Lessons on Insane Customer Focus
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I land in Nairobi on a warm August night and need to get to my family’s house outside the city. I don’t have Kenyan money on me for a taxi, but I don’t bother looking for a place to exchange my U.S. dollars.
But with M-PESA on my phone, I have instant access to both my U.S. and my Kenyan funds (banks), and I can start transacting like a local right away without worrying about expensive international phone charges.
Pesa – means money in Swahili, M – Mobile. It’s also made Kenya one of the world leaders in mobile money usage.
Armed with only a phone and a laptop, I’m able to seamlessly run my advisor business for months from deep in the country miles away from any major cities.
With M-PESA, I’m able to buy data bundles for my Safaricom line, which allows me to get online at some amazing speeds. This is in addition to being able to buy cheap airtime that allows me to call friends and family back in the U.S.
M-PESA is Safaricom’s most innovative product and has been credited as one of the 10 most influential projects of the last 50 years.
The concept is simple – store money in a secure digital account. Then use your phone to send money to other users on the system and pay for all kinds of services.
Customer obsession culture
The following is a story about a company that’s become wildly successful by having an intense focus on consumers’ needs and behavior.
Almost every innovation they make is driven by consumer requests, choices, or behavior. This is partly explained by their well-defined and documented customer obsession strategy which guides the company’s decisions and is part of the company’s culture.
The company is willing to try out different things without focusing on profitability first.
So many lessons for us to learn about customer focus as a profession.
M-PESA by the numbers
M-PESA is now recognized as Africa’s leading fintech platform with over 51 million subscribers, 30 million of whom live in Kenya.
Kenya’s population is around 55 million which means almost all the adult population is on M-PESA.
The system processes more than 61 million transactions per day, with most of them in the range of $5 to $300.
The company (Safaricom), which started in 2000, had revenue of US$2 billion in 2021, with 39% of that from M-PESA.
It has expanded to other countries, and today more than 500,000 businesses use M-PESA, transacting over $7 billion dollars per month. It’s essentially become a C2C, C2B, B2B, and B2C operation.
There are over 600,000 M-PESA agents – instant job creation.
This alone has solved the issue of the unbanked in the country. You don’t need a bank account to be part of the economic ecosystem.
M-PESA now handles 92% of the money sent by Kenyans in the diaspora – this is about $3.3 billion.
The M-PESA ecosystem is home to over 42,000 developers in different countries in Africa, all developing mini-apps on the platform.
M-PESA is a super app that is opening more avenues for other businesses.
The best part is all you need is a Safaricom line (sim card). The type of phone you have is irrelevant.
The start of M-PESA – Focus on customer behavior and needs
M-PESA is a creation of the consumers.
The original idea that became M-PESA was for a system to manage microloans via mobile phones in rural areas for a UK development agency.
The company noted that Kenyans were using the system to share airtime or send microloan money to each other instead, especially to those in rural areas.
Safaricom could have ignored this but instead chose to focus on making this more sustainable. It dropped the microloans idea and instead re-engineered the system to focus on transmitting money from one phone to another in 2007.
It started by creating a network of agents that could pay out or receive money sent out via the network.
It located them right where consumers were – think small roadside kiosks, barbers, hairdressers, curio stores, etc. – instant brand recognition.
And the rest is history!
The system was started before smartphones became available, and so it created the service to operate via simple SMS.
It helped that banking regulators (the central bank) allowed regulation to follow innovation, letting M-PESA operate as an entity that was not considered a bank, meeting a need that banks could not fill.
New innovations based on customer needs and behavior
Since then, the company has continued to innovate based on customer feedback and needs.
A recent example – In 2018, the service team noticed via big data analytics the many transactions that were canceled due to insufficient funds. But more than 50% of them would be completed in about two days. It came up with a new overdraft product called Fuliza.
A few more innovations it has come up with based on studying how customers are using the product include:
- M-PESA savings accounts with no minimum balance, that also offers microloans;
- M-PESA GlobalPay – A VISA virtual card linked to the M-PESA wallet – allows the user to complete international transactions;
- Every type of everyday transaction:
- Retail payments
- Pay bills and tax payments to the government
- Receive or pay salaries
- Withdraw and/or deposit money into a regular bank account
- The ability to buy airtime for your phone or any other phone number
A few lessons from Safaricom on customer focus
Listen to your customers, understand how they are using your products or would like to use your service, and be willing to change to serve them.
The traditional advice business is AUM-based, but not every prospect is looking for that kind of arrangement. How many of us are willing to add other types of business models into the mix to serve clients who are asking for this type of service?
Be a listening machine
On social media, Safaricom has the reputation of being a listening company. It constantly solicits and more importantly acts on users’ feedback.
It provides many ways (around the clock), including WhatsApp for chatting with customer reps, all of whom are located in the country.
I called a couple of times, and even in peak times, I was connected to a live rep in less than three minutes. How accessible are you to your clients and prospects?
How often are we soliciting feedback from our clients, and how often are we willing to actively act on that feedback?
Speak your clients’ and prospects’ language
Safaricom speaks the language of its consumers, down to how they name the products. There are two official languages in Kenya – English, and Swahili. All product names are a mixture of this, and they are so catchy they have become a part of the culture.
We are guilty in the investment space of using big technical words that mean something to us but not much to our target client. I can speak firsthand to this, based on the foreign-born clients with whom I work.
A prospect recently said to me that she avoids financial planners because of the “big words” we use. How can we simplify the language for prospects and clients so they don’t feel like we are speaking a foreign language to them?
Safaricom has a new brand campaign – “Let’s go beyond.” The focus is on transforming lives by making the future better for everyone.
We may not get to that level, but we can make a difference for every one of our clients and prospects by meeting them where it counts.
Jane Mepham, CFP® is the founder of Elgon Financial Advisors, a registered investment advisor based in Austin, Texas. Her advisory practice is limited to providing investment and financial planning advice to foreign-born individuals. She works directly with these individuals and has flexible relationships with investment advisors serving this community who require her specialized knowledge.