Why Mobile Engagement is Essential for Financial Service Providers in Africa
KPMG’s Kenya Insurance Survey Report notes that “only 1 in 10 of organisations are interested in understanding their customers…. It is important that organisations prioritise on understanding who their customers are, as this will help them manage their existing customers and attract new customers who seek a partner who not only sells an array of products but understand them personally. More worryingly, only 2 percent of organisations consider data as key in customer care management. Data is the future of any insurer and needs to be used to gain advantage.”
This month, our CEO Boris Maguire sat down with colleagues from Outsized to discuss mobile engagement. Outsized helps financial service providers match with vetted and rated consultants in emerging and developing markets. As part of its “5 Outsized Questions About” series, Outsized asked Boris how banks and insurance companies in Africa can obtain strategic advantages and growth through continuous mobile customer engagement
What does mobile engagement mean and why should banks and insurers take notice?
Mobile engagement is about informing, influencing, and understanding the people that your organisation cares most about. Banks and insurance companies in East Africa are actively trying to inform and influence their customers through marketing, but they face several problems:
- Marketing is based on broad market research at best and assumption at worst. It is rarely based on nuanced, individualised customer understanding.
- Marketing is traditionally conducted through broad, “above-the-line” channels, such as print, radio, television and social media. These channels are expensive and imprecise (making it hard to measure and compare ROI), and impersonal and one-sided (preventing sustained conversations that build relationships and loyalty).
- Even when marketing successfully drives sales, businesses struggle to efficiently consolidate and respond to feedback, which is essential for understanding customers and improving products and services.
Mobile engagement makes it easier to understand customers by enabling data collection at a granular level. Through Echo’s technology and services, we enable businesses to truly engage and listen to their customers through personalised, automated conversations over SMS and voice; the only technologies accessible to more than 75% of East Africans.
These conversations produce accessible and actionable data in real time that can be used to drive decisions. They also enable targeted and personalised marketing campaigns that can be verifiably delivered directly into customers’ hands.
If you were a large incumbent bank or insurer, what would be the top use cases for you to use mobile engagement?
To remain competitive, financial service providers need quick and cost-effective ways to access information which mobile channels offer. Tracking customer satisfaction, for example, can be expensive if reliant on external service providers like call centers or market research firms.
However, banks and insurers can easily and internally manage affordable, off-the-shelf web platforms like Echo that enable real-time mobile engagement. Echo makes customer engagement mobile and automated such that feedback can be collected with a few mouse clicks. For example, banks and insurers can automate regular Net Promoter Score (NPS) surveys with different customers segments or following specific customer interactions.
Mobile engagement also enables banks and insurers to provide targeted information to customers based on their lifestyle and preferences. Linking customer relationship management (CRM) systems with a mobile engagement platform means organizations can deliver personalised messages to customers according to their profile.
Through Echo, you can manage customer contact groups and individual profiles that store whatever key data points you care about for each customer, whether their location, demographics, product preferences, or any data collected through previous engagements. This allows you to increasingly personalise, target, and automate intelligent engagements with your customers. As the relevance and personalisation of your information services grow, so does your customer loyalty — direct, personal, and targeted engagement shows that you care.
Lastly, mobile engagement tools enable businesses to provide toll-free helplines and customer support. If you give your customers round-the-clock access to toll-free voice or SMS lines, you empower them to submit enquiries and issues they’re having with your products and services which enables your team to respond efficiently. Making the service toll-free is particularly valuable for micro-finance institutions, which often target lower-income populations.
How does the current penetration of feature and smartphones impact how you use mobile engagement?
Access to smartphones and internet remain extremely low across much of sub-Saharan Africa, where less than 21% of the population has mobile internet access. These rates are substantially lower in rural areas and amongst women, who, according to GSMA, are 26% less likely to use mobile internet than men and 18% less likely even among those with mobile phones.
The market for internet-based messaging tools is also extremely segmented. Amongst the minority of people with smartphones, some are on WhatsApp, others are on Facebook Messenger, others Viber and Telegram, whilst others stick to social media. These tools also can’t talk to each other, so where do you start? How do you know where to find people?
