« Enter China | Main | Power of the People »

July 13, 2007

Know Thy Customer

We were about half way through a truly scintillating discussion on Africa at the Lisbon deep dive, vigorously debating the pros and cons of microfinance, when Bill Carney, a serial entrepreneur and professor at the Instituto de Empresa in Madrid, abruptly changed the course of the conversation.

Lisbon_deep_dive_001_4 “Everyone seems to think microfinance is a good idea,” said Carney, shown here. “But nobody seems to know the customer very well. There is an ignorance of the customer base in Africa. We’re just not doing our marketing homework. We’ve got MBAs and PhDs studying this stuff and all they can do is throw money over the wall.  Where’s the market segmentation? Where is the customer benefit and value proposition that we would be talking about in any other market?”

And with that simple, hitherto unexplored sentiment, the conversation swung around and marched down a new, more productive path. This was an incredibly dynamic group, even by GIO standards, rife with intellectual firepower, and eager to turn words into actions. Among the group were representatives from Attijariwafa Bank in Morocco, NEPAD, The James Martin 21st Century School, Computer Frontiers Inc., The Royal Academy of Engineering, and the Ugandan parliament. There must have been some real chemistry in the room, because before our eyes, during breaks, during lunch, collaborative projects were being hatched.

But the dearth of market research was perhaps the most revelatory discussion topic of the day. Africans often caution the rest of the world not to think of “Africa” as one big market of more than 900 million people. Instead, they say, Africa is a complex place with 53 distinct countries and countless different markets. And yet when it comes to microfinance, Africans are commonly lumped together in enormous market segment, like the 300 million that live on less than $1 a day. There is virtually no understanding of what a borrower’s needs are, how much of a credit risk they might be, or how successful they have been after they are given a loan. And that’s no way to do business.

Lisbon_deep_dive_003 “You have to have an intimate understanding of the customer so that you can serve them better,” said Patrick Muthui, the CEO of Virtual Services at RMB Private Bank in South Africa, shown here. “And in order to understand and segment your customers you have to collect information on them. You have to know what their behavior is.”

On this point, there was no dispute. But how to obtain that information? Many Africans live completely off the grid, with no land ownership, credit, or even a single utility bill to their name. And it’s not just those living within the borders of African nations that go unbanked and unidentified. The diaspora, or those Africans that leave the continent to work and live abroad, and who often send money back home, are completely untracked, despite their obvious importance to the local economies.

The dilemma begs the question of whether national I.D. systems will be a necessary precursor to Africa’s economic emergence. Some lenders do require that borrower’s sign up for identity cards, using photo I.D.s and fingerprint recognition. And retail stores will often allow customers to pre-pay for a time, until their credit risk is better understood, and then will offer credit. All of which is helpful for those individual businesses. But these examples are such small pieces of a massive puzzle.

There are a few sources of good and growing information on African markets. Money transfer services like Western Union, wireless carriers, and a handful of retailers are beginning to store data. Now the information needs to be married, analyzed, and acted upon. Just another layer in the complex and confounding effort to bring Africa into the global economic mainstream. But this problem seems to be imminently solvable. And judging from the eagerness of the Lisbon deep dive’s participants just may get done.

July 13, 2007 in Africa | Permalink


TrackBack URL for this entry:

Listed below are links to weblogs that reference Know Thy Customer:


This post illustrates one of the problems with gathering ideas before the Deep Dives. Most Western impressions of Africa are based on media images of conflict and strife. This is what makes a news story, but doesn't necessarily provide a comprehensive picture of African issues.

Many people's understanding of African needs are based on televised appeals for funds by the various charitable organizations who work there. This provides an extremely narrow picture of the African scene, and may be related to the question raised at other meetings about the potential unfavorable aspects of charity.

Many of the best ideas are probably going to be formulated -after- the Deep Dives have concluded. This indicates the need for an extended effort once the Deep Dive topic has moved on.

Posted by: Tim Raisbeck | Jul 15, 2007 7:13:02 AM

Tim, could not agree more with all of your sentiments. More to come on the ill-effects of media coverage in Africa. And the follow up from the deep dives is crucial, and something that IBM takes very seriously. Thanks for the comment!


