The Nigerian BOP: The gold mines under rated

I sometime read in a publication by Aljazeera around May, 2020 that over 40% of people in the acclaimed biggest economy in Africa – Nigeria live at the Bottom of the pyramid (BOP). The National bureau of statistic, also mentioned that more than 82 million of Nigerians live below its poverty line of 137,430 naira ($381.75) a year – Almost less than a dollar per day.

Upon reading this, it became clearer to me why organizations do not see a need to explore opportunities at the base of the pyramid – of course no for profit business will want to run at a lost. ROI is key for every growth or expansion. Again, I decided to research on the major types of customer an organization will need to stay competitive in today’s competitive market. Guess what I found:

There are five main kinds of customers: Let me give you a thumb up on each briefly:

 Loyal customers: Customers that make up a minority of the customer base but generate a large portion of sales. They are the most important segment to appease and should be top-of-mind for any company. These types of customers generally represent not more than 20% of a company’s customer base but contribute the majority of sales revenue. Loyal customers, as the name implies, are loyal and value a product heavily. In addition, loyal customers are likely to recommend the company’s products to other people. Therefore, it is important to solicit their input and feedback and involve them in a company’s decision-making process. Heavy emphasis should be placed on loyal customers if a company wants to grow.

Impulse customers: Customers that do not have a specific product in mind and purchase goods when it seems good at the time. They are the best customers to upsell to and they are the second most attractive segment (after loyal customers) to focus on. Impulse customers do not have a specific shopping list in mind and purchase products spontaneously. In addition, impulse customers are typically receptive to recommendations on products.

Impulse customers are second to loyal customers in the generation of sales revenue. Keeping these customers in the loop on new product offerings goes a long way in improving a company’s profitability.

 Discount customers: Customers that shop frequently but base their buying decisions primarily on markdowns. They play an important role in turning over a company’s inventory. Therefore, discount customers are a key contributor to a company’s cash flow. This type of customer seldom purchases products at full price and shops around for the best markdowns. Discount customers are resilient to upselling, are usually the least loyal segment of customers, and generally move on when better markdowns are available elsewhere.

 Need-based customers: Customers with the intention of buying a specific product. Need-based customers are driven by a specific need. In other words, they enter the store quickly, purchase what they need, and leave. These customers buy for a specific need or occasion and are hard to upsell. It is important to note that need-based customers can be easily drawn to other businesses. Therefore, it is important to initiate positive personal interaction with this customer segment in order to retain them. Converting need-based customers to loyal customers is attainable with proper positive personal interactions.

Wandering customers: Customers that are not sure of what they want to buy. They are the largest amount of traffic to the company while making up the smallest percentage of sales revenue. They have no specific need or desire in mind and are attracted by the location of the business more than anything else. These customers enjoy the social interaction of the shopping experience. Therefore, spending too much time trying to appease this segment can draw away from the more profitable segments. Although this segment generates the least amount of sales revenue, providing insightful information about products to these customers can stimulate interest and ultimately result in a purchase.

 The Gold Mines: BOP Customers are “Need -based” Customers

Considering the scares resources in the hand of the BOP customers and the insights I have gained through my work with them, they certainly will not spend their money on just any product. They are not easily moved or triggered by their emotions; they focus on their specific needs at a given time.They are not like the wondering customer, they know what they want neither are they impulsive. They can only be loyal if a product meets their felt needs. In most cases, regardless of the discount on a product if it is not meeting a need they may still ignore it.

Now, for organizations that have held on to the theory that it’s difficult to gain profitability/ ROI if they invest in the BOP market, I will like to say this, is not totally true. What I found true is that you could gain profitability/ ROI if your product offering meets the felt needs of the BOP customers. The right product with innovative distribution and marketing strategy turns the BOP market into Gold mines for your organization. Brands like Indomie Noodles, Cowbel l Milk and MTN have consistently proven that the 82 million people at the BOP Community is a Gold mines that should not be under rated.