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Even digital startups need to build offline communities. Here’s a strategy


Even digital startups need to build offline communities. Here’s a strategy

In 2016, Olumide Ogunlana co-founder of PrepClass (a company that connects learners to tutors in a digital marketplace) published an article “The Hustle is Actually Offline.”

In it he narrated his team’s experience in finding and retaining customers and how they have had to push the marketing offline to grow their business.

Let’s consider that:

  1. Over 1.5 million applicants sit for tertiary institution entrance exams every year,
  2. Many of the applicants seek to improve their knowledge, and
  3. They use the internet actively.

So we can assume there is a market. How hard, then, can it be to link students to teachers in a country of 180 million people?

Let’s inspect it together.

The question isn’t about teachers or students, it’s really about a business model in operation. For instance, I can ask the same question of e-commerce companies: how hard can it be to link buyers to sellers in a country of 180 million people?

To give context to that question, let’s zoom in on an industry and try to understand what we are really asking? As uninsured loan companies like Paylater, CreditDirect, and RenMoney spring up daily, it should be a good case industry. So let me ask this question in their context, “in a country described as the poverty capital of the world, how hard can it be to find people in need of money and link them to creditors?” In other words, why are there not enough people taking loans? What is the edge Paylater (now Carbon) has over all it’s direct competitors?

This credit-facilitating industry is peculiar because for it to remain in business they need to find large number of people who are going to borrow money, and pay back as at when due. And they need to repeat this cycle en-masse for the business to gain marginal profitability.

What Paylater has done excellently is to recognize the importance of community around the product, as can be seen with their group on Facebook, Twitter, and through the newsletter. They are actively engaging with customers who in turn help advertise through word of mouth.

If we claim that we have the population, who are willing and able to pay for a service, why can’t businesses reach them?

This article attempts to provide solution to this question drawing from successful strategies that ventures have taken to market. One such venture is the infamous MMM, that left thousands of Nigerians crying in early 2017, and similar products like Kedi Health Care (KHC).

In less a year, MMM reached over a million critical customer base who actively campaigned for the scheme. Similar hype is following KHC, as it is common to see family and community members trying to convert one to buy into the product. For example, a lady on a my street has been relentlessly inviting me to attend a KHC session.

When you study these products, you realise that members see themselves as an extension of the company. Whatever benefits they are to get from the company is tied directly to what they bring in.

One thing that stands out in Olumide’s article and can be linked to this phenomenon is the fact that “labour is really cheap, you can get away with an offline sales team that earns nothing but sales commissions.” So when you convert a customer, the company gets the bonus of converting a marketer.

It all boils down to growing an active recurrent customer base with an army of poorly (sometime unpaid) workers. This is a marketing tactics that many companies have tried, including IrokoTv. Kudi (formerly a chatbot that allows one to transfer money seamlessly) has pivoted to using this strategy too.

In a recent study of the Nigerian market size, we learn that acquiring customers offline is expensive (see image below). After spending huge sums to acquire these customers, there is no guarantee that they will remain loyal to the brand, users are known to easily port to the next competitor willing to pay marginally more (as seen in cases of Uber drivers also having Taxify accounts, and sellers on Jumia also transacting on Konga).

Image taken from by Rufai Mustapha

A strategy to build an active offline community around tech products

The constraints of this strategy is to reduce the cost of acquiring users offline while growing the reach of the consumer base. Note that the strategy can adapt to many tech products, one just has to see the parallels as industry differs.

To buttress the points let’s create a fictitious company called Bradu – a mobile money product.

What is Bradu?Think of Bradu as a mobile wallet just like Mpesa.

When a bus conductor shouts “Enter with your change ooh!”, the natural reaction of the commuter should be “I have Bradu, I am covered.”

This reaction is only possible because the conductor is a Bradu agent and he will collect Bradu in exchange for cash.

The Aim: We want to build the Bradu Culture, where people keep their money in Bradu and use it to transact on a daily basis.

How: The strategy involves teaching people in groups and setting them free to evangelise Bradu. It is a word-of-mouth marketing strategy with incentive.

The personas we are looking for in any cluster is the target merchant (TM); the person offering the service or commodity. This persona will pay tax and people will pay to him.

The cycle is outlined below:

  1. We find a cluster/community. Examples of clusters are schools, markets, sporting clubs, bus-stops, government premises, etc.
  2. We study how they relate with money and how money is moved among them. In all communities there is a tax collector (TC). We must find the TC. They are the enforcers that will let the TM open account.
  3. Find someone in that community to become local champion (LC), preferably a community leader who is also a merchant. So we have an LC that is a TC and on the side of the law and an LC that is a TM and on the side of the people.
  4. We give the community something. This is the incentive we need to make use of Bradu. Then we groom them with the Bradu Culture. This involves the local champion working with the Bradu Team to deploy the strategy that works for that community.
  5. Introduce a weekly Bradu Day. This is what we want.
  6. Keep the circle going for as long as possible. One Bradu Day will gradually become two. Eventually, your product will spread like wildfire across the nation with no additional marketing cost.

What is Bradu Day?

About 12 years ago, in the first tenure of Babatunde Raji Fashola as Governor of Lagos State, the administration introduced a new program; every Wednesday was set aside for extra-curricular activities and students were expected to choose a club. One of such was the Climate Change Club. Till date that society is still standing and students still actively participate in activities.

The Idea

Let’s set aside a day for each community and say no cash will be allowed on its premises. The TC will collect all dues through Bradu, all payments to TM will be through Bradu. It is Bradu Day afterall.

Imagine a day every week where all merchants in a market, all bus conductors plying an area,  all students in a school, will only accept Bradu. Pick a cluster and give them Bradu Day.

Executing the strategy – selective case study

This is what we want to do, but how it is deployed to communities matter. We have to understand these communities and clone the idea to suit them.

Below are a few communities I have thought of and how to approach them based on their biases. In essence it is a give and take trade.

  • Bus-stops ( public transport in Lagos )

The Bottleneck: Getting drivers to accept Bradu from commuters.

The Solution: All bus trips are taxed. The drivers pay a charge to the chairman. We can help the chairman reduce fraud of remittance, people taking out of the charges, by collecting the taxes through Bradu. This means all drivers must have Bradu account and they can receive from commuters to pay chairman.

Goal: All means of transportation in the city, including Uber, etc., will start using Bradu.

Question: If Bradu Day is successful in bus-stops across Lagos, how many people in Lagos won’t be using Bradu?

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