Henry Ford famously said, “If I’d asked people what they wanted, they would have said faster horses.”
There’s two ways to understand what he meant. One is customers don’t know what they want, so why bother asking. But for every Henry Ford or Steve Jobs (Who said “It’s not the customer’s job to know what they want.”) there are 1000 businesspeople who thought they knew the next brilliant product and are now staring at a cash flow statement soaked in red. Genius is in short supply.
The rest of us mere mortals must subscribe to a second interpretation: customers often can’t or won’t tell you what they want, so you must work to dig down to what they really need. To understand this requires knowledge about not only their current use of substitute products, but also their broader life context: their household situation, their aspirations, and their worries.
A prime example of this need for deeper customer understanding is the vastly different levels of success which very similar mobile money products have encountered across markets. M-PESA Kenya’s success has spurred providers across the globe to launch services with similar functionality: a liquid wallet with an emphasis on P2P transfers (“send money home”) and bill pay functionality. As we highlighted in the first post in this series, the “send money home” proposition has not yielded as much success outside Kenya where just 1 in 15 services launched since 2007 have accumulated more than 250,000 active users. This can be explained by differences between markets that have profound effects on how consumers perceive the value of otherwise similar services.
A truly valuable service would meet two criteria: they must fill both a deeply felt and a poorly met need
For a P2P focused mobile money service to find success, it must help manage customer’s finances in a way that really matters to them – the magnitude of need for the service is high. Money can be deeply embedded in our sense of who we are: paying for a stick of chewing gum is less meaningful than paying our child’s school fees. In Kenya, a resident of Nairobi might have lived there for 25 years, but when asked they will very likely say they are from a certain rural district. Emotional ties back to the shamba (family farm) are unusually strong, and Kenyans lubricate these rural-urban relationships by frequently sending money.
Ghana is different. More families move to the city together rather than wives and children staying behind. Local researchers report migrants quickly make the attitudinal shift to becoming “from Accra”. While Ghanaians may send some money, money transfer might not mean as much to them. In the figure above, money transfer in Ghana ranks lower on “magnitude of need” than for the average Kenyan. This might help explain why three mobile money services launched in Ghana have not yet gained major traction, even with not inconsiderable spend on marketing and thousands of agents.
Valuable services not only meet a deeply-felt need, they tackle a poorly met need. The Philippines provides an illustrative example. More than 10 million Filipinos send home USD 21 billion annually from overseas work. It is common for fathers and mothers to leave their children behind in the Philippines, sometimes for years. In short, the money they send home is a major part of showing they are “good parents”. Although both major telcos in the Philippines have had mobile money services for nearly a decade, neither has gained massive traction with remitters or receivers. Well-entrenched international and Filipino money transfer companies already offer reasonably affordable, trusted, and widely distributed services. In short, money transfer means a lot to many Filipinos, but the need is already reasonably well-served.
To gain traction in Ghana, the Philippines, or elsewhere providers need to find the financial service needs which are deeply entwined in consumers’ lives (high magnitude of need) and not well-served by existing options (high on the “unmet” index).
To source these deep insights, what methods can providers use?
Money through Mobile(MTM.) Simple day-to-day money management using phones.
I have been propagating for over ten years a Non-Banking Financial Service that is non-internet dependent, secure, easy to use Universal Money management system. ‘Money through Mobile, MTM is transparent to Banking, Credit card and other financial institutions. MTM service can be extended to land line phones also in a limited way, as integers 0 to 9, * and # in phone key pad are only used for the USSD transaction.
A USB dongle or a special purpose SIM mounted set top linked LAN can provide access to computers in shops, malls, vendors, utility service providers, and other public and private institutions to take care of entire e-money transactions using MTM.
The idea is to profitably deploy high volume of money in trillions that remain within MTM service provider system, so that the service can be provided free of cost to end users with profit/revenue sharing arrangement with Telecom Service providers for usage of their access network.
The system I propose has great potential to quickly enable inclusive finance of all section of people especially those in the lower socio-economic strata both in urban and rural areas across the country. With OFC & Wifi available across the country and with solar power enabled mobile phones, MTM service will become the easiest and assured means for quick disbursement of various welfare funds like Right to work, Right to food, Right to education & Health care, welfare payments to Handicapped, Old aged pensions and Destitute etc., directly to the beneficiaries without banks and financial institutions & middle men.
MTM users can do almost all of their micro and macro money transactions using their phone from anywhere any time. The system linked with Post offices / MTM franchisees and MTM-ATMs, users can convert the money in their MTM account to hard cash when required.
I have been pursuing this with Ministry of DOT, MOF, Ministry of Rural development, Reserve Bank of India, and some Mobile Telecom Service Providers. It appears the delay in taking of is due confusing Money management using phone with Management of Banking service using Mobile phone or Mobile banking service. MTM has nothing to do with banks or banking services of other financial institutions.
The technology proposed for MTM is same as that being used for IN based pre-paid mobile service.
Coming at it from another angle, enterprises that distribute and market goods can think about the size of the packaging. In some of these developing economies, people can only afford to buy small quantities. It is a different mindset than what we are accustomed to; consumers in developed countries may buy in bulk (Costco) to save money. In either case, as you correctly pointed out, it requires a deeper understanding of the needs, in complement with the means of payment. I enjoyed the post!