WHY CUSTOMER IS KING – ALWAYS

There’s a reason why the common saying the customer is always right. Of course logically the adage holds no water because the customer is, in fact, sometimes (even often) wrong. But the customer can never be made to feel wrong.

Here’s why:

1. Wrong = negative

When trying to make a sale, a salesperson tries as hard as possible to get the customer to say “yes” as many times as possible and to keep the conversation as agreeable as possible. He, the salesperson agrees to everything – even when he disagrees! For example:

Client: so, if I were to buy 2 of these instead of one you can give me a 40% discount on one, right?

Seller: why that’s a great idea! But tell you what – I need to be in business tomorrow so I can bring you some more wonderful things so let me give you the very best offer of 10% off if you pick both.

The point is, the conversation stayed positive even though the customer made an unreasonable demand. No = no sale; yes = sale!

2. Customer has options!

In the 21st Century, regardless of what one’s business is, there is a lot of competition. Even worse is that unlike a few years back, when the competition was down the street, nowadays the competition is halfway across the globe – and often they barely speak english!

Because of all of the options that a customer has, a supplier cannot afford to be arrogant or aloof – even when dealing with an unreasonable customer.

3. The customer has influence.

Research has shown that a lot of people depend on word of mouth when making decisions on which supplier to use. Despite the fact that advertising has proliferated every aspect of our lives – TV, Radio, online, billboards etc, we take the word and endorsement of someone we have met much more. Its a question of trust.

As a seller treats the customer as king, the customer is disposed to brag about the wonderful experience they had to their friends, many of whom take the endorsement seriously.

The nature of the relationship is not one of equals. The seller/ supplier is a servant of the buyer. The most successful businesspeople are those who realise that early and no matter how successful they get, never forget this.

ESOMAR Global Prices Study 2010 – Africa Highlights

Every two years, ESOMAR conducts a global survey on research prices. Participating countries and/or agencies submit dummy quotes for a number of hypothetical research projects. For example:

…the standard specifications for a U&A, using face to face interviewing, are as follows:

  • Topic: Chocolate Confectionaries
  • National sample (n=500)
  • Respondents: regular users of chocolate
  • Interview length: 25 minutes
  • Deliverables: tables

…while the specs for FGDs:

  • Topic: Retail Banking Services
  • Number of Groups: 4 groups in 2 cities (2 male / 2 female)
  • Length: 2 hours
  • Deliverables: personal presentation and audio recordings

Included in the survey are other research products and approaches such as: online, CLT, face to face, telephonic, etc.   As most of these data collection methods are not (yet) relevant in our African markets, this evaluation will focus on the traditional U&A and focus groups.

Global Perspective:
The global average (median) cost for an in-home U&A is $17,580; the average cost for FGDs, $10,412.

So, where does Africa stand?

U&A studies in West & East Africa are 22% more expensive when compared to this global average. However, compared to Southern Africa, these regions are practically a bargain.  A U&A in Southern Africa is 73% more expensive than the global average and almost approaches Western European levels.

In contrast, in East and West Africa our FGDs are 12% less expensive than the global average.  In Southern Africa, though the difference is less extreme, focus groups still come in 34% above the global average.

The only sub-region in Africa in which research costs fall below the global averages is North Africa, with U&As being 13% and FGDs 35% cheaper.

Thus, project costs across West and East Africa are at an uneasy point of compromise: higher than our clients would like them to be; and lower than we need them to be if we want to continue building up local capacities and resources and developing a truly world class research industry in Africa.

