In South Africa, most large corporates have what we call Mass Market Syndrome. The first signs of this syndrome manifest when these institutions realise that they have sold products and services to customers but do not have intrinsic knowledge of who their customers are and why they buy their products. This often results in millions being spent on a contextual marketing campaigns and product development with abysmal outcomes.
It is time for a throw-back! In 2015, the gross domestic product (GDP) in South Africa grew by 1.3 % — this was 0.5% down from the previous year’s growth of 1.8 % in 2014. Around this time the informal sector in South Africa was sitting around R650 billion, about 2.5 times the size of the agricultural sector in our economy which was about R263 billion in 2015. Given the decline in growth over a sustained period after the artificial 3% boost of the World Cup in 2010, we were faced with the reality that Waka Waka with all the joy it brought could not entice the GDP-gods to look favourably on our economy.
At the present moment, our captains of industry find themselves at a crossroads with a central question focused on how to grow bottom-line profits and serve the Mass Market, which to many is the new growth frontier for their businesses. To fully understand why this has become a syndrome, we will have to take a brief detour to medical science.
The definition of a syndrome is a collection or set of signs and symptoms that characterize or suggest a particular disease. As we go through our diagnosis there are two questions we need to ask, what were the symptoms and how do we treat this syndrome moving forward?
Symptom 1 — Experience
The trap of experience when it comes to business is that your entire thesis of the future is based on what has been and not what could be. So when corporate executives began focusing on the mass market they never renewed their minds but most importantly they did not renew their sight. Aristotle once suggested that ‘the way you see the problem is the problem, not the problem itself.’ At a fundamental level, the symptom was experience mixed with an unrenewed perspective.
Symptom 2 — Situationships
Sam Walton, one of the most prolific businessmen of our time, had this to say, “There is only one boss. The customer. And he can fire everybody in the company from the chairman all the way down, simply by spending his money somewhere else.” In many ways, this is very true of what has happened to companies who have failed to listen to their customers. They have not only voted with their absence but with their wallets as well. The Mass Market is aware that in the context of the broader economic debate on consumption, they are the demand line that corporates need to understand and if you don’t take the time to get to know them, they will leave you. This is manifested most acutely in both the fast moving consumer goods and financial services sectors of our economy. We are seeing giants falling, many of whom apparently feel led on by consumers who have no intention of dating them. If only they had anticipated the signs and taken note of the blue ticks and the late replies these corporates would have called instead of sliding in the DMs (also known as direct messages).
At iSpani, we’ve helped our clients realise that the longevity of any brand or business is largely contingent on how you make your consumer base form part of the story of your company.
Symptom 3 — The curse of abundance
In economics, the concept of allocative efficiency brings to bare the reality of the third symptom. This is a state where ultimately production is a representation of consumer preferences where the last unit in terms of marginal benefit to consumers is equal to the marginal cost. The reality is that most businesses are not allocatively efficient, that is to say that in terms of their output they are not representative of consumer preferences. They are a representation of assumptions made in the boardrooms of privilege far removed for the reference groups that influence the buying decisions of their consumers. Due to high cash reserves, corporates can continue to invest in a contextual product development and live in the safety net of cash reserves until some start-up which listens and learns with focused intention disrupts them and wins their “beloved” customers over.
The following are our prescriptions from the iSpani Mass Market specialists team.
- Listen to understand and not respond — most companies are reactive to opportunities and do not listen with the heart to respond with understanding.
- Prioritize Mass Market Insights as a key component of your Mass Market strategy. You will need to stay constantly informed on consumers’ changing needs and preferences.
- Build indigenous capital — even global brands need to stay relevant in context, for example, KFC in Shanghai serves fish and not just chicken. In essence, we are saying KYC! (Know Your Customer).
- Data-Driven Insights is the only way you can de-risk your outcomes as a business focused on the Mass Market.
Data-Driven Insights is at the core of what we do at iSpani Group. You may or may not choose to enlist our services, but we are definitely saying that you need to prioritize Mass Market Insights as core to your strategy. We have done work for global brands which have de-risked millions of dollars in investment on the continent as a consequence of taking the time to listen and understand.