We’re collectively more aware than ever that listening and responding to customers is the key to successful businesses. Or as Harvard Business Review put it in Autumn of last year, “the new source of competitive advantage is customer centricity: deeply understanding your customers’ needs and fulfilling them better than anyone else”.
But for the kinds of social enterprises that Acumen invests in, operating in some of the hardest-to-reach places in the world, it has typically been nigh on impossible to listen and respond to the voices of customers in a systematic, cost-efficient way. As a result, such customer-centricity has often remained out of reach.
The technology revolution we’ve experienced in the last 15 years is now reaching almost every corner of the developing world. Today there are more than 7 billion mobile subscribers globally, 5.5 billion of whom live in the developing world. And these numbers are growing fast. In sub-Saharan Africa alone, the number of mobile subscribers will grow from 600 million today to 930 million by 2020. Even more exciting, by 2020 nearly half of the world’s 6.1 billion smartphone users will live in the developing world.
This explosion in mobile penetration means that it is now possible for companies working to serve some of the poorest customers to connect with them in a new way.
We are turning our philosophy of listening and putting customers at the centre of our investing into practice through an approach to data collection that we call Lean Data. Lean Data takes a new spin on traditional social performance measurement by taking advantage of the proliferation of mobile, blending social and commercial data collection, as well as by using agile design principles. We’re focussed on efficient data collection that is respectful of customers’ time, and designed specifically for enterprises who are operating with a limited budget.
In the last two years, the Lean Data team has worked with close to forty different social enterprises and a sprinkling of not for profits and has gathered data from more than 25,000 low-income customers across the globe — almost exclusively through mobile phones.
The structure of these Lean Data projects is relatively simple. We work with companies to understand what customer data will help them better understand and fulfil customer wants and needs and in turn, make better business and social impact decisions.
To achieve this The Lean Data team is frequently experimenting with combinations of technologies and techniques to increase response rates, improve data quality, and in doing so help to instil cultures of customer centricity among the companies with which we partner.
For example, we recently ran twelve quick A/B tests when working with a company in South Africa to see how we could get the highest response rate using Interactive Voice Response (IVR) through EngageSpark’s platform. We managed to achieve a 59% response rate but we first had to iterate with the approach before getting this result.
Through the A/B experiments, we found that sending an SMS priming message to customers before the IVR call increased response rates by 14 percent. Additionally, recording the questions in the local vernacular versus English led to a 9 percent higher response rate. And lastly, we found that the time of day influenced response rates – calling respondents at 6:00pm vs. 1:00pm led to an increase in response rates by 8 percent.
This IVR experiment took a total of three days and we received over 900 customer responses.
We’re also getting powerful data about how our companies are improving their customers’ lives. For example, we worked with Burn Manufacturing, our clean cookstove investment in Kenya, to interview 1,000 customers through the Kenyan mobile survey platform, EchoMobile.
Burn wanted to understand how much their customers saved on charcoal after buying a new stove. Over the course of four weeks, we collected and validated data that showed that an average customer saved 60 percent on charcoal. We also gleaned other important insights on additional benefits the customers received, including time savings and improved health.
The cost to gather this data was $3,000, a tiny outlay compared to the typical $300,000 to multimillion-dollar cost of a randomized controlled trial.
We’re also working with companies to develop innovative ways to strengthen their relationships with customers through mobile. For example, where companies rely on agents in various remote locations to distribute their product, it’s often difficult to create a reliable and accurate database of customer contact details.
EthioChicken is an Acumen investee that is transforming the poultry industry in Ethiopia by introducing a higher yielding variety of chickens in the market. EthioChicken sells one-day-old chicks to agents, who grow them to 45 days and sell them forward to smallholder farmers.
EthioChicken wanted to get feedback and preferences from end-customers—farmers who eventually rear the chickens—to improve their product and service, and ultimately grow their business. But they didn’t have a sustainable way of contacting the farmers as the company’s main point of interaction is with the agents.
Working with EthioChicken, we piloted using a lottery incentive advertised through radio to build a database of EthioChicken’s end-customers, the smallholder farmers. The advertisement asked called for all “firinji chicken owners” to give a missed call to a provided number for a chance to win 5 firinji chickens. In just 10 days, we received missed calls from 1,147 phone numbers and then immediately followed up with each caller through short phone surveys to categorize the callers and determine the percentage of EthioChicken customers versus potential leads.
This proved to be a cost and time effective way to develop a database of EthioChicken customers and potential customers.
We believe that by building these types of data collection methods and tools into their processes, social enterprises can become smarter and more responsive in serving their customers. Ultimately, this allows them to create improved, more impactful products and services for the poor.
The spread of technology gives us the opportunity to listen to tens of thousands of voices. Lean Data leverages this interconnectedness so that, together, we can amplify voices and build solutions that solve some of the biggest pain points for low-income customers.
This blog is a part of the February 2017 series on Customer intelligence revolutionising business at the Base of the Pyramid in partnership with Acumen Lean Data. Access the series for interviews with social enterprises Dr.Consulta and D.light, as well as blogs from Business Call to Action, Social Value International and many more.