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Trend: Global Prices Study 2007 -  2010
Comparing prices for a U&A study across the four African countries represented in both waves of the study, South Africa would seem to have the least increase in research cost, Kenya the highest (with Nigeria not lagging far behind). However, in order to know why we’re not laughing all the way to the bank, one would need to figure in the massive devaluation of the US Dollar that occurred within that period and further the erratic fluctuations in the exchange rates of Egyptian Pound, Kenya Shilling, Nigerian Naira and South African Rand…


Factors Influencing Cost of Research in West and East Africa:

So why is research in Africa so expensive?  The key contributors (as identified by members of East Africa’s local research body but relevant across Africa) include:

POLITICAL UNCERTAINITIES

  • Political & social instability
  • Project specific research permits required by many governments
  • Complex / ambiguous tax laws
  • Government corruption

INFRASTRUCTURE

  • Lack of utilities / basic infrastructure
  • Low internet penetration
  • Poor telecommunications
  • Crime / insecurity
  • Inaccessible rural areas

ECONOMIC

  • Booming / fluctuating demand
  • Currency fluctuations
  • Inflation
  • High staff costs / turnover / training
  • High travel costs
  • High communication costs
  • Corruption

CULTURAL & SOCIETAL

  • Multiple local  languages
  • Lack of education / literacy
  • Some markets view research suspiciously

RESEARCH RESOURCES

  • Lack of experienced / qualified staff
  • Small pool of researchers with high turnover
  • Briefcase researchers giving research a bad name
  • Poor secondary data resources
  • No syndicated studies / panels
  • High price / availability of technology

ACCESSIBILITY

  • Hard to reach groups
  • Top-end – too much security so hard to access
  • Bottom end – no security for interviewer
  • Rural – poor road access
  • Some markets difficult to access (visas, direct flights, work permits)

After evaluating all of these it is easy to see where the money goes and why the African research agency struggles to grow.  Having little control over issues such as infrastructure or government policy, researchers need to direct their attention to what they can change.  For example:

  • Focus on bringing more young people into the industry and building research as a credible career
  • Work with universities to build research skills and create awareness of research as a career option
  • Build accreditation schemes for research staff at different levels to encourage professionalism and quality control
  • Build stronger relationships with clients and be willing to educate the clients on the realities of Africa

Highlights prepared by Margit Cleveland and Jane Delorie

The Potential for Social Media Marketing in Nigeria

Although Internet penetration in Africa as a whole is still at a low 8.7% (85 million users), growth rates are phenomenal; between 2000 and 2009, internet penetration grew by 1,810%. In Nigeria, in the same period of time, internet penetration grew by almost 12,000%. Internet penetration stood at 16.1% by the end of 2009; there are now almost 24 million Nigerians surfing the web. In fact, 27% of all African internet users are Nigerian. With fibre-optic cables coming online, this growth is expected to continue. But already the internet community in Nigeria exceeds the population size of Ghana; thus, marketers should seize the opportunities opened up by this new medium.

Connectivity remains an issue, however. Wireless connections (71%), mobile devices (30%) and GSM modems (27%) are the most commonly used modes of access. Cable, such as ISDN or DSL, or Vsat remain the exception. Dial up connections are still in use; as are cyber cafes and business centres, which also often make use of dial up connections.

Even without the frequent power cuts, connections tend to be erratic and unstable. Users complain that they spend more time establishing a connection than they do actually surfing the web. Another complaint is the high cost of accessing the internet, especially on mobile devices.

Despite the obstacles, Nigerians are enthusiastic about the internet: 82% connect at least once a day; 25% are connected around the clock. A minimum of two hours is spent surfing the web per day.

Being online has profound effects on users. For one, the internet is perceived as a valuable resource: knowledge, entertainment, opportunity to make friends and expand one’s network, and, last but not least, opening up new career opportunities.

But perhaps more importantly, the internet is perceived as liberation from social norms and strictures; i.e. the internet opens up an opportunity for self-actualisation without fear of censure. Curiously, users are content replacing their offline friends with an ever-growing circle of online friends and connections. In the long run, this will undoubtedly lead to a questioning of social norms that guide and confine social interaction in traditional society – in short, modernisation and cultural change from within.

Slow connections had a definite effect on browser shares. Microsoft’s Internet Explorer is used by 51% of the global internet community; in Nigeria, it comes in at just 28%. The leading browser is Mozilla’s Firefox with a share of 45%. Google Chrome attains 20% in Nigeria vis-à-vis just 8% global share. Not only are these alternative browsers faster than Internet Explorer; they can be customised to block out advertising and heavy Flash animations. This, of course, has implications for online marketing, as traditional advertising with banner ads and other adaptations of traditional print advertisements will have limited reach. Online marketing in Nigeria, however, could be rendered effective by embracing the concepts of social media marketing; i.e. initiating a dialogue with members of the online community on popular platforms like Facebook.