Posted by: Dan Briody | Jul 16, 2007 6:54:46 AM

Know Thy Customer

The turn of this conversation has been invigorating and stimulating to my own “thinking community” in the UK and in Africa. In the UK, I represent the Global Women’s Inventors and Innovation Network, GWIIN www.GWIIN.org and in Africa, my position as Operational Director of Science and Innovation for the African Women of Essence Initiative (AWEI), a new GWIIN subsidiary to be launched in Senegal this weekend, targets women who are empowering their communities to think differently about promoting enterprise and innovation in Africa today.

Starting from December 2007, GWIIN will open its first innovation centre – the Centre for Innovation, Enterprise and Technology (CIET) For Women, in Lagos Nigeria. Through a new alliance with Doregos Private Academy – a new university, GWIIN received the donation of a 3 storey building to act as a regional educational tool, located within the new campus. We intend to use this centre to provide new opportunities for knowledge transfer for over 200 of Africa’s most innovative women within the first three years of opening.


Mr Carney hit the nail on the head with his conclusion about knowing the customer well before you begin to make any strategic interventions in Africa.

Microfinance has certainly taught the world a lot of lessons about the behaviour of Women in Africa and other developing countries. The data has shown the exponential benefits to the continent of continuing to invest in women, nurturing and supporting nascent entrepreneurial ambitions. Every dollar invested into a women’s project or business through microfinance yields at least three times its monetary worth in profit to the economy, strengthening of family and communal networks and contributing to the infrastructural stability of the community in which that woman lives.

The female borrower will not only turn a profit but she will also feed the family, reinvest in the business and contribute to community projects to help other people.

At GWIIN we are using the vehicle of AWEI to empower women who have already been identified Change Agents in their own sectors to identify grassroots projects and businesses which would benefit from additional support about marketing, accessing new technologies, business planning and financial management advice for instance. We also provide intellectual property management for those small scale inventors and innovators who already have a product that is truly novel and adds value to their market sector.

GWIIN has been successfully supporting women take ideas and products to market through its myriad of networks, for the last ten years worldwide. At the European Women Inventors and Innovators awards in Berlin June 2007 (EUWIIN), we celebrated the achievements of outstanding European women who have developed, marketed and successfully launched innovative products for a worldwide market. Our experience has shown us that all the products, from low – tech to high were developed by women who started from a real understanding of the needs of the customer on the ground. The women then worked upwards to determine the value proposition which allowed them to take the products to market.

My conclusion here is that whatever initiatives in innovation are considered in Africa, the specific value that women innovators add to this arena should be seriously factored into any long tern strategic plans – A Gender Sensitive Agenda for Innovation in Africa.

Microfinance initiatives by the World Bank and others have already given us the data we need to understand many women borrowers, their credit record, success after being given a loan and the types of businesses they are working in. We need to use some of this data to educate the men in those communities about the value of supporting women in their on-going business ideas. The patriarchal cultures of many African communities makes it very difficult for us to continue our work in growing small businesses led by women at the grassroots. If the only choice for our business women becomes a marriage and stable family life or economic success at a national or international scale, we often find that they begin to downsize their ideas and ambitions or meekly succumb to the sabotage of the elders or other men in the community who find the power balance shifting when the women have more money and more choices in their lives. This is much more than a glass ceiling for the African women we work with, it can be the difference between life and death because they are in effect choosing to remain poor and thereby reducing the life chances of their children as well. But the loss of status as a wife or Community elder can mean more at the onset than being recognized as an Inventor or innovator – that is too new a label, its value and ultimate contribution to the growth of the communities these women live in is not easily understood at the grassroots right now.

We, at GWIIN suggest that by focusing on a number of success stories here across an range of industry sectors, we can begin to address these challenges head on and using the Centre for Innovation and Enterprise – CIET as an Innovation Skills Development, Pipeline, with incubation hubs for new entrants, providing role models and ultimately a reliable conduit to access hard to reach communities and provide them with the services that they actually need.


I was also very glad to see the Royal academy of Engineering mentioned in the conversation. I have worked with them in the UK, in my former role as a Senior Executive for the Engineering and Technology Board (ETB), an overarching body that works with the Engineering Council (UK) to support the 32 Engineering institutions covering all the main disciplines in the UK.

