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Choosing, changing or combining customer segments

Business strategies before and during Covid-19

New opportunities arise amid global uncertainty: Inclusive business entrepreneurs are often familiar with risk and quick to adapt to new situations. They are in some cases able to use their established networks and skills to respond to crisis situations such as the Covid-19 pandemic.

Networks and partnerships expand companies’ reach: The entrepreneurs we consulted used extensive networks on the ground to market their products and follow up with customers.

A holistic approach provides a competitive advantage: Integrating technical support and customer service capabilities allows companies to provide a holistic approach to their clients, even in hard-to-reach, underserved areas. This can be an important value proposition.

Sustainability is a key concern for inclusive businesses; this is cited as a reason to focus on the poor as customers rather than beneficiaries. Being for-profit rather than non-profit also has advantages when it comes to longer time horizons and a mission-driven approach that doesn’t rely on short-term funding.

Entrepreneurs may have to periodically re-assess their approach and keep in mind their own biases and the differing expectations of various customer segments. Setting expectations among different groups is key to providing shared value.

Photo by Devi Puspita Yahya on Unsplash

Photo by Devi Puspita Yahya on Unsplash

Introduction

During these uncertain times, times of great risk to businesses, it will become more important than ever to serve customers and clients at the base of the pyramid in innovative and holistic ways. By speaking with entrepreneurs and experts from around the world, in this CLUED-iN issue we have compiled insights into a range of important themes for developing targeted customer approaches in the inclusive business field, from partnerships to adaptability and sustainability. However, this issue was largely developed before the coronavirus pandemic infected hundreds of thousands of people around the world and changed business operations rapidly, requiring social entrepreneurs to adapt quickly.

Many businesses we spoke with, such as the Indian solar company ONergy, have found their supply chains deeply disrupted. “All the stakeholders will have to rethink their strategies, so we are,” said Antara Dey Bhowmik of ONergy as she shared the short-term and long-term impacts of the pandemic.

Emiliano Mroue, the CEO of WARC Group, a Sierra Leone based company, provides counsel for entrepreneurs based on lessons he learned from the Ebola outbreak. His advice is to focus on managing liquidity and adopt a “resilience mentality” to survive and make your business model more resilient after the crisis. He argues that this is the time to focus on the “why” of your mission and not take too many risks. “For now, stay put, survive. And if you do, there will be enough time to pivot, to build new skills and especially to stress-test, to really stress-test your company’s ability to take a hit,” he writes in his blog.

image © The WARC Group

During Ebola harvesting had to be done manually, constraining the farmers' ability to increase their production © The WARC Group

While the pandemic has initially hit wealthier countries harder, the impact on the developing world will depend on the preparedness of individual countries. But in any case, those living at the base of the pyramid in mega-cities like Jakarta or New Delhi will be highly vulnerable. So how can businesses respond? Inclusive business entrepreneurs are often familiar with risk and quick to adapt to new situations. They can in some cases use their strengths and relationships to respond to crisis situations such as the Covid-19 pandemic. For example, the autonomous drone delivery company Zipline is responding by expanding the transport of critical medical supplies, providing visibility into medical product demand, and ensuring that personal protective equipment (PPE) is directed to where it is most needed. As Brittany Hume Charm shares in her blog, Zipline is working directly with governments in Ghana and Rwanda in their efforts to plan for and respond to Covid-19: 

Brittany Hume Charm

“We’re working around the clock to ensure that health facilities we serve maintain reliable access to the supplies and medicines they need to address Covid- and non-Covid-related healthcare needs.” - Brittany Hume Charm, Zipline

New opportunities amid global uncertainty

Technology that provides critical assistance to farmers without risky face-to-face interactions is particularly valuable at this time of rising food insecurity. For example, the Swedish company Ignitia provides weather forecasts for smallholder farmers in Africa that are delivered by text message (SMS). “With predicted food shortages and lack of labour in agriculture, our offer of providing decision support to farmers becomes even more relevant in times of Covid-19 spread. We communicate daily with 1.3 million farmers subscribing to our forecasts, without boots on the ground in each village,“ Liisa Smits, the founder of Ignitia tells us.

There are also new opportunities that will arise for companies to fill the gaps. The Covid Action Platform initiated by the World Economic Forum supports businesses who are becoming engaged in the response. These responses fall mainly into three categories: supply chain continuity, innovation in medical countermeasures, and protecting health care employees. New funds such as the Covid-19 Solidarity Response Fund can provide the financial backing to support entrepreneurs. There are currently many resources emerging, which we have compiled in this list.

