During tough economic times, the pressure is on businesses to come up with creative financial models that will ensure they remain within reach of clients who are feeling the pinch. Nowhere is this more relevant than in sectors, like training, which are the first to feel the effect of corporate cost cutting measures.
Fortunately, Jules Newton knows a thing or two about how economies of scale can bring down the per head cost of training. It’s something she learned as one of the founders of Ngikwazi Field Marketing, which recruits, trains and supports the 8 600-strong nationwide retail network for national lottery operator, Gidani. “On a contract of that size you learn how much price per head can come down if your numbers are big enough,” she says.
It’s a lesson she’s now applying to the field of training with Footprint, a company that delivers basic life skills training to people at the bottom of the pyramid. What’s innovative about Footprint is not only that it delivers training on a scale beyond what’s been done before by most training companies, but that it does so at prices which significantly undercut traditional training models. Furthermore, the type of training it offers allows prospective clients to tap into their corporate social investment (CSI) and enterprise development (ED) budgets – an alternative and often untapped revenue stream.
A new training model
Newton explains how it all works: “Footprint focuses on large corporates and government institutions that need to deliver life skills, non-brand specific training that has a benefit to the lives of people in the mass market. This might be things like basic financial literacy, wellness programmes, how to save electricity or HIV/Aids awareness.
“We produce picture-based training material that’s langauge-agnostic and easily accessible, so the trainers themselves don’t need to be highly skilled. We source them from the target communities and up-skill them to deliver the training.” Because the trainers come from within the communities themselves, the company saves significantly on travel costs. The model allows training to be delivered at R100 a head, which includes a cooked lunch for delegates. Compared to blue-chip corporate training of between R1 250 and R2 500 per person per day, or even community training of between R350 and R900, the savings are considerable.
Igniting small enterprises
The trainers run their operations as micro-enterprises, with Footprint providing support in the form of basic business training and mentors. “They get paid to organise a suitable venue and catering, and are also paid a per head incentive for any learners they manage to source.
“They speak the language of the community and have an established relationship with the people there,” says Newton. The model offers an ideal way for corporates to invest their enterprise development funding and earn broad-based black economic empowerment points, or to channel CSI funding to community education projects on issues such as HIV/Aids. Own Two Feet is an NGO that’s been established specifically to manage and channel such ED funding. “Financial institutions need to invest in financial literacy programmes for the community in compliance with the requirements of the Financial Services Charter, and this is something Footprint can do at a fraction of the cost and with far greater reach than if they were doing it themselves,” Newton explains.
Hollard, Edcon, Pep, the Financial Education Fund and the Financial Services Board are just some of organisations that have seen the benefits Footprint can deliver. The scale of what the company can achieve is considerable. In its first year, it started 25 predominantly women-owned micro-enterprises, through which it trained over 17 000 South Africans in basic financial literacy skills.
And that’s just the beginning. “We now have an ambitious plan to expand our South African operations to include over 100 micro-enterprises training hundreds of thousands of South Africans annually, in various programmes that empower people. And soon, we intend to expand our model and operations into Africa and beyond,” says Newton. The model only works at scale so the challenge now will be to secure contracts that are large enough to make the company’s vision possible. But Newton has a solid value proposition: “This is the way to educate people at the bottom of the pyramid, and we all know how desperately South Africa and Africa need that. Our company provides a way for corporates and governments to meet this need.”
Player: Jules Newton
Contact: +27 11 614 0206