(Note: This Q&A was originally featured on March 27, 2015 with update provided on April 29, 2022)
Cebuana Lhuillier is in the Guinness World Record as the largest chain of pawnshops in the world with some 3000 outlets, bigger than many banks combined, serving mostly – the ordinary “unbanked” population. Its president and CEO, Jean Henri Lhuillier was a recipient of the 2nd Mansmith Innovation Awards for introducing the concept of “techbrick” as a valuable component of its ever-evolving DNA as a Group– combining its technological advancements with its strong physical presence through its brick-and-mortar network. Here he shares his thoughts about innovation.
Q1: How do you go about understanding your target consumers and what have you discovered about them?
A1: 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 in our digital platforms. On top of these, we engage on a national scale UAI study complimented with other several consumer researches thru FGD etc.
Our frontline people are there where the actions are, we have an open feedback system. It’s important to receive constant feedback, they all have direct access via a dedicated email address & contact numbers to me. I also believe in seeking direct information from my managers via the CEO lunches held wherein I get to meet with the staff underneath managers who directly report to me.
Our market has changed significantly. They have become more educated about services and products they avail. They have become more discerning and perceptive, ever more conscious of value for money, customer service and quality.
The past few years, along with the pandemic, also significantly changed the way our clients do business. The advent of technology, along with the habits and needs of our clients, has pushed the company to explore more solutions to better serve them. Thus began our foray as one of the first innovators in fintech within the micro financial services industry. The market now demands products and services to be instant— from their food, to groceries, to utilities, everything is expected to be online. Knowing this, we knew that in order for us to fulfil our commitment of financial inclusion to our Ka-Cebuanas, we have to innovate and assert our presence online, through use of innovative digital channels that bring the serbisyong Cebuana Lhuillier to the digital space.
Q2: From pawnshops, you also have remittance, bills payment, collection, e-loading and insurance. In fact, you have tie-ups with close to 100 other companies. Which of these products are you most excited about? Which represents the future of Cebuana Lhuillier?
A2: Cebuana Lhuillier believes in empowering the masses through financial inclusion. Each product we come up with ensures more access for our clients to gain financial access and security. We are excited with every product we bring to the market. We have the full application of the “sachet” concept to make it within the reach of our market.
From pawning to remittance to micro insurance, all of which are part of our community empowerment vision. Our money transfers and micro insurance business remain strong and are constantly evolving to better serve our clients. For example, our micro insurance business through Cebuana Lhuillier Insurance Brokerage (CLIB) is now one of the country’s leading contributors in the constantly increasing number of insured Filipinos.
Two years ago, we also launched Cebuana Lhuillier Micro Savings. Together with Cebuana Lhuillier Bank, we were able to educate a number of our kababayans, especially in the C&D market, on the importance of saving for the rainy day. Currently, Cebuana Lhuillier Micro Savings has close to six million micro savings account users and the number is still growing.
Suffice to say, all of these products are essential in our mission of bringing financial inclusion to every Filipino. What excites me together with the rest of the organization — is that now, we have the means to offer these products to more Filipinos thru our digital channels like the Cebuana Xpress, eCebuana, and Quikz apps; as well as through our web platforms, like Cebuana-from-Home, Cebuana Lhuillier Jewelry Online, and ProtectNow. Through these digital tools, we not only bring financial inclusion but also financial mobility to the communities we serve.
Q3: You are pioneering in micro insurance with over a million policies sold monthly. In 2012, you launched ‘Barangay Cebuana’ where your branch personnel visited 750 barangays resulting to over 300,000 policies but partly cannibalized the store sales. What changes are you instituting to gain big wins on both fronts?
A3: For micro insurance, out-of-branch efforts were meant to educate communities about the value of insurance. And the true measure of the success of such an 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 in the bigger picture, we are actually reaching and insuring more Filipinos coming from both fronts combined.
Bottom line, 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 is not limited to our brick and mortar branches.
From the time when this interview was first published, CLIB has grown so much over the last few years. From a small firm, it’s now a full-fledged brokerage firm offering micro insurance products from many of the country’s most trusted insurance providers. Our flagship product, ProtectMax, which pioneered the concept of sachet insurance, remains the product of choice for many of our kababayans who were looking for affordable insurance.
Currently, our microinsurance business has also branched out to digitalization as a means to better reach clients. We made our products more accessible – anyone interested in availing an insurance product can head to ProtectNow.com, as well as in any of our more than 3,000 branches nationwide. We also opened Alternative Distribution Channels (ADCs) in some of the major malls in Metro Manila, with more to come in the coming years.
Q4: One of your core values is innovation. What innovation are you proudest of so far?
A4: Cebuana Lhuillier is a game changer, we have changed the face of pawning, remittance and micro insurance. 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 move in creating a culture of appreciating our clients , making sure that the clients who are the ” unbanked ” are treated even better than those who are ” banked. ”
We are the first to introduce a loyalty program in the micro financial industry through 24k loyalty program. This program enabled us to understand our clients even more. And that simple understanding made our loyalty program achieve the highest availment/ membership, frequency and recency in our transaction records. Currently, we made 24k more powerful with more discounts, freebies, and points made available to card holders. It’s also made more accessible through the 24k Online site.
With Innovation as one of our company’s core values, it’s not surprising that we have made a lot of strides in exploring digitalization in the last few years. As part of our digitalization efforts, we explored the use of apps and web platforms to make our products and services more accessible, efficient, and convenient.
Seeing the company transition into FinTech makes me proud, not only of what we have achieved, but also of the hard work and dedication of the employees who worked hard in order to make digitalization a possibility.
Q5: What other programs or products can you also claim as the industry’s first?
A5: It’s quite a lot – such as the 24k Loyalty program, micro insurance, 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, and Cebuana Lhuillier Micro Savings.
We are also the first in the microfinancial services industry to offer our clients access through apps: eCebuana, Quikz, and Cebuana Xpress, dubbed as the ultimate microfinancial services app. Add to that Cebuana-from-Home and ProtectNow.
Q6: As of April 2022, you have over 18 million members of your 24k rewards program. Other than your existing products, what can you do to leverage your power to radically help improve the life of your cardholders?
A6: We know every cardholder we have. Our in-market strategy for new products and services are normally intended towards them based on their behaviour, financial transactions and general profile. For example, our upcoming non-collateralized micro loans for entrepreneurial purposes are geared towards targeting our international remittance members who are either already on a small scale business who wants to expand or planning to put up one. . . We take our 24k members to heart.
Q7: Prior to the pandemic, Cebuana Lhuillier launched the annual Happiest Pinoy contest with over 800,000 nominees yearly and the annual My Happiness photo contest. What was the insight behind these contests? What are you trying to accomplish?
A7: The search for the Happiest Pinoy is actually an advocacy of our micro insurance brand with a long- term objective to become a full brand campaign for the entire Cebuana Lhuillier eco system of brands. Traditionally, insurance was 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 simply give financial access . . . we bring financial solutions/ literacy, security, bridge to a brighter future not just to individuals but more importantly families and communities, thus happiness. Who doesn’t want to be happy? We want to have happy clients, happy employees and happy shareholders.
Josiah Go is chair and chief innovation strategist of Mansmith and Fielders Inc. The 2nd Mansmith Innovation Awards and Summit can be viewed for free for a limited period via www.continuum-edu.com