My particular role in the Education Policy and Innovation team (EPI), managed several initiatives to strengthen science, technology, engineering and mathematics (STEM) education in the UK. We put the needs of business and industry at the heart of all our work because of the overwhelming contribution that the engineering industry continues to make to the UK economy.

My experience of these initiatives and the difficulties we observed in reaching women, girls and ethnic minorities in the UK with positive messages about working in science, engineering, technology provides some comfort in these discussions too. You see, promoting innovation can be hard for resource rich countries too. Scarcity of resources is not the only barrier to winning hearts and minds, as many of our high profile campaign have been shown. It’s hard to convince young people in the UK to enter into to SET and even our young professionals to remain or update their skills to meet the challenges of a changing economy.

I think we can learn some lessons from this and start new initiatives differently in Africa straight away. My science consultancy work for the British Council in South Africa over the last nine years has also taught me the value of recognizing and celebrating African Innovation and Technology development that is active on the ground already.

In March 2007, at the Sasol Grahamstown SciFest, we trained 23 science communicators for the British Council Science programme. They came from different regions in South Africa, Kenya and Lesotho and they were inspired to plant African Science Cafes, using the Café Scientifique www.cafe-scientifique.org model of engaging the general public in conversations about SET.

We believe that in Africa this European model cannot be transplanted wholesale and in September 2007 in Cape Town, stage two of this programme will focus on applying African Umbuntu principles to the African Science Café model. By translating it to African Science Ndaba or Wozani Sikhuleme iScience! We can begin to translate the conversations with a conscious determination to empower as we communicate. Umbuntu says “I am because we are”, so the connectedness of science to the rest of our lives must always be a foundational principle to the way in which we work. Here we do not promote a false objectivity, rather, we celebrate the integral value of the whole.

We are working Dr Wangui Wa Goro and Dr Martha Chinouya, both contributors to a newly published book on African Leadership called “Under the Tree of Talking – Leadership for Change in Africa”, www.counterpoint-online.org we are confident of navigating through the morass of failed relationships between experts from the west trying to transplant tired models for growth without first checking the viability of their migrant seed or tiling the soil to provide a balanced and nourishing environment for the hybrid to grow as a native plant.

For AWEI, we intend to join with strategic business partners across Africa who are selling consumables or everyday household products to celebrate the contributions of contemporary African Women Inventors and Innovators on their packing and product advertisements. Everyday products and household goods increase access and target the right consumers for “hearts and minds” campaigns.

We intend to encourage people to link science with women and inventors, innovation and technology. We have so many externally validated examples to use for this campaign. By focusing on living women and real products or prototype ideas, it acts as a stimulus and has the win win value of promoting goodwill to new entrants into the African market. The AWIIN (African Women’s Inventors & Innovators Network) “African women can win” campaign has the unique capacity to offer follow through on the campaign through the CIET’s work as well.


My final contribution rests on the question of how to obtain information on Africans that live completely off the economic grid, unbanked and unidentified. What a wonderful business opportunity this is for new entrants to Africa!

If we look at the types of businesses that are successfully dealing with the needs of Africans and the Diaspora community, we can find some which are effectively demonstrating the importance of these “invisible” Africans to local economies. There is, for example, a new generation of internationally educated Kenyan Entrepreneurs who are working at bringing Africa into the global mainstream. These include Ayatsi Makatiani, the young MIT graduate who founded Africa Online in the mid- 199o’s and Segeni Ng’ethe, a gradyate of Georgetown University who runs MamaMikes.com, an online store that allows clients anywhere in the world to send flowers on Valentine’s Day, a crate of Tusker beer for Father’s day or even a live goat for relatives and friends in Kenya and Uganda.

This example of cultural competence in business is one that allows the invisible market to come to you. By including young business leaders like these in our conversations with Africa, we can see that the Africans we are trying so hard to reach, are already reaching out for us too.

