With help from EY Enterprise Growth Services and impact investor Acumen’s Lean Data team, FM is working to crack the last-mile distribution challenge by finding innovative ways to give BoP customers a voice — to connect directly with them, to develop deeper insights into their needs and motivations, and to use those insights to find better ways of serving them. Here are some of the lessons learned along the way.
1. Technology can help, but don’t rely on it
Where manual systems often rule, even the most basic customer details (e.g., name, contact details, products bought and place of purchase) can prove hard to capture accurately, let alone more insightful information such as how and how often they use a product, and whether they would recommend it to others.
Thankfully, the ubiquity of cell phones and technologies like interactive voice response (IVR) means it’s now much easier for impact enterprises to quickly and inexpensively gather meaningful data directly from end customers. Used with rigor and creativity it can be extremely effective, but it has its limitations.
While IVR is great for sending and receiving messages that don’t require complicated responses, where more complex concepts and information are concerned, there’s often no substitute for speaking with a real person. The question is how do you make it worth people’s while to take time out of their day to engage with you?
In FM’s case, the answer lay in giving customers a toll-free number to activate their product’s warranty — a genuinely distinguishing feature in a market saturated with low quality products. Almost entirely responsible for a 40% increase in customer data held by FM, it shows the value of looking beyond obvious technical approaches and thinking creatively about other ways to connect that can also help accentuate key points of brand differentiation.
2. Value customers for more than their custom
In largely informal economies, where word of mouth is king, customers aren’t just customers. They’re also potentially your sales force, your design team and your corporate strategy department — your best source of market intelligence on what works and what doesn’t out there in the real world.
As part of post-sales service calls, FM found that 80% of its customers were talking positively about their products after a month of use — an extremely valuable source of potential new business that FM is now encouraging with incentives such as free gifts and credit for referrals that result in new sales.
Another revelation uncovered by better data capture was that 70% of FM’s customers are women. That insight has led FM to tap into the existing network of self-help groups that provide funds and technical assistance for women in local villages to start their own businesses. Paid for educating potential users, signing up customers and providing a first point of contact for follow up and repairs, the resulting network of “Saral Jeevan Sahelis” (Easy Life Friends) have been responsible for 30% of all sales over the past 18 months.
But increasing sales is just the tip of the iceberg. With deeper insight into customers’ buying habits — especially the effects of seasonality — FM has been able to radically refine its product portfolio and improve its forecasting and stock management. And with reliable data on how customers use its products, it’s been able to establish that these have helped families save approximately US$5.4 million in energy-related expenditure and provided them with an estimated 65% more hours of quality light to live, work and study.
Naturally, this kind of data not only empowers the business to operate much more efficiently and effectively, but also attract potential investment and encourage thousands more women to join the ranks of its “Saral Jeevan Sahelis.”
3. Treat distributors as extensions of the business
In last-mile distribution networks, local distributors assume particular importance. These people and organizations aren’t just a company’s vendors — they’re the everyday face of the business and custodians of the brand experience.
Are they willing to give local product demonstrations? Would they let a potential customer take a product home and test it before they buy? Would they be prepared to offer customers credit when making a purchase? And are they willing and able to provide efficient aftersales service and repair?