Thread Capital is an NC-based nonprofit organization that provides capital, coaching, and connections to small businesses who have traditionally had challenges accessing resources, and is an extension of the NC Rural Center and it’s greater mission of financing North Carolina entrepreneurs to create a robust and thriving small business community.
They specifically focus on serving small businesses that are owned by people of color, women, low-income individuals, and rural-based individuals, and help make entrepreneurship an achievable goal for any North Carolinian who has a viable business idea.
Thread Capital’s small business loans fill a major gap by specializing in loan offerings that range from $500 - $250k, which can serve a handful of small business needs.
This includes startup loans, small business loans, coverage for working capital, and disaster recovery loans to get businesses back on their feet after a hurricane or pandemic has hit. Thread Capital is also unique in their willingness to be more flexible in providing loans to entrepreneurs with credit challenges as well as smaller amounts of collateral.
But Thread is so much more than a loan provider.
They also provide coaching and connections to resources that help small businesses across the state thrive. Thread Capital proudly serves as a connector between underserved small businesses and North Carolina-based entrepreneurial resources like the Small Business and Technology Development Center (SBTDC), community college Small Business Centers, accelerator programs, other lenders, informational webinars, and strategic connections that could help their business grow.
Much of Thread Capital’s challenges have stemmed from a positive outcome — exponential growth.
The organization experienced a significant boom due to its COVID-19 Rapid Recovery loan program, and they’ve outgrown their current processes and marketing messaging.
- A lack of clarity within the market around its products and service offerings, particularly its coaching services.
- The perception of Thread Capital being a “last resort” lender rather than a potential strategic partner for small businesses.
- Being known primarily for their focus on recovery loans rather than their small business loans.
For Thread Capital to maintain its current trajectory and continue to scale upwards, Noel & Co. worked with Thread to establish these goals for the business and its marketing efforts:
- Develop an impactful marketing strategy that allows them to better understand their customers, reach out to them in the appropriate channels, and leverage marketing in a way that truly supports their strategic business goals. This includes better communicating the organization, its offerings, and how Thread Capital is so much more than a “last resort lender.”
- Hire a full-time employee that’s fully dedicated to Thread Capital’s marketing efforts.
Marketing Strategy Development
To help Thread Capital better understand its market, clients, and set itself up for marketing success, we needed to understand Thread Capital on a deeper, almost personal level.
To guide Thread on their marketing strategy, we put together a robust 100+ page strategic marketing plan that documented and outlined these key points:
- What employees thought about the Thread culture, values, perception, challenges, and competitors
- Main competitors to Thread, as well as key takeaways about the competitive landscape
- Voice of The Customer assessment, which allowed them to better understand what people did and didn’t think about Thread Capital
- Persona research based on these client interviews
- A one-year timeline of what Thread Capital needs to do to advance its marketing, including hiring a dedicated marketing professional
- Resources to help guide Thread Capital’s marketing endeavors
We first took the time to understand how the team viewed the company by conducting 14 internal interviews with Thread Capital employees and other stakeholders.
Some interesting parallels we heard through these interviews included:
- Strong belief around the concept of “upward mobility” and how it contributes to the impactful work they are doing
- Pride, passion, and commitment around the work they do and the mission behind it
- The mantra of telling small business owners “not yet” to qualifying for a potential loan rather than “no,” and how they help potential borrowers move from “not yet” to “yes” when they feel confident the business is set up up for success
- Frustration around the perception that Thread Capital is a “last resort lender”
Additionally, we also took time to learn more about Thread Capital’s competitors, marketing challenges, and target clients, with the general goal of understanding how to position Thread within the context of the broader market as well as highlight what makes Thread so unique.
Lastly, we wanted to establish Thread Capital as a trustworthy and legitimate lender that’s invested in the growth, development, and success of its clients.
To better understand Thread Capital’s clients, we conducted Voice of Customer (VoC) research by leveraging research recently conducted by another vendor.
This research was collected through interviews with 12 businesses who received loans from Thread Capital. Thread Capital provides three types of loans to small business owners:
- Small Business Micro-Loans
- COVID Rapid Recovery Loans
- Disaster Recovery Loans
By analyzing the conducted research, we were able to understand how these types of borrowers heard about Thread Capital, the resources they utilized throughout the loan process, the resources Thread requested from the business, and the feedback the businesses had for Thread Capital.
Overall, this analysis not only allowed Thread Capital to understand what customers thought of and how they discovered them, but also understand what more they needed to provide and what barriers they needed to break down for their clients to better serve them.
To help Thread Capital better position itself as a compassionate lender that is invested in client success, we needed to understand Thread Capital’s competitors to understand their competing strategies as well as what they lacked.
Through our Competitor Assessment process, we were able to identify and categorize Thread Capital's “competitors” into two categories — Predatory Lenders and Community Development Financial Institutions (CDFIs).
(It is important to note that Thread Capital is also a certified CDFI and they consider other CDFI institutions as both partners and “friendly competitors” because they all have the same end goal — serving under-represented business owners.)
This approach allowed us to identify common themes throughout these different companies, including how these companies process loan applications, what loan sizes and terms they offer to small businesses, the loan and business education they provide, and their emphasis on quick or accessible funding.
This analysis allowed us to hone in on Thread Capital’s messaging, find ways to speak to its audience in a manner that meets their needs while retaining their voice, and identify where Thread can fill in the gaps left by their competitors.
As a result of our market research and analysis, Thread Capital has a better understanding of itself, its competitors, and its client’s wants and needs.
From there, we helped them build a one-year marketing strategy and made the following recommendations (among other strategic recommendations):
- Perform thorough web content analysis and updates
- Create persona-specific content through a blog and newsletter that attracts, engages, and delights its audience
- Hire a new Marketing Manager to bring more Thread Capital marketing in-house
Additionally, we mapped out various marketing efforts that Thread Capital can perform — both long and short term — that will help generate excitement, interest, and more opportunities for the business.