“The challenge when entering the markets and approaching new customers is that the process to a high extent can be characterised by uncertainty; success depends on your ability to navigate in a constantly changing process that is characterised by a learning by doing process,” write Jacob Ravn and Anders Anker-Ladefoged of access2innovation, who share their organization’s lessons learned about choosing the correct customers for your business idea in this edition of the magazine.

Photo by Martin Sanchez on Unsplash

Check out selected resources, best practices, tools and funding opportunities for companies that were launched globally in consequence of the Coronoa pandemic. 

Networks and partnerships expand companies’ reach

The entrepreneurs we consulted used extensive networks on the ground to market their products and follow up with customers. ONergy works in remote areas in India and uses a network of partners, who consist of rural entrepreneurs, NGOs, MFIs, or product dealers. They are recruited locally for sales and distribution. LabourNet relies heavily on a field force to identify other businesses to partner with using the B2B model. Ignitia uses on the ground teams to test their products and follow up with farmers to make sure they are providing a targeted, effective product.

It can also be critical to invest in partnerships to understand market demands, test solutions or scale products. 

“Working in partnerships with NGOs, researchers, government agencies and other companies have proven to be a valuable strategy for both small and larger corporations when mitigating the outlined uncertainty and opening up new opportunities.” – Jacob Ravn and Anders Anker-Ladefoged, access2innovation

Mosabi is a company that empowers underserved populations in emerging markets with the "MBA for the rising billions" – phone-based, business-focused e-learning to help citizens increase their income and link to digital financial services.

Chris Czerwonka of Mosabi says partnerships are the first step for their business model:

When we look to enter markets, we don't do so without first having an anchor institutional partner – either a distribution partner or a financial service provider.”

He adds: “Our scalable go-to-market strategy is to leverage the reach of our distribution partners. By sustaining meaningful conversations with both our B2B customer segments and the populations that comprise our potential users, we can have a more powerful marketing strategy on several fronts.”

Photo by Pawel Czwerwinski on Unsplash
Partnerships are also critical to reducing risk and reaching customers in need.

These on the ground networks can also be valuable in reaching customers in times of crisis. For example, Zipline has trained young professionals in Rwanda and Ghana to work as fulfillment and flight operators for autonomous drone deliveries, receiving and launching orders for medical products to help their communities.

Partnerships are key. © ONergy

It can be critical to invest in partnerships to understand market demands, test solutions or scale products.

Focus on a holistic approach

In many cases, networks allow entrepreneurs to provide a holistic approach to serving their clients, even in hard-to-reach, underserved areas. This can be an important value proposition.

 “It is of great competitive advantage to be able to supply B2B customers with a holistic and integrated solution instead of only selling separate parts,” argues Jacob Ravn of access2innovation.

ONergy has developed a holistic approach including an integrated system and technical support to reduce risk. As Antara Dey Bhowmik of ONergy clarifies, they offer a full-service product including everything from financing to maintenance.

image © ONergy
For inclusive business, sustainability is key

Being for-profit rather than non-profit has advantages when it comes to longer time horizons and a mission-driven approach that doesn’t rely on short-term funding. As the founder of LabourNet, Gayathri Vasudevan states: I think the difference between a nonprofit and a for-profit is the fact that we're not project-led. We're more mission-led. Often work is determined by the grant amount and the grant period of time. We don't have that limitation and therefore we can continue to work on what we are working and that I think is the biggest distinguishing factor.

Liisa Smits echoes this sentiment. “We are trying to work around the idea of having project defined results, where you come in, you make an impact, but then you withdraw from the country. We want to see a long term sustainability in the work we are doing.”

Sustainability is a key concern for inclusive businesses; this is cited as a reason to focus on the poor as customers rather than beneficiaries.

When addressing those living at the base of the pyramid, many organizations and companies would classify their clients as beneficiaries. However, entrepreneurs we spoke with argue that it is important to view the poor as customers, not beneficiaries, for the sake of sustainability. For example, LabourNet in India is looking at giving different types of vocational training a cost value, whereas training is often viewed as a corporate social responsibility activity. Ignitia’s Liisa Smits says this approach is crucial for sustainability, as no third party is needed when you can sell directly to customers. Also, people will only buy things they feel they need when they have limited resources.

Liisa Smits

“People that live in extreme poverty are very sensitive towards where they put their money. So, if there is a willingness to pay for our product, we know for sure that there must be an ROI in having it, as well.” – Liisa Smits, Ignitia

Overcoming challenges, differing expectations and biases

Serving multiple customers is challenging because of differing expectations. You can set expectations among different groups to provide shared value.

