Three Ways Inclusive Businesses Can Become More Customer-Centric
While “putting the customer first” is fundamental to any business, inclusive businesses that cater to the millions of people at the base of the pyramid (BoP) may find it difficult to deliver on this mantra.
For a start, BoP markets are vast and diverse. Consumers are poor, they may be illiterate and are likely to live in rural, hard-to-reach areas. Gender dynamics play a major role – what if the user of your innovation is a woman, but she does not control her family’s purse strings? Understanding this large and heterogenous group is difficult.
Furthermore, many social entrepreneurs are motivated by the desire to “help” poor people, rather than attending to their needs. But BoP consumers don’t want cheap products, they want high-quality, risk-free solutions. These are not easy to deliver. Similarly, for solutions to reach scale, large-scale financing is often required. However, the rhetoric around donor funding remains focused on serving “beneficiaries,” rather than recognising this group as customers. This can result in solutions that are centred around value as donors and inclusive businesses define it, rather than as the customer does.
What are some steps that inclusive businesses can take to become more customer-centric? The latest issue of the Inclusive Business Action Network’s online magazine asked thought leaders and social entrepreneurs to consider this very question. Based on their responses, here are three ways it can be done.
Get into the customer’s shoes
After a successful pilot scheme installing chlorine dispensers at boreholes in Uganda to purify water collected in jerry cans, the NGO Evidence Action noticed that adoption rates began to drop dramatically. They had just secured a $2 million grant from USAID’s Global Development Lab and the Skoll Foundation to scale the innovation, and faced a dilemma of what to do next.
They made the smart decision to get into the customer’s shoes and find out what was affecting those adoption rates. They discovered what they needed to get back on track: regular maintenance to make sure dispensers were almost always working; a reliable supply of chlorine; and a more dedicated group of community promoters to continually remind people to use chlorine every time they filled their jerry cans. As they focused on addressing these issues, adoption increased from 14 to 64 percent. They are now on the pathway to achieving 100 percent adoption.
“Funders like USAID need to stay flexible while a project scales, and we need to work hand-in-hand with our grantees as they uncover new challenges and make important pivots,” Alexis Bonnell, the Division Chief of Applied Innovation at USAID’s Global Development Lab told us. “Iteration and customer-centricity has to continue throughout the scaling process. That takes a little bit of patience, but the results are worth it.”
Continually redefine your value proposition
Understanding what your customer needs to adopt your innovation may not be enough. What about understanding their dreams and aspirations? Do their values align with the values of your inclusive business?
The social enterprise Vision Spring offers affordable glasses for BoP consumers. But they realised that their potential customers associated having eye tests and getting glasses with going to the hospital. “Health commodities” are not exciting or attractive to consumers, they realised, so they decided to “demedicalize” the experience of getting glasses. Instead, they took their clinics to places where people were earning, learning, praying and playing.
“[Getting glasses] should be convenient, fun and exciting,” Ella Gudwin, president of Vision Spring told us. “People get to read their Koran for the first time in years, or can thread their needle for the first time without asking a grandchild for help. There is wonder in that. A simple kind of magic.”
Get the right distribution model
Solar energy is cleaner, cheaper and more efficient than kerosene. So why aren’t more people in sub-Saharan Africa making the switch? It comes down to distribution, the social enterprise Solar Sister discovered – the products were not there in the locations that needed them most. So they asked: Who is the customer, and who is managing energy at the household level? The answer was the women of the household. Any successful distribution model that would increase the adoption of solar energy would have to involve them.
“We decided to bridge that gap by having one woman sell to another woman,” Katherine Lucey, Founder of Solar Sister told us. They recruited local women, gave them training and experience, and let them use the products themselves, so that they became not just sales people, but evangelists for the new technology.
“With their own experience, they could go and sell through their families, friends, neighbours and social network. By selling through that social network, that trust mechanism is already built in. You have to build trust. How do you build trust? It is a woman-to-woman-connection. It is their own social networks that are already in place. That is how we can spread this new product virally,” Lucey said.
Being a customer-centric inclusive business takes a great deal of time, but it will pay off in the long-run for businesses and customers. We must listen, iterate and be patient to ensure that we are not only meeting customers’ needs, but helping them fulfil their aspirations.
This has been proven many times over, not only in successful business models but also in development projects that invested enough time at the beginning to better understand what poor communities really need. After understanding their needs, these enterprises and projects earned communities’ trust, creating ownership among the people they serve. And trust and ownership are the core ingredients of mutual, long-term success for any organization working at the BoP.
Christian Jahn is the Executive Director of the Inclusive Business Action Network. This piece features insights from the latest inclusive business online magazine, which is out now.
Photo courtesy of Solar Sister.
- Social Enterprise