Understanding Loans with a Human Perspective
Auto Dondé is a loan service where you get money in exchange of your car’s bill. As a Lead Designer, in Fundación Dondé, one of the five largest pawn shops in Mexico, I was responsible to understand who was the main client and how to introduce it into the market from conception, planning and service implementation.
Auto Dondé is a collateral loan service focused on offering larger loans while the client keeps their car and deposits the invoice as collateral. When I joined the team, I was the first designer exclusively dedicated to this project, which was just beginning its planning phase.
My objective, and that of the entire department, was to ensure that Dondé's clientele adopted this product and attracted new clients. This study highlights the effort to establish a market introduction and client acquisition strategy based on specific design research for Mexico.
Problem and research questions
Auto Dondé was a type of loan that, upon my arrival, had already been operating for a few months with few clients. However, business owners had problems placing loans because prospects did not complete the process, resulting in a conversion rate of 2.92%.
After conducting a small internal diagnosis through 9 one-on-one interviews with team members such as developers, managers, salespeople, and the area director, we discovered that we had biases regarding the reasons why prospects wanted to pawn with us. This led to communication strategies that did not connect with prospects, strategic alliances that did not make the loan more attractive, and business strategies that did not solve prospects' problems.
Methodology
To determine Fundación Dondé's clientele, we retrieved the movements of all pawns made during the last 3 months up to the start of the project to evaluate behavior by pawned objects, assigned amount, and payment frequency. Subsequently, we selected cases of interest to conduct quick phone interviews, with the aim of understanding the pawning and liquidation experience with Fundación Dondé.The selection criteria for these cases were proximity to the end of the pawning process, length of time as clients in both successful and failed cases, and the reason for abandonment in the case of prospects who did not finalize the process.
At the same time, we circulated a recognition survey to all users nationwide to understand the reasons for obtaining the loan. Finally, with the data obtained, we cross-referenced data with official Mexican institutions such as INEGI, IMSS, among others, because the results we obtained were directly related to medical emergency situations.
Key findings
- All prospects have multiple problems with their vehicles: Tax debts, missing duplicate keys, etc.
- Prospects deeply appreciate the service, kindness, and quality of information provided, as pawning is not a pleasant process.
- Prospects mention that they do not finish the process due to the number of steps they have to go through.
- There are clients who have previously pawned at Fundación Dondé and use their belongings as a liquidity strategy at any time. Therefore, we developed archetypes based on usage behavior and their perception of pawning.
- Time is a determining factor for the person managing a loan due to an urgent need. On several occasions, prospects stated that they solved their problem through a family member or friend due to the delay in the process.
- Prospects come to pawning as a last resort in a medical emergency.
With this information, recommendations were given to the business and business plans and communication strategies were developed for the acceptance of the Auto Dondé loan.
1. The Auto Dondé landing page was redesigned, where the requirements to be a candidate for a car pawn loan were indicated, in addition to improving communication to connect with the difficult decision of pawning a car and with the situation we identified most often led to the decision to pawn: medical urgency.
2. Strategic alliances were proposed with private hospitals and health services to make the loan a comprehensive solution for prospects.
3. A communication strategy was designed based on the interests of current and prospective clients to attract and retain clients.
4. A change in team mindset was proposed through the phrase: Closing the urgency loop. This promoted viewing the client as a person with an urgent problem that we can help through the business.
Results, impact, and learnings:
During the implementation of these proposals in the service, an increase in prospect conversion of 20% was seen in the following 2 months. Of all clients, 80% stated the reason for pawning as “medical reasons,” including childbirth.
In sensitive products, operable empathy (copy, steps, times) reduces abandonment. The right narrative together with a clear flow is worth more than adding "control" steps. Connecting with the real context (health) legitimizes alliances that add value instead of pressure.
