Targeting a hitherto untargeted customer segment using a differentiated delivery framework is a strategy. FILE PHOTO | NMG I recently sat with a group of senior managers from multiple organisations talking about the difference between strategy and business-as-usual. It never ceases to amaze me how many managers believe that their strategic initiatives as defined by the organisation are actually business-as-usual objectives dressed in ball gowns and glass slippers. An example was thrown into the discussion of one of the participant’s employer’s strategic pillars: customer centricity. How is that a strategic objective, I asked? Well, we look at the customer as special and we focus on them to deliver a good service, was the earnest response. Wait, what? But isn’t the customer the very reason every single person in the organisation comes to work, from the cleaner on the shop floor to the CEO? Yes, I was told, but by having customer centricity as a strategic objective we will now get the appropriate focus etcetera, etcetera. The reason for doing any kind of business is to get money from a customer and convert it as efficiently as possible into a profit from the shareholder. So, claiming customer centricity as a strategic objective is as good as saying getting staff to come to work is a strategic objective: they are both matters in the ordinary course of doing business. Targeting a hitherto untargeted customer segment using a differentiated delivery framework is a strategy. Serving existing clients is business as usual. Creating new service delivery mechanisms such as digital is a strategy; focusing on giving existing clients a wow experience is and should be business as usual. Looking out into the Kenyan business horizon, Safaricom makes an interesting case study on what strategy in motion looks like. Following its 2008 IPO, Safaricom entered the realm of publicly publishing its results. In the results for the financial year ending March 2009 which was the financial
year during with the IPO took place, its revenue from voice was 83.4 per cent while data which represented SMS, MPesa and other data revenue generated 12.9 per cent to the bottom line. By financial year 2013, Safaricom reported that voice now contributed 64 per cent of service revenues. Five short years later the upward trajectory of non-voice data continued with voice contributing only 45 per cent of service revenues by March 2017 compared with MPesa at 27 per cent of service revenue and fixed and mobile data revenue at 16.8 per cent of service revenue. Combined, MPesa and data revenue add up to 43.8 per cent, which is slightly below what the voice data brings in. That’s a telling number right there. You may not have noticed it, but Safaricom has stealthily crept into your life at multiple touch points during the course of your daily routine. From the way 72 per cent of Kenyan market share communicates by voice, to the way Sh6.9 trillion in value goes through the MPesa payment system in the form of money transfers, business-to-business payments as well as customer-to-business payments. Somewhere along that chain are the funds you sent to your family, farm workers, payment at the supermarket till, barber bill, bar bill, church or funeral harambee contribution or fuel payment. Some 83,000 Kenyans now use Safaricom’s fibre for their Internet connections at home, with 1,500 buildings fully wired for Safaricom Internet. Those fibre numbers are only projected to grow.
This strategy to ensure multiple touch points in the dawn-to-dusk cycle of a consumer’s life is similar to global giant Procter & Gamble’s strategy to be immersed in the lives of their customers throughout the day which is the bedrock of their innovation strategy. From Crest toothpaste and Oral B toothbrushes, to Gillette razors and Head and Shoulders shampoo will carry the consumer through their morning routines. Pampers diapers, Vicks vaporub, Olay lotions and Always feminine products feature through that brand base as well as various dishwashing liquids and household detergents such as Ariel and Tide. Speaking about consumers on their website, they say: “We gain insights into their everyday lives so we can combine “what’s needed” with “what’s possible.” Our goal is to offer them product options at all pricing tiers to drive preference for our brands and provide meaningful value.” That mind set ends up deriving $65 billion (Sh6.7 trillion) of annual revenue by the end of financial year 2016. The numbers never lie. It’s fairly evident that Safaricom is headed on the same trajectory of impacting its customers from dawn to dusk as it strategically morphs itself from being a mobile phone company to the primary financial and data services provider for the Kenyan individual. [email protected] | Twitter: @carolmusyoka
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