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Lindsay Stradley Finding Impact

FIP 84: How to Build a Relationship with Your Core Customer Base with Lindsay Stradley

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Lindsay Stradley is co-founder of Sanergy which is making sanitation hygienic and affordable in Africa’s informal settlements using a franchised network of toilets run by local residents. Sanergy converts the waste into valuable byproducts, which are sold to keep the system sustainable. Lindsay is an alumni of MIT and Yale, she founded a charter school in New Orleans after Hurricane Katrina, has worked at Teach for America and Google, and now lives in Nairobi, Kenya.

On this episode you’ll learn:

  • Lindsay draws on experience from her earlier career when starting up a charter school. She had to show up where customers were, which meant traveling around south-eastern America to let everyone know that a school was opening. And at Google it was her experience thinking about scaling effectively.
  • Sanergy has a B2B (business to business) relationship with clients. They segment them by their businesses, which meant (1) Small-business owners (e.g., kiosks, water points); (2) Schools & other community institutions; and (3) Landlords.
  • For each of your customer segments, it’s essential to understand the value you’re creating for the end user and their decision making criteria.
  • Across all three of their customer segments, Sanergy offers the same core product, but with a slightly different bundle of services and ancillary products that speaks to their needs.
  • They started their business focusing on the most obvious need and demand within the community, which became their first customer segment. Then they expanded out to the next biggest area of demand – within schools – and then the next – landlords. Starting in this way helped them establish their brand within the community and iron out any operational kinks.
  • Within the first segment, it was actually split into two sub-segments. So segmentation is continually evolving as the customer base grows.
  • To test product-market fit with each of these segments, they utilise their field teams to get qualitative feedback from non-customers on where the gaps are. Pair this with available data, then pilot! And hone in on the early feedback from the new customers on effectively filling the gap.
  • At the beginning, all customers were on the same price point but now they have differentiated pricing for each customer segment. They look at the cost of materials and cost of serving the customer segment. They even moved away from their traditional asset sale pricing for their landlord segment, moving to a subscription model, based on an understanding of the decision making process of this customer segment.
  • Thinking about setting prices initially, social enterprises need to understand their costs at a certain scale, and after adding your margin, this is a starting point for your pricing. You then need to decide whether you are willing to take a loss to reach a certain customer, or take a loss on a cashflow basis because you assume that you’ll make up your margin during the lifetime of that customer (over the long term).
  • To determine who in your business has a relationship with your customer, you start from the operational needs, and then figure out how best to leverage those customer touch points to serve the customer as much as they need.
  • In terms of whether Sanergy train their staff in different ways, depending on which customer segment they’re serving, they’ve gone back and forth on this. It’s only their sales team that are split by geographical area, but not per customer segment. Mainly because most new customers are coming from one of their three customer segments, so most of the sales teams are focusing there. Also, their operational efficiency was being limited when splitting customer service agents by a specific customer segment. So now they focus on a geographical area in the first instance.
  • When first thinking about customer segmentation, you can see how other businesses operating in your geographical area (and serving the same customer demographic) are doing it. When Sanergy first started, they studied the marketing, sales and operational processes of Coca-Cola and M-Pesa. Both of them use a B2B network to reach an extremely high percentage of customers in Nairobi’s informal settlements.

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FIP 83: Marketing in Emerging Markets with Amanda Arch of Kasha

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Today, we speak with Amanda Arch of Kasha on how it uses online and mobile platforms to market and deliver health products to middle class and BOP consumers in Rwanda.

On this episode:

  • Amanda explains Kasha’s development in Rwanda, which began with building out an MVP of the technology and then working with different customer segment test groups.
  • Amanda shared that Kasha partnered with non-profits deeply imbedded in Kigali, universities, and associations of professional women to set up test groups that ring fence customers with very similar and specific characteristics to build profiles.
  • Lessons learned from this process are: (1) there is a difference between excitement and ordering, so the company needs a strong feedback loop with customers, and (2) people really wanted to see products in person before ordering, so it is really important to have products on hand as part of the customer acquisition process.
  • Amanda also recommends developing power users and / or brand ambassadors that can get feedback from other users, as well as providing post-event communications methods (such as Whatsapp).
  • Their three core customer segments are BOP customers, university students, and professional women, which are designated into these groups by ordering or delivering method. Amanda detailed how Kasha chose their segment marketing methods, which started with looking at what else was happening in the market and what the best practices are (for example, agent-based networks in rural communities) and then customized these channels for Kasha. Each segment has different messaging, events, and specials based on their group’s characteristics.
  • She also explained that in the early stages, the company only tested messages and channels to understand their efficacy, not their cost. This allowed the company to make an investment in the brand that would not make sense for unit economics as they scale up. In the next phase, they really focused on customer acquisition data with an overall eye on lifetime value per marketing investment.
  • During interactions with customers, Kasha also seeks to capture data for themselves to better understand their core customers as well as verify it with other external sources. Amanda also provides some of the company’s key KPIs including orders across segment, repeat orders, unique customers, and average basket size. She also shares some insight into the business model which looks at average basket size across different segments in order to resist only serving more profitable segments or limiting the platform to higher margin products.

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David Henia Finding Impact

FIP 82: Building an Iterative Product Testing Platform with David Henia

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David Henia has been the Lead Developer at Eneza for the last two years and is in charge of product, technical and back-end development. Prior to his role at Eneza Education, he held a variety of roles at different technology development and software firms in Nairobi. David has a BsC in Computer Science from Africa Nazarene University. Eneza Education is a comprehensive virtual tutor, that provides universal access to affordable, quality, lifelong learning through dumb and smart phones. 70% of its users are low income students in rural areas. It has 4.9 million users and is Africa’s leading mobile online learning platform.

On this episode, David walks us through Eneza’s products tests and and how to design and run experiments on product features, pricing, and marketing campaigns, etc. The goal of this episode is to teach social entrepreneurs how to build their own product testing methods.

On this episode you’ll learn:

  • A product testing platform is essential for any startup organisation because the startup is like one big experiment, so you need to keep your learning organised.
  • Any organisation will surface many ideas about what to do – they come from your customer, yourself, your team – but without organising these ideas, they’ll soon slow you down or even move you backward.
  • Establishing an iterative product testing process also builds autonomy within your team, so team members can discern which ideas to park and which to take forward.
  • Ensure you’re collecting all the ideas that the organisation surfaces, and with the team, try to find the root problem that the idea is addressing or relating to. Then determine the time involved, the cost and the effect on profit and/or impact.
  • With a good handle on the problem, then you can start to build experiments and test ideas that can solve the problem.
  • This process is managed by the product team, who is led by the Product Manager. They work with all departments and are the representative of the customer.
  • To prioritise projects, you can use the RICE framework, which means Reach, so how many customers will the product or test reach, impact to the business, in terms of profit and/or impact, how Confident are you about the results, and how much Effort in terms of time, money and people.
  • Then come up with a hypothesis, e.g. if you do X then you guess Y and Z will happen, because of what you’ve observed. And success will look like A, B and C. And it will be measured by S.
  • Then you build a Minimum Viable Test to get some quick feedback over a week or two, independent of any other teams internally.
  • The engineering team isn’t involved until the tests have been conducted and the decision made to build the product or feature (although the engineering team leadership is involved in this decision).
  • General indicators exist which can help you benchmark your organisation against industry standards, such as customer lifetime value, customer acquisition cost, unit economics, etc.

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