“You must be very, very clear in the value that you provide to a B2B customer,” Gayathri Vasudevan of LabourNet shared with us, citing a high sensitivity to lack of transparency of value and prices.

Entrepreneurs may have to continuously assess their approach to various customers and keep in mind their own biases. Liisa Smits describes the moment she realised that we all have unknown cultural biases; her company had planned to use a “sun” symbol for forecasts and then discovered that farmers in Africa determined it resembled a spider. “Symbols are not intuitive,” she says. Instead, they decided to use simple phrases in weather forecasts. As access2innovation advises, “Our experience is that is takes a while to realise that you as an entrepreneur are so biased by your own initial business concept, idea of technology, professional training and cultural heritage that if not managed these biases may easily misguide you when it comes to grasping the opportunities at hand.”

In the process of developing their business ideas, inclusive business entrepreneurs may have to re-think their initial ideas or lean on partners with wide networks, while also underlining what they can bring to B2B relationships. All of these pieces of the puzzle join together to form the whole business approach to reaching customers. During this time of the coronavirus pandemic, as risks become more profound, these elements become increasingly critical.

While our editorial team was working on this issue of the magazine, we also re-evaluated our approach and adapted the topic to address the uncertainty that arose amid the current global pandemic. Read on to learn how entrepreneurs around the world are reaching out to their customers while adapting to current challenges and navigating uncertain times.

Photo by Drew Beamer on Unsplash

Photo by Drew Beamer on Unsplash

Alexandra Harris

Alexandra Harris is a writer, editor and communications specialist with a focus on sustainable private sector development. She previously worked for the International Finance Corporation and the Asia Foundation.

Blog post

How to choose the best customers for your business idea

The Sustainable Development Goals (SDGs) are a call for action and new approaches if we are to meet significant global challenges.

Jacob Ravn
Table of contents

graphic summary

GRAPHIC SUMMARY

A visual summary of the most important learnings when it comes to choosing the right customer segment for your business, with a special focus on the effect of the current Covid-19 pandemic for inclusive business models. Learn more about these aspects…

editorial

The easiest decision to get wrong at the start? Which market segment is for you?

In her editorial, Caroline Ashley explains the importance of choosing the right market segment for inclusive businesses. She delves into the ways in which the Covid-19 pandemic has disrupted business models worldwide, concluding that for many inclusive businesses, this may be a time to reconsider which market segment is priority.

Caroline Ashley

featured story

Navigating uncertainty to serve vulnerable customers

In this CLUED-iN issue we have compiled insights into a range of themes identified as important to developing targeted customer approaches in the inclusive business field, from partnerships to adaptability and sustainability. During these uncertain times, it will become more important than ever to serve customers and clients at the base of the pyramid in innovative and holistic ways.

Alexandra Harris

How to choose the best customers for your business idea

The Sustainable Development Goals (SDGs) are a call for action and new approaches if we are to meet significant global challenges.

ONergy Solar– Pioneering affordable solar energy in India through an innovative distribution and service network

In this interview, Antara Dey Bhowmik explains how the Indian solar company Onergy reaches both rural and urban customers through a strong distribution network combined with end-to-end service support.

LabourNet – Making a people-centred business profitable

LabourNet is an Indian social enterprise that focuses on formalising informal labour. In this interview, founder Gayathri Vasuvedan explains how the right pricing structure helped LabourNet to build a profitable and people focused business.

Ignitia – Serving the smallholder customer with targeted weather forecasts

Ignitia is a Swedish tropical weather forecasting company that provides small-scale farmers in Ghana, Mali and Nigeria with targeted and reliable weather forecasts to reduce risk and loss. In this interview, Liisa Smits, the founder and CEO of Ignitia, reminds us of the importance of not losing a focus on customer needs while taking into account cultural differences.

How Africa Is Using Medical Drone Delivery to Combat COVID-19

The drone delivery company Zipline is specialised in helping national health systems to react effectively to medical emergencies in remote communities. During the Covid-19 pandemic their services are critical and are helping to prevent system-wide shortages of medical products.

How Ebola taught me a few lessons

For Emiliano Mroue, the Covid-19 pandemic is not the first crisis he has led his company through. In this blog he shares his personal experiences from the Ebola crisis and how to apply these lessons to the current situation with Covid-19.

In Your Words

We wanted to get down to the practicalities of handling customer relations. Therefore we asked those who are running successful social enterprises what tools they use to manage their B2B and B2C customer relationships and why. Here’s what they shared with us: