Monday, February 16, 2009

Social networking for micro-enterprises

If information is power, that means entrepreneurs here in Kenya are somewhat powerless.  They often can't use the Internet to do research, can't advertise beyond having a sign in front of their shop, and usually source inputs from their immediate area.  

Similarly, consumers are powerless without knowledge of their options in buying food, housing materials, schooling options, etc.  Without resources like 411, yellow pages, and newspaper ads there aren't many ways to gather information in order to make educated decisions about purchases.

How can these rural and slum businesspeople connect with customers and with each other?  This is the question I've been asking myself lately and have decided to come to you to gather your input also.

I've been getting kicked around by my colleagues for kicking around idea after idea that involves SMS or text messaging.  But this is the way everyone Kenya communicates and I think it can be harnessed in a way that benefits businesses.

First idea, our business groups (membership from 300-2,500) can offer an SMS advertising product to their members.  In its simplest form, a business could pay to have all the members of the group sent a message with their advertisement, help wanted ad, or special offer briefly spelled out.  Receiving text messages in Kenya is free so the only cost would be to the business being advertised.  At  2-4 cents per SMS (varies by service provider) that means reaching 300 fellow Christian business owners and their families would cost around $6-$12.

Second idea, because that may be a little expensive for members and possibly to0 broad an audience for an ad, there is a way to allow the SMS recipients to choose which messages they receive.  I've tested out some free software that manages mass SMS lists on a PC.   There is a feature that sends auto-replies when preset keywords are sent back to the original phone number.  One potential use would be to have businesses share one outgoing message with several brief headlines of their ads.  If a recipient is interested in receiving the ad, promo, special offer then he/she replies with the given keyword.  This triggers the auto-reply giving them the predetermined message.  This way the business being advertised is only charged for triggered auto-replies.  This reduces their costs, narrows their message to only interested parties and gives them a follow up phone number for future ads.


Third idea, take that model and turn it into a business.  Example, collect or buy a list of 100 hardware store owners north of Nairobi, then sell this service to paint suppliers, tool manufacturers, etc.  Keywords could also be used like Google does in their ads.  If a hardware store owner sends an SMS with the word Paint to the "yellow pages/411" number, paint companies can pay to be the one who gets to reply.  Messages could also be sent by multiple companies who have chosen that as one of their words. 

Fourth idea, requires phones with WAP capability, meaning it can access the Internet.  I've priced it and a WAP capable phone runs about $15 more expensive than the cheapest phone in Kenya (around $25).  This means that they are not completely out of the reach of the poor, who most already have a mobile phone.  With WAP, a Kenyan could download a Craigslistesque application where people could list and search for services, products, jobs...and all for free.  Not only would they work well for business groups, but they could also be set up for advertising within small towns, churches, even Nairobi.  They'd be mini-intranet sites.

The rest of the ideas involve the inner workings of CHESS, Gitithia and other business groups.  SMS messages could send headlines of their newsletter with replies giving members more information.  A message could be sent to all members that they can forward to friends and family encouraging them to join the business group.  A form of e-receipting for loan payments could be developed.  Also instant reporting of loan payments made at the rural branches.  Surveying members to get feedback and stats to measure the groups' effectiveness.

Well this post wasn't intended for me to give a laundry list of ideas it was to encourage you to email me or post ideas in the comments.  We're trying to think outside the box on ways for us to communicate with members, ways for them to get in touch with us, and most important: how members can better connect with other members.  Thanks in advance.

3 comments:

Anonymous said...

If the issue is advertising, could one not create larger billboards? They are relatively cheap to create and if you painted them (rather than expensive printing), that would be easy enough.

With SMS does that work with a population of limited literacy and/or different languages?

What about a way for people to send their business card via SMS?

What about gathering the data? Not sure how you get people to give that over (free giveaways?) but get basic info (phone #, gender, etc) and then market that data?

Anonymous said...

I have another idea for merging SMS and social media. Obviously, Kenya is a long way from adopting Facebook on a grand scale, but the principles still hold true. People trust their friends and hold them in a higher regard than businesses or brands. Therefore how could a business tap into that inherent trust?

Let's assume a smart business gathers all their regular customers' phone numbers to send out specials and sale notifications. But what if that business built in a referral/kick-back system?

It would work like this....

Tyler Hardware sends out a text message saying "Paint on sale" that goes to established clients and/or a purchased list of names and numbers.

Steve gets the message, but doesn't need paint.

Normally, he'd delete it. But if the message says "pass this along for a finders fee" (or something socially appropriate) then Steve might send it to 2 or 3 people he knew that are painters.

Steve would incur the cost of sending 3 messages, so he would only send it if I thought they'd buy (and he'd get the referral $)

Tyler's Hardware gets a much higher probability that he finds a customer and a sale at little additional cost. Tyler's hardware gets advertising that he only pays for iF it works.

When the new customer comes in (call him Mike), Mike shows the text and gets the discount.

Tyler writes down the new customer's number (to contact in future) and the number of where the text came from. Tyler then can send a text to the originator (Steve) saying that he can come into the store to claim his in-store credit.

This has two benefits. Steve may buy more than his credit is worth and because $1 cash is $1 reality, but $1 in in-store credit is probably only like $.80 in reality because of mark up.

Tyler could have a flat referral fee and/or a sliding scale depending on the business/sales/markup/etc. The minimum discount needs to be probably 3-4 times the cost of a text message so that Steve sends out multiple texts. (Obviously local conditions and markets apply here.)

Thoughts?

lydandty said...

Ideas sent by friends:

"I know it is a simple idea, but what about printing? It is probably more expensive than text messaging, but is it more effective? What about a printing coop. You would have to set up a business model where people pay for printing by paying for a membership and then getting prints at cost. You could even solicit donors for printers and ink to get started. It may give someone a career as a printer. I know that there are probably many print shops in Nairobi, but if you were to set up something that was self-sustaining in your organization, it might be effective...even leading to a business newspaper where people go to for advertising." and "I suppose you could start with a list of your
> organization's christian business contacts- requiring the businesses you
> support to provide you phone numbers- and then "sell" this list to all your
> other christian start-ups. These people would understand the importance of
> supporting these other new christian businesses, so they'd shop where the
> texts/SMS are coming from. Then the "word" would proliferate and the
> marketing would reach a bigger audience."