Marketing to the BoP
For a long time, bottom of the pyramid customers, herein generally referred to as the lowest earners in a particular country (often living on less than $2 per day), were generally ignored by the private (entrepreneurial) sector and tended to be supported by the NGO’s for basic needs. This was largely attributed to a wide array of challenges such as lack of infrastructure, low customer purchasing power, belief that uplifting the poor was a domain specific to the government & NGOs and a cultural predilection for the urban areas.
Over the years, awareness of opportunities in BoP markets has increased especially following C.K. Prahad’s book The Fortune at the Bottom of the Pyramid in 2004 which has continuously brought a change of mindset underlined by his famous quote: “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value conscious consumers, a whole new world of opportunity will open up.”
With the shroud of this multi-billion dollar market opportunity removed, and the penetration of technology, the narrative and focus has changed with more companies looking into this segment through the profit lense.
However, the idea of merging profit and purpose comes with its own fair of challenges. One major challenge that has rocked the boat of entrepreneurs’ plying their trade in the BoP sector has been spreading awareness, and driving adoption in areas where internet penetration & customer education is low. In these kinds of environments, marketers don’t have the luxury of access to endless data and though marketing channels do exist, they don’t do just quite do the job.
Given the constraints, succeeding in the BoP market segment requires great amounts of resourcefulness, and creativity to reach audiences especially in the rural areas. Often marketers need to look beyond communicating their value proposition in roadshows and radio advertisements to something that triggers a wide scale behavioural change.
During the #WhatsGood BoP Marketing event, a key part of the conversation involved discussing marketing strategies for scale, impact and sustainability with a focus on behavioural change.
Here are bit sized insights from the panelists:
1. Know your customers inside out: their needs, wants and their unrealized wants.
Find out what really influences your customers purchasing decisions and analyze the different motivations across the logical/rational and emotional sphere. This not only eliminates top-down innovation problems but also helps the company uncover its’ customers perceptions, behaviours and worldviews.
This should be multi-faceted exercise involving low tech and/or off-line strategies to get data that informs the marketing strategies. Examples include: listening to your customers stories, observing them while in their element, conducting surveys or even hiring anthropology marketers to conduct a widespread research on customers across various regions.
According to Stephen Njenga, Sales & Distribution Expert at BoP Innovation Center, ‘BoP customers will only invest their little money on solutions that makes sense to them and solves their immediate pain point like direct cost saving.’
‘Common’ logic that is not so common:
“You would think if you market a toilet as good for your health then that will motivate people to change their behaviour but it doesn’t work. Knowledge alone, and particularly knowledge about the long term outcome isn’t going to change people’s behaviour in the moment. Instead we realized how important it was to create an aspirational brand and then that could drive people’s day to day real life decisions.” Lindsay Stradley- Co-Founder, Sanergy
Creating an aspirational brand meant branding their toilets “Fresh Life” as opposed to Sanergy accompanied by the slogan “Be clean. Be fresh. Be you.” This attracts customers and gives them a feeling they are living a better life by using the toilets.
2. Build trust
In marketing there are two main objectives, creating awareness and building trust.- Claire Mongeau, CEO, M-Shule.
Trust is a pre-requisite for the buy-in process that is developed over time through various mechanisms such as market presence, proof of functionality, early customer network effects, consistency among other reasons.
Traditionally, the BoP segment has seen a lot of mistrust between ‘purpose and profit’ businesses and the BoP customers. This stems from a multitude of reasons mainly experienced through the episodic exploitation by pseudo-NGOs and businesses.
“Recognize that BoP customers have been subjected to repetitive cycles of exploitation by numerous companies. Therefore trust won’t come easy.” Benjamin Njenga, Co-Founder, Apollo Agriculture.
Best practices:
-Keep your end of the bargain.
-Enlist the locals as sales people and ambassadors.
-Have a physical touch point after an ad (crucial for building initial trust).
-Be at the top of your customer’s minds — all the time for good reasons.
3. Know who’s boss. Know who’s pivotal to your mission. Partner.
According to the BoP Innovation Center, a BoP partnership is a flexible multi-sector collaboration, with a central role for organizations or individuals working for or with the BoP, in which risks and responsibilities, resources and competencies are shared in order to co-create collective impact at the Base of the Pyramid.
A partnership is like a marriage. Don’t just go for the money or their logo. Think about what you need and if it is a good fit. Irene Hu, Associate Partner, Open Capital Advisors.
Best Practice:
- Strive for partnerships that have significant value in reducing costs, improving customer acquisition and retention.
By and large, the BoP markets represents the world’s next big growth segment and offers exciting opportunities to build profitable and purposeful businesses that can change lives to the tune of billions. However, while it pays to be an early mover, this opportunity has a corollary to the challenge of aggregating demand and turning the communities into network consumers. Ultimately, success will be based on the Metcalfe’s Law where the usefulness of a network is assessed by the square number of (paying) users.
*The #WhatsGood series focuses on deep-learning and best practices in a particular sector through thought-provoking panel discussions as well as deep learning techniques such as case studies and curated in-depth presentations.*
