In our previous article we talked about the white space for brands serving low income communities. This time I thought I would reflect on what happens when a brand commits itself to serving this market. How can a brand generate customer delight in these customer segments? Much has been studied, written and done about consumer behavior, especially in relation to the ‘sought after’ urban, middle to high income consumer with the buying power to fuel many billion-dollar unicorns. But the low-income underserved and their needs rarely garner commensurate thought.
Contrary to popular wisdom, this ‘seeking’ consumer is discerning – and is able and willing to pay. While she seeks essential health, educational, agricultural and financial services, she struggles to find quality offerings priced affordably. She is not sought after by brands, neither is she spoilt for choice among various options.
For years, she has willingly paid for a mediocre slate of choices, without any predictable quality of delivery. Let us take two instances to understand the implications of this:
For a low income mother in rural India, seeking medical attention for her injured child – often complicated due to lack of good quality medical care in her vicinity – the expenditure on second and third time care, travel to and a prolonged stay at a city, loss of income due to travel and the cost of borrowing for that treatment, can well be the consequences. These costs are in addition to the intangibles of impact on the child and the household. The fee charged by an emergency room doctor, were that service made available to her at the outset, would be a fraction of this sum.
For a smallholder farmer looking for agricultural inputs while sowing his crop, a wrong buying decision can snowball through a combination of the financing burden to procure the input, the quality of the input itself, and the low harvest potential of such input.
In both examples, the multiplier effect of a poor purchase decision, due to the lack of viable and effective options, significantly impacts the household’s income, expenses and consequently, cash flows.
For a brand looking to serve this customer, there are other factors to take into account as well – unfortunately, the reality of prior experiences offers a low bar and has resulted in years of broken trust. Also, this customer is not used to investing in ‘new’ long term relationships – and often needs to move away from existing ones to adapt (something that all of us struggle with). While existing, informal solutions may be inefficient, local communities and providers have found ways to deliver these irrespective of the realities of the regulated world.
So how then does one think of ‘customer delight’ for an underserved consumer looking to fulfill the basic necessities of life? The typically ‘sought after’ customer is focused on pricing, comparison of choices and customization of services. However, the ‘seeking’ underserved customer is focused on clarity, transparency, predictability and assurance (CTPA):
Clarity and transparency of the solution and price point : Taking the example of the rural low income mother, if she goes to a Glocal Healthcare clinic which has recently come to her area, bringing affordable healthcare with its tech enabled offering, she knows clearly what solution she is paying for and at what price – less than 5 USD for the entire spectrum of offering from consultation to testing to medication. But here we must point out that the entry point in terms of pricing a solution needs to be made with utmost thought and care. While there may be the temptation to set a low price point to delight the customer, unsustainable price points threaten to destroy viable service providers serving the customer, while not building a sustainable alternative option. Also, the customer in this segment relates very low pricing with bad quality. Glocal ensures that the price charged to the customer generates profit margins, for the company to make the offering long term and sustainable for the customer.
Predictability and assurance of outcomes: Building on this entry point through predictability of future engagement, delivery and assurance of outcomes is the next challenge. This requires the enterprise to build its long-term brand infrastructure with repeat delivery of propositions that appeal to the customers’ wallet share. Continuing with the smallholder farmer example, if the farmer was served by Samunnati, the company would engage with him for the entire continuum of the agri lifecycle, to not only provide advisory services to avoid the above mentioned wrong buying decision, but also boost the farmer’s income generation capabilities by providing financing solutions and enabling market linkages.
Customer delight for this segment therefore boils down to delivering solutions with CTPA – at scale.
As mentioned in the prequel to this article, thoughtfulness in designing the delivery and ensuring that it meets the purchasing power of the segment is the genesis of the moment of truth for the customer, who has experienced several years of being underserved. Once a connection is established, if the brand can keep pace and evolve with the dynamics of the customer’s environment, it will be rewarded with long term relevance and brand loyalty that extends beyond the current generation.
In short, the focus needs to be on long term solution-driven partnerships with the customer, and being core to triggering and building on a ‘customer prosperity flywheel’.