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Turning customer improvisation into innovation

Developing MarketsTurning customer improvisation into innovation

by Konstantin Kolesov

Sometimes big companies run out of ideas. The market moves on, competitors invent more interesting new products and services, and entrepreneurs introduce new business models that suck the value out of old ones and leave price reductions as the only response. As we know, reducing prices with the same costs leads to lower margins. As margins deteriorate, so do companies.

In the digital world, a steady flow of new ideas is critical to a company’s survival. Given the overwhelming scale of big players in mature markets, is there room still for growth and innovation, the kind of innovation that breathes new life into existing products and develops new and exciting products and services?

Developing markets, where many can now afford what is considered a middle-class lifestyle, offer considerable opportunity to mature companies looking for new customers and growth.

Middle class consumers in developing markets tend to be younger, more diverse, and less affluent than their counterparts in developed economies. Importantly, they are willing to improvise, using what’s cheap and available in different and unexpected ways.

How can you listen to music on a mobile phone without a digital music player on the device? A few years ago, VimpelCom’s customers in Tajikistan found a way around this problem. You just need to subscribe to a Ring Back Tone service (where you enable melodies instead of boring beeps), ask someone to call you, turn on the loudspeaker on the phone (without an MP3 player) and immediately a room is filled by your favorite tunes. Want to hold a party? Set up different tones for your friends and they can all get involved in the process. The DJ just needs to choose who is calling next! Just imagine the key message to promote this service – ”Be the most popular DJ among your friends!”

Personalized numbers are very popular in developing markets. An example from Kazakhstan is a number containing just sevens: +7-777-777-7777. Why are customers willing to pay for these so called ‘golden’ numbers? Is it to make them easier to remember? No, actually they want to show their mates that they are special to own a number like this, similar to personalized license plates in the West.

The same is true in Tajikistan where people are obsessed about getting the “coolest” number. And the trendy guys go even further by having similar numbers for their mobile and car license plates. As most of these numbers are already issued to subscribers, newly born traders now try to buy these “golden” numbers on the second hand market. So, you should not be surprised if you get the call in the middle of the night with an offer to sell your number that is on someone’s wish list.

Another service that is increasingly popular in Tajikistan is a Balance Transfer service from one mobile account to another. Most customers use this solution to top up the balance of their relatives when needed. But what if you live in a far-flung village, with no cash machines, banks, mobile stores, or fixed line Internet? The only way to communicate is by mobile phone. For example, in a remote village, one person goes to the nearest town to top-up his balance. Just beforehand, the whole community brings this person their monthly savings in cash to include in the balance top-up, and he then transfers the individual “deposits” to the mobile accounts of community members. Over time it becomes a business for some people. That’s how local markets begin to understand and develop ”homegrown” Mobile Financial Services.

Have you seen improvisation at work? Any ideas about how you’d take existing services or products and use them in new and different ways? Please share them with us.

1 COMMENT

  1. BORING BUGS
    Posted 2 years ago - 0 reply

    can’t agree more!