Building Customer-Centric and Market Driven Firms Through Management Consulting: A Field Experiment with SMEs in Nigeria

Last registered on June 22, 2020

Pre-Trial

Trial Information

General Information

Title
Building Customer-Centric and Market Driven Firms Through Management Consulting: A Field Experiment with SMEs in Nigeria
RCT ID
AEARCTR-0004045
Initial registration date
March 26, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
April 06, 2019, 3:19 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
June 22, 2020, 5:09 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Region

Primary Investigator

Affiliation
World Bank

Other Primary Investigator(s)

PI Affiliation
Stanford University
PI Affiliation
Stanford University

Additional Trial Information

Status
On going
Start date
2016-02-09
End date
2020-10-31
Secondary IDs
Abstract
Many small firms lack the managerial capital (e.g., business skills in marketing, finance, etc.) needed for firm growth. One approach in many development programs has been to provide small firms with more prescriptive consulting services focused on implementation of a defined set of management practices, then examine the impact on financial performance (e.g., profitability, productivity). However, there has been limited research on understanding the role of more progressive consulting services aimed at dynamic business changes and the effect on marketplace performance (e.g., sales, sales growth). Consequently, there has not yet been a study investigating the impact of marketing-linked consulting interventions on the top-line of small firms – including measuring main effect outcomes such as sales and understanding how different mechanism channels might drive this growth. For instance, we know little about how to stimulate intermediate outcomes more aligned with marketplace performance such as generating demand via greater customer closeness, expanding customer reach via new geographies, channels or segments, and changing the customer offering to better meet needs and preferences – in other words the Customer Centricity of a firm. We therefore test the impact of more progressive, dynamic consulting services on firm sales and marketplace-related metrics through a randomized experiment with Nigerian entrepreneurs. The sample of small and medium firms will be randomized into three groups: a control group, a group given business training for the owner and a group given consulting services. Impacts on business practices, firm sales and employment growth, market growth and change in customer centricity will then be measured to determine the most effective way of building skills in SMEs.
External Link(s)

Registration Citation

Citation
Anderson, Stephen, Rupali Kaul and David McKenzie. 2020. "Building Customer-Centric and Market Driven Firms Through Management Consulting: A Field Experiment with SMEs in Nigeria." AEA RCT Registry. June 22. https://doi.org/10.1257/rct.4045-1.1
Former Citation
Anderson, Stephen, Rupali Kaul and David McKenzie. 2020. "Building Customer-Centric and Market Driven Firms Through Management Consulting: A Field Experiment with SMEs in Nigeria." AEA RCT Registry. June 22. https://www.socialscienceregistry.org/trials/4045/history/71018
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Firms will be randomly assigned to a control group or one of two interventions: business training, business consulting
Intervention (Hidden)
Implementation of the program is occurring through a project implementation unit set up under the Nigerian Federal Ministry of Industry, Trade and Investment. Firms that meet the eligibility criteria have been randomly assigned to one of the following three experimental groups:

(i) Control: Firms in this group are not offered an intervention. However, they will be tracked over time and interviewed in follow-up surveys.

(ii) Training: Firms in this group are provided with a mix of online and in-class training focused on strengthening their capacity. The curriculum is based on the IFC Business Edge and adapted to the local context. The core modules are in financial management, marketing, general operations, and human resource management. Firms can also choose from among modules on personal productivity, enterprise governance, and tourism and hospitality. Firms have to complete a minimum of 12 days in-class along with online courses. The entrepreneurs can choose the dates, locations, and topics for the modules. This training intervention is offered for free to the firms.

(iii) Consulting: Firms in this group are offered 11 days of business consulting services (~88 hours) by consultants over 6 to 9 months, meeting at least once per month. The initial visit (about 8 hours at the business site) helps the firm define a Needs Assessment and a Growth Strategy. The consulting services provider then proposes a list of business areas (Scope of Support) where it can advise the entrepreneur for the remaining 80 hours. These activities are customized to each firm but typically focus on Sales and Marketing, Finance, Management, Operations, and Human Resources. This consulting intervention is offered for free to the firms.
Intervention Start Date
2017-01-16
Intervention End Date
2018-02-15

Primary Outcomes

Primary Outcomes (end points)
In the short-term, we are interested in which program has the most impact on business practices
In the longer-term, key outcomes are business survival, profitability, sales, and employment. Our primary outcome variables are metrics related to growth in top-line performance – such as sales, change in sales, return on employees or assets, etc.
Primary Outcomes (explanation)
The pre-analysis plan will describe how these outcomes are defined and constructed

Secondary Outcomes

Secondary Outcomes (end points)
Our secondary outcomes include a broader set of effects typically studied in the literature – e.g. profits, firm survival, firm employment, firm registration status.
Secondary Outcomes (explanation)
The pre-analysis plan will describe how these outcomes are defined and constructed

Experimental Design

Experimental Design
The sample of firms was randomly assigned at the individual level into three experimental groups, stratified by induction workshop . Firms are randomly allocated to one of the two treatments, or to a control group - 50% of the firms were allocated to the control group, 25% to consulting, and 25% to training.
Experimental Design Details
Identification of effects will be by randomized controlled trial. The sample of 1,010 firms was randomly assigned at the individual level into three experimental groups: 50% were allocated to control, 25% to consulting, and 25% to training. stratified by induction workshop (denoted induction batch). For example, the set of firms that attended the Kano induction workshop on a particular date would form an induction batch. Firms, within the same batch, are then randomly assigned to the two treatment groups and a control group. Randomization is done in an office using a computer program (e.g., Stata).
Randomization Method
Randomization done in office by computer, stratified by enrollment batch.
Randomization Unit
Firm
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
The number of clusters is the same as the number of units. It is 1010 firms.
Sample size: planned number of observations
1010 firms
Sample size (or number of clusters) by treatment arms
The sample size allocation across the 3 groups is 50% in control and 25% to each treatment arm -
Control - 505 firms
Business Training - 252 firms
Business Consulting - 253 firms
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
See pre-analysis plan.
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials