Cover Story : Small Loans, Big Picture

World Vision Micro puts funding into the hands of those who need it the most while integrating Web and print

Lucy Abrasado's loan application isn't likely to pass across a Wall Street banker's desk anytime soon. Not that financial heavyweights would necessarily turn a nose up at the application to expand a pig farm—but the $250 request is probably too small for major underwriting.

That's why Abrasado's picture instead appears on literature from World Vision Micro, the Federal Way, Wash.-based fundraising program for Christian humanitarian nonprofit World Vision's microlending services.

World Vision Micro allows U.S. donors to, in essence, underwrite farm expansion for the grinning resident of the Philippines or other projects for the poor in developing economies. (In the brochure, she stands amid a sunny backdrop of pine trees, rather than sitting in a banker's office.)

The piggery expansion is just one of the loans World Vision Micro is seeking to fund through U.S. donations. Through online marketing efforts started in September 2009 and stepped up via an integrated print campaign introduced in March 2011, World Vision Micro has raised $1.2 million from 6,500 donors to lend to entrepreneurs. Plus, the software World Vision purchased from Swiss-based GMC Software Technology to start the print marketing effort is expected to create efficiencies that will save the organization $1 million a year. In six months, the tool's already saved the nonprofit hundreds of thousands of dollars—paying off its purchase price.

And, partly thanks to the software's as-yet-untapped capabilities, many more marketing initiatives may soon begin.

In the meantime, Abrasado's grin livens up the loan-requesting literature that adheres to World Vision's mission, "Building a better world for children," rather than building up the bottom line for a fat cat on Wall Street. Instead of monetary assets, the brochure notes that Abrasado has three children, and in lieu of an extensive business plan, three short paragraphs explain her needs.

Employing the one-to-one donor communications model World Vision already has in place for its child sponsorships, Abrasado's unique URL on the World Vision Micro site leads loan underwriters to an online profile that shows her request is fully funded by eight donors and is 21 percent repaid. A button atop her profile allows potential donors to find the 84 other entrepreneurs whose loans still needed funding as of mid-July.

"We knew that we needed a feedback loop for donors to know that their money made a difference," says Tim Sawer, vice president of channel and new product development for World Vision. "And we also knew that the aspect of choice was quite important. And so, if we could somehow connect a feedback loop so that people knew what their money was doing, but they got to choose and be engaged ... we knew that we could do the same thing with a loan ... [and] they would continue to become engaged."

'Learning By Doing'
In September 2009, when World Vision Micro launched its website in beta, that was the main channel its leaders figured Micro would need for its marketing efforts.

"We knew if we were going to go forward, we needed to move quickly and decisively," Sawer says. "And we would make a few mistakes on the way. But we had a mantra, 'Learning by Doing,' as we did this. And so, in six weeks, we sort of went from nothing to going live with this. And ... I gotta be honest, I worked in the software industry previously. This was like looking through a screen door, there were so many holes in what we went live with."

In the group interview for this story, those comments brought a round of laughter from Sawer's colleagues Linda Forsythe, vice president of donor engagement operations at World Vision US; Karen Larsen, product director of World Vision Micro; and Dean Owen, director of executive communications for donor engagement, advocacy and communications at World Vision. Sawer paused for a few seconds to wait for the laughter to die down. But then he, too, briefly chuckled with them.

"We actually went live with it," says Sawer. "We thought, 'OK, you know what? We will just be responsive in this to the feedback we get from people.'" The policy of honesty worked, he says. Donors who notified World Vision Micro of the site glitches appreciated the feedback they received.

"[The problems] Tim is talking about are just for the Web presence of the microlending marketing efforts," Owens clarifies. World Vision's Web activities, particularly for child sponsorships, have run smoothly for many years. In addition, Larsen says loan recipients never experienced problems, because World Vision and World Vision Micro "don't play around with money."

As for the World Vision Micro website, Larsen adds: "We ran as a beta for several months, working out some of those bugs which Tim was referring to earlier. And then we did a formal public launch in March of 2010 of the website. ... Our marketing was primarily around search, email, some Web banners and then some social media—working to integrate all of the different channels. But all [marketing channels were] really focused very much on the Web. And then as ... we learned there and we decided we were ready to move into the offline space, that was when we launched [the print] effort."

Testing, One, Two
"Testing was so critical to us," Sawer says. "I'm a direct marketer by training, and the way we moved forward on this—you have to start out a new product with hunches, but we consistently had specific things that we were accountable to a steering committee on: What was our return on investment? What [were] our goals for acquiring new donors? The size of the average gift? The re-engagement on multiple loans?