And lastly, even amongst the minority who do have access to mobile internet, fewer still are actually using smart features, either because mobile data is too expensive or because they’re simply not familiar with mobile apps. Yet almost everyone uses SMS and voice calls, the only technology accessible to every single mobile phone owner, the world over. Feature phones still account for most of continent’s mobile phone market, and year on year shipments of feature phones to the continent have increased as smartphone imports are declining.
In short, smartphones and internet-enabled tools are not always an efficient or effective way to engage customers at scale in sub-Saharan Africa.
Are there successful examples of clients using mobile engagement in product development projects or innovation initiatives?
Yes! Many of our clients use mobile engagement to support product and service innovations. Mobile engagement generates data that allows organizations to make better decisions when developing new products, and it can serve as a means for new, innovative, and more efficient ways to deliver services.
One asset-based agricultural MFI in Kenya, for instance, wanted to offer a new financing product to farmers — water tanks and irrigation equipment on credit. They identified a wholesale water tank vendor that offered a wide range of tank sizes at different price points.
Prior to beginning price negotiations, the MFI used the Echo platform to engage its clients through SMS and assess water tank needs and preferences. The survey revealed a strong preference for one specific tank size and design.
During negotiations, the MFI was able to use this data, obtained remotely and at extremely low cost, to obtain a heavy discount for the preferred tank size, while accepting higher rates on tanks they knew would be less popular. This then enabled them to reduce their costs and provide a superior product at a lower price.
Another asset-based financing example comes from the clean energy sector in Uganda. We serve a number of pay-as-you-go (PAYG) home solar providers, one of which uses TV and radio campaigns to market their product and generate leads. Prior to using mobile engagement, these campaigns called on interested customers to contact a call center. This required the prospective customers to pay for the call, while managing call center personnel created huge costs to the company.
The solar company has since innovated on that process and replaced the call center with Echo’s platform. Radio and TV ads now invite customers to send a keyword to an SMS shortcode. The free SMS triggers SMS questions, and when a prospective customers reports her location, the platform immediately generates an email to the solar company’s nearest branch for follow up. This automated mobile screening process localizes and optimises lead generation, saves money, and demonstrates a commitment to personalized, responsive service.
What is the biggest mistake you see companies make in terms of mobile engagement? (other than not doing enough of it!)
If mobile technology is a science, engagement is an art. Companies need to consider both, yet many get distracted by the “mobile” component at the expense of the “engagement.”
To effectively inform, influence, and understand people requires continuous two-way communication. However, many companies still focus only on one dimension, either by seeking only to understand (asking questions without providing feedback) or only to inform, (focusing on pushing information without listening and asking for input). This can actually lead to customer disengagement, and cause organisations to conclude that the engagement technology doesn’t work, rather than to reconsider their engagement strategy and content.
Imagine if you were in a conversation with someone who only asked you questions, never letting you reciprocate? Or imagine someone talking at you without letting you participate in the conversation? You’d tune out pretty quickly! We know this intuitively when we’re having in-person conversations, or even texting with friends, but organisations forget about the human on the other end of the line when conducting mobile engagement at scale.
Both in how we design our platform and advise our clients on mobile engagement strategies, Echo applies a Human-Centered Design (HCD) approach. We advise organizations to engage customers on what they actually want, not what the company thinks they need, and to continuously adjust their engagement strategy to meet emerging customer understanding.
Organizations should experiment and build on what they learn about their customers’ preferences and behaviours. When are they most active and engaged? What content do they request or respond well to? What are their pain points? Which of these can engagement alleviate? See what works and what doesn’t, remain flexible to trying new approaches, and keep innovating — just as when developing products and services!
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About Outsized
The original version of this post was titled “5 Outsized questions about mobile engagement in financial services” and appeared on Outsized’s LinkedIn page.
Outsized offers banks, insurers, fintechs, financial inclusion and investor clients access to a pool of vetted, high-quality consultancies, agencies and freelancers. The senior staff possesses extensive sector and consulting backgrounds, enabling them to help scope out and structure your projects. Outsized’s expertise and machine learning matching technology, coupled with high-quality consulting partners, maximises ROI on client consulting spend. Outsized matches your project requirements with proven skills, not the brand of the provider.
