Selling BDS (management training) to rural customers in Sri Lanka, ILO 2004

    This paper explores by means of theoretical and action research if it is possible to offer Business Development Services, such as management training to poor customers on a commercially sustainable basis. The hypothesis is that either the product or the delivery channel has to be modified in order to cater to poor customers. In some cases both must be modified. This paper makes the assumption that the product, ILO-SIYB (Start and Improve Your Business) training is suitable for poor customers, but the delivery channels must be modified.

    Two pilot projects were completed with modified training delivery mechanisms. The first built on a mobile business centre that in cooperation with the district chamber of commerce went around to small villages to market and conduct training the same day. The second pilot project built on working very close with a Community Based Organization (CBO) as a natural link to their poor members. Many of the tasks were then decentralized to the CBO.

    Summary of results
    Main findings were that by working closely with a CBO many of the indirect costs can be overcome and service can improve and in the end lead to a commercially sustainable service. Commercial sustainability measured as cost recovery was 100% for the CBO approach, while customer retention rate was only 30%.

    A few key aspects turned out to be particularly important. To ensure technical sustainability the appropriate segment must be identified that can benefit from the particular training. Trainer quality became essential in training poor customers since they need even more examples to understand the concepts.

    For the institutional sustainability trust from the target group played a crucial role in getting participants to come and pay for training. Trust was obtained best from working closely with an existing community based organization or from having a massive promotional camapign with many people, which is too expensive. A second key aspect regarded promotion. Only direct marketing was efficient especially together with a local organization.

    Financial sustainability in terms of cost recovery could be obtained by making customers pay to the local organization. Costs were reduced by marketing the service in conjunction with a monthly meeting, conducting training in temples or schools and transporting by motorbike. Costs can be further reduced by reducing the material cost involved. Maximum utilization of the trainer can be achieved by combining training in the morning and follow-up in the afternoon.

    Associated Activities and Documents
    Market Assessment
    »SEEDS Sri Lanka 2001
    »Supplier diagnosis of the market for BDS in Sri Lanka, GTZ - ILO 2003