Systems that are attractive and accessible to these consumers, such as those used by MamaMikes are beginning to build the bridges to make these connections and can also provide a basis for market intelligence that helps to build a fuller profile of the customer, both the African in Africa and in the Diaspora. At the Technology, Entertainment and Design conference, TED Global – Africa The Next Chapter in Arusha, Tanzania, June 2007 – www.TED.com. Many of us were particularly privileged to meet with many of the leading “Thinkers and Do -ers” on the African continent and the Diaspora, beautifully illustrated in the Vanity Fair Africa issue. Google and AMD also sponsored 100 TED African Fellows – emerging leaders and thinkers from across Africa and the Diaspora. Mr Ng’ethe and myself were amongst the “African Fellows” at the Arusha conference.

GWIIN is working to support North – South partnerships with strategic partners in East Africa. Tanzania and Kenya emerge as fertile ground for investment as the TED conference – a mainly US industry funded forum – showed. But the soft side of Foreign Direct Investment was more clearly displayed there, with BONO’s presence highlighting the work of his social enterprise in Tanzania – DATA. Many other pre-conference excursions showed participants valuable public private partnerships in enterprises to produce Pesticide Embedded Bednets for malaria prevention and other products that involve economically disenfranchised communities, but still turn a good profit for the investors with a social conscience. As the President of Tanzania, also present at the conference indicated, this type of business and enterprise development initiative is good at meeting the development needs of the government and helps towards meeting internationally agreed Millennium Development goals.

GWIIN is still cautious however, aware that these new relationships still need to be delicately brokered to prevent a new wave of “Aid Entrepreneurs” entering into the continent without the knowledge base or cultural acuity to add a good value to this important new community. Organisations and people that are trusted on the ground in their own countries, are still vitally important, not to act as mere middle men to get a cut for themselves, but to actually to translate these contracts meaningfully and to work transparently towards the eradication of corrupt and corrupting practices in transnational contracts and partnerships.

GWIIN is promoting interest in an initiative to start Call Centres in East Africa, especially using groups of women who are good English speakers and well educated in US or UK modeled institutions in Africa. This would provides a good service to international businesses and also helps women who face cultural or religious barriers in entering the modern workplace. Many of these well educated women have been excluded from the drive to find employment for poor people, even in countries like Kenya where President Kabaki promised 500,000 new jobs per year when he entered office in 2003. In a US State Department report, it was shown that Kenya led African countries in sending students to study in the US. In 2001 -2002 Kenya led with 7,097 students, followed by Nigeria (3,820) Ghana (2,672), Egypt (2,409) and South Africa (2,232).
But what initiatives are there for improving the skills of women, especially the many well-educated migrant communities from countries like Somalia, Sudan, Rwanda and Ethiopia who have fled the crisis in their homeland to seek safe haven in Kenya?.

The international community has a responsibility to act early and proactively, as a partner to countries like Kenya in maintaining political stability and channeling the frustrations of under-employed young people into projects that make them productive partners with international companies in their own homelands. This would do much to reduce the tide of illegal immigration from poor African countries and wean the poison out of disruptive radicalize the discontented young men and women marginalized from the globilized economy. Recent bombing and terrorist inspired attacks in the country are driving a wedge between Kenyans and refugees with Muslim backgrounds. New measures to promote community cohesion and integration of asylum seekers in Kenya, should include the recognition of the skills the refugees bring and the economic value that they can bring to their host country.

From what I read of the contributions, I’m glad to hear the huge challenges identified by many contributors are largely solvable!

Posted by: Dr Sheila Ochugboju | Jul 17, 2007 7:28:35 AM

The statement was made that ...

... Africans often caution the rest of the world not to think of “Africa” as one big market of more than 900 million people. Instead, they say, Africa is a complex place with 53 distinct countries and countless different markets. ... “You have to have an intimate understanding of the customer so that you can serve them better,” ...

Just as the rest of the world should not view Africa as one big homogeneous market, the rest of the world should not view Africa as one big English-speaking market. It will be important to know your customer's language needs as well, in order to serve them better, such as...
- Are they literate?
- If so, what languages can they read and write?
- If not literate, what languages do they speak reasonably fluently?

How can you reach out to your customers if you don't communicate with your customer in the languages that they can read or understand?

Africa is not a homogeneous continent when it comes to language needs any more than it should be viewed as one big market on other factors.

Posted by: Sue Williams | Jul 26, 2007 2:55:33 PM

Thanks for this post, really great read

Posted by: Ryan | Apr 19, 2008 5:36:07 AM

The comments to this entry are closed.