Participating in social networking is the single most important activity among Nigerian internet users: 95% are members of one or more social networks. Among these, Facebook is the most important with 93%. Twitter and Linked In achieve 22% each. What is the potential of a social networking strategy for engaging consumers in a dialogue with marketers? To this end, we conducted a Facebook monitoring exercise, recording activities on our private pages for a period of one week.

At first glance, the results are disappointing: the bulk of activities revolves around status updates and announcements. Facebook is used to keep tabs on one’s circle of friends and to enlarge it. Communication then occurs via instant messaging. We found no evidence of Nigerian consumers engaging with brands or corporate entities. A dialogue has not begun. Does that imply that Nigerians do not engage at all?

When Goodluck Jonathan launched his profile on Facebook, the response was overwhelming: more than 100,000 Nigerians have become his fans, posted tens of thousands of comments in response to a mere handful of presidential posts and updates. Collateral Facebook groups have already been established. Other examples of Nigerians engaging can readily be found. As such, Facebook already has become a valuable resource for monitoring the political mood in the country, as we literally hear “the voice of the people.” So, why do we not see a similar development for consumer engagement? The answer seems to be that marketers have not even begun to explore the opportunities of social media marketing.

Giants in the FMCG or telecoms industries may well maintain global corporate profiles and/or brand pages on Facebook; yet, the point would be for companies operating in Nigeria to seek the dialogue with Nigerian consumers. We checked the Facebook presence of Cadbury’s Bournvita, Nestlé’s Milo, Cowbell, Peak Milk, Globacom and MTN. Although MTN maintains a local business page on Facebook, this page suffers from blatant neglect. Globacom’s local business page is more successful in providing content; it, therefore, attracts more fans than MTN’s page. And yet, Globacom has only taken first steps toward social media marketing: official website and social media pages are poorly integrated, as if Globacom management still needed convincing of the potential of social media marketing. The very fact that Nigerian internet users have taken the initiative to establish an unofficial Globacom fan group, however, demonstrates consumers’ readiness to engage.

At this point, it is well worth reiterating that the size of the Nigerian online community is 24 million; thus exceeding the entire population of Ghana or Cameroon; i.e. markets that would not be ignored in traditional marketing. There are opportunities for social media marketing.

The success of using social media would not be measured in direct sales; rather, in the quality of engagement and user experience, ultimately resulting in enhanced loyalty. Unlike traditional marketing with unidirectional advertising, social media platforms enable dialogue. Therefore, brands are no longer positioned by marketers; brand positioning evolves interactively through a process of co-creation. Social media marketing at its best involves consumers in the process of rejuvenating brands and maintaining brand health. This, of course, requires re-orientation on the side of marketers.

In the final analysis, the question is not whether Nigerian consumers are ready to engage, but whether Nigerian marketers are ready and willing to enter a meaningful dialogue with consumers.

Overview of African Research Industry

ESOMAR Global Market Research Study 2010

Since it began publishing annual industry reports, the year 2009 was the first time that ESOMAR recorded a global industry decline. Compared to the previous year, the market research industry shrank by 4.6%. The least affected region was Asia Pacific, with a moderate decline of 2.2%; while Europe recorded a massive 5.9% loss.

At first glance, the Middle East and Africa region appears to have been the worst affected with a decline of 10.2% against the previous year. Actually, however, there are many positive developments in the Africa region to qualify that negative first impression.

On the global scale, Africa remains a minor player in the market research industry, with a market size of 265 million in 2009, which accounts for less than 1% of the global industry (28.9 billion).

Developments in Africa
The ESOMAR Industry report covers only a handful of African markets; country data are available for only South Africa and Nigeria. So, it is important to bear in mind that ESOMAR coverage of Africa remains fragmentary at best.

[read more – ESOMAR Global Market Research Study 2010 by Jane Delorie & Margit Cleveland – 262K – PDF]

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