"And then," he continues, for "each thing on the site, we were measuring what worked, A/B splits, and what worked better than something else. So I need to tell you, at the core of this, there was so much testing taking place and so much measurement that we brought all of that to bear. And the difference, as Karen said, [was that] the iterations weren't, 'Oh, that looks prettier. Why don't we do that?' They were all about, 'Does this work better than this? How's it doing at driving down our cost per acquisition? How is it doing at our renewal rate? How is it doing at the conversion in the cart? How is it doing on the average gift? At driving the average gift up?'"

Monthly meetings to review results also reminded Larsen and Sawer to measure everything, but keep an eye on the big picture as well.

And so, even though the World Vision Micro team already knew its target audience had to be comprised of upsells from existing World Vision donors or their predictive model replicas who hadn't yet donated to World Vision, the team found out that its hunch about a website-centric approach was really overlooking something obvious. Feedback showed that its donors, despite their age, wanted a tactile approach, too.

"Even though we were looking at younger donors and trying to do things in a new, different way, the reality is there's something about the tangibility of a print piece that's just undeniable," Larsen says. "And even when people maybe are responding online, the reality is that the offline activities are what's driving that response."

And Sawer knew that, based on the cost of standard outsourced print projects, Forsythe wouldn't laugh him out of the room for requesting the channel. But she might tell him to "get in the queue" and, if he arrived at the front of the line, to make sure he got the template right the first time.

That's why the solution World Vision chose brought production in-house and allowed endless, low-cost variable data printing (VDP).

Getting a Feel for Print
"Because we are very cautious and risk-averse, we approached [print] in very clear phases," Forsythe says. "And the first phase really complemented the Micro process of 'learn as you go' and married with it the risk-averse culture within World Vision of 'we don't squander donor dollars.'

"So we started with something that was controlled and would allow us to quickly pull back if need be," she continues. "Instead, what we found [was] ... we were able to make modifications to the pieces [members of the Micro team] were traveling with every single week, for less than pennies. The response time was phenomenal for us, and we were able to put [the brochures] back in their hands in whatever city they were in so we could do some more testing." For instance, donor response measured on April 8 at the Billings, Mont., leg of the Women of Faith Over the Top Tour resulted in changes to the brochures that appeared at the tour's Micro booth on April 29 in Las Vegas. Alterations to those brochures meant different literature entered potential donors' hands on May 13 at the Women of Faith Imagine Tour when it reached Des Moines, Iowa.

Each event World Vision Micro used to test the print piece hosted between 4,000 and 10,000 people, Larsen says.

"It was almost like speed dating, or focus grouping and speed dating combined," she says. "We were able to talk to people, and we could really see what they were responding to, what questions they were asking."

All this work meant that, at the events alone, World Vision Micro realized a 3 percent response rate. And that percentage continues to rise as Micro continues to test and change the print pieces, Larsen says.

As of late June, each brochure featured a picture of a different entrepreneur, an at-a-glance biography, a synopsis of need, information about the recipient's community and an all-important unique URL. That landing page, too, is tested.

"This [software] allowed us to take the transparency and the choice that were available online and take them into an offline environment," Larsen says. "As we look at approaching new target audiences and a younger generation of donors, the expectation of transparency and choice is going to increase exponentially, I think, over time. So I think more and more we're seeing in marketing that we have to find a way to take the transparency and choice that donors and consumers are expecting and offer it through traditional channels."

Part of that, Larsen says, is that World Vision Micro keeps its audience in mind when marketing. The audience is filled with potential donors who want to help eradicate poverty by providing "a hand up and not a handout." Messaging is already differentiated by the source—such as whether the donor came in through a sign-up on a blog relating to international relief, women's empowerment or geography. Micro surveys donors on, for instance, contact frequency.

But in reality, Larsen and Sawer agree, the best results still come from testing.

Envisioning the Future

"World Vision nailed it," says Doug Cox, GMC's director of North America Enterprise Business. "And they have so many huge opportunities in front of them. ... It's, 'Which step do we want to pick?'"

And, while GMC's slated to meet with World Vision to train the organization on the software's remaining capabilities, it's up to the nonprofit to decide what to do during Phase Two of Micro's marketing program. "They know best where to go," Cox says.

"I think ultimately where we're going to go with the GMC product is the integration of the online and the offline," Sawer says. As of presstime, World Vision was working on implementing the software's multichannel capabilities for enhanced customer communications management, such as donor emails and electronic updates. Cox says the software can even update individuals via their social networking accounts.

As of late June, donors had already heard from World Vision Micro about their entrepreneurs' mid-term loan updates and final reports. Donors could also "learn about the entrepreneurs' communities, watch their businesses grow and see how a single loan can touch several lives."

The eight donors listed on Abrasado's Web page soon will have more ways to learn how their $250 enhanced her business and, hopefully, her life. And how, instead of fatter cats, there'll be fatter pigs.

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