan customer defaulting of their final 2 payments, resulting in a small overall loss. This assumption was made by a previous team and is fairly pessimistic. We would hope that most of our loans would eventually be repaid in full and if not that the default rate would be much lower than 50%. If all of the loans are repaid in full their is a net profit margin of 28.74%
The $50-$500 price point for loans is a little arbitrary, but it served as a starting assumption that we wanted to test. We agree with you that we may need to increase the minimum loan amount from $50 in order to achieve the appropriate margins. At the moment we are still trying to establish a viable customer segment, we certainly agree that this may need to change!

Thankyou for the feedback, please let us know if you have any more questions!

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Liv Hendy 4 months ago

Hi team, Could you attach/comment the actual survey build for this experiment would be very keen to see the questions/data points you have been collecting.

Could I also enquire how did you build out the surveys regarding 'interest in loans' what's been the methodology for the team in determining this beyond 'yes' or have you just been using interest as a metric of success.

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