Most entrepreneurs spend countless sleepless nights figuring out how to best serve their customer with their world-changing product or service. Align implementing partners (from manufacturers to community organizations), grow the funding pool, find the right talent to execute your vision, and voilà—you become the guru with a tremendous customer following.
I thought the same when embarking on a journey to establish Ghonsla (which means ‘nest’ in Urdu) as a leading innovative insulation solutions provider in under-served markets. Fifteen months into our operations, we had made progress: over 100 customers served, secured strategic manufacturing and field partnerships, over $100,000 raised in grant funding, and a team of a dozen engineers, local entrepreneurs and community champions.
For us to succeed, the customer had to become our guru—the center of our learning and transformation. Tweet This Quote
Yet, the insulation technology we had extensively tested and invested resources in to manufacture and promote was being rejected. Not only were we disenchanted, we also felt that Ghonsla’s potential to create lasting impact was diminishing.
We were at an inflection point—the customer was our biggest critic but also had potential to be our greatest champion. To salvage our efforts and for us to succeed, the customer had to become our guru—the center of our learning and transformation. Hidayat-ur-Rehman, who heads our operations in the north of Pakistan, stressed that we needed to extend beyond observing and getting feedback on product and service features. We had to connect with their aspirations, have insight on their daily decision-making and understand what capabilities we needed to best serve them. This required changes to our business model and also our organizational design and culture.
In retrospect, there are three essential things I have realized from my experience in Pakistan of learning first hand from the end customer:
1. Diligently iterate product and service features based on customer aspirations
When serving customers in emerging or BoP markets, you’re selling a lifestyle rather than any particular feature. Tweet This Quote
When serving customers in emerging or BoP markets, you’re selling a lifestyle rather than any particular feature. Most enterprises have a high likelihood for building a useable product providing a useful service.
But if it is not desirable, then it will not generate the demand or traction envisioned. Also, if being innovative is part of the sell, one must continually benchmark against other products or services in the market and enable customers to feel unique as the business scales.
With basic cellulose based insulation panels, which could be retrofitted under existing metal roofs, we wanted to significantly improve indoor comfort and health as well as decrease heating expenditure. However, we soon learned that functionality of the insulation differed from the customers desire to have a beautiful, unique, economical and easily installed ceiling. If customers were convinced of the durability and attracted by the design options, only then would they accept the insulation’s effectiveness.
It is the intimate understanding of the customer’s psychology that determines the success of the value proposition. Tweet This Quote
So we pivoted and began to work with a combination of products to meet the aesthetic and insulation requirements. Also, when existing customers started quoting higher prices to their neighbors in order to discourage them to buy the insulation, we realized that customers wanted to remain unique, which required us to provide greater design flexibility.
Sometimes it is truly puzzling to understand what the customer wants and prioritizes. While there is an abundance of guidance available on customer development and human-centered design, it is the intimate understanding of the customer’s psychology that determines the success of the value proposition.
2. Experiment with various strategies
When working in remote areas, there are challenges to building a cost effective value chain. Distribution and customer acquisition costs are high, especially with dispersed customers. Building visibility in communities takes time. You need to be innovative in order to serve customers and intelligently invest resources; you want to generate volume instead of only cutting costs that may kill the business in the long run.
Building visibility in communities takes time. Tweet This Quote
To grow our customer base, we needed a strong door-to-door campaign coupled with having a prominent position in the market. We found men and women visiting households together, especially over the weekend, to be most effective. Since customers were investing a significant amount to insulate their homes ($500 on average), making the customer feel valued was important. In our case, an offering of tea and a seat in our office changed the dynamic and resulted in speculations being put aside.
We also had to win over the religious clerics and the local carpenters—both of whom played an important role in household living. Since we were in the business of providing service, we also needed to build a strong network of local installers and introduce product financing as a part of our portfolio to accelerate insulation retrofits.
In our case, successfully creating and serving the demand required a number of components in place. Arriving at those was only possible from testing a number of strategies, seeing what triggered customer flow, and determining what was feasible to provide consistently.
3. Establish the learning in-house instead of outsourcing
Business is about relationships, and building and maintaining those relationships is critical to the growth of any social enterprise. Having fresh graduate interns or leveraging existing networks of the NGOs are strategies many social enterprises employ while they are bootstrapping.
Business is about relationships, and building and maintaining those relationships is critical to the growth of any social enterprise. Tweet This Quote
In the past, Ghonsla has had a number of talented and well-meaning people give their time to grow the operations, as well as NGOs that have provided validation as early customers. However, the nature of those relationships has been temporary, and the learning has been disconnected. To ensure that Ghonsla was at the forefront and consistent in capturing insights from customers on product and service features as well as the business model, we had to build the capacity of our teams operating in the field. Instead of top down management, we needed to acknowledge and appreciate the learning from the field and incorporate that in strategic decision-making. This required growing more ownership and control on the ground through empowering local entrepreneurs and rigorously following up.
There are many challenges when launching and growing a social enterprise. However, if you are deliberate about learning from the end customer and empowering your team to best serve, then building an organization and creating impact that lasts is not unreasonable.