The Peter Drucker management aphorism, “You can’t manage what you can’t measure,” is a favorite of Yannick Lefang, the founder of Kasi Insight, an integrated marketing research firm operating in seven African countries. You could say it’s the raison d’être for his four-year old company focused on developing African consumer data.
“Better understanding of consumer data will influence African governments’ policies, help us innovate, enter new markets and make informed decisions about our overall ecosystem,” says Lefang, a former banker originally from Cameroon, speaking on the sidelines of the Afrobytes conference in Paris this past week.
A good share of the information used to explain African economies has been been top-down macroeconomic data, typically seen in the estimates and forecasts from major institutions like the World Bank, IMF, and others. Such an approach has been lacking, say a new crop of consumer research startups, including Kasi Insight, mSurvey in Kenya, and Opolox in Nigeria. They’re targeting an African consumer market estimated to top $1.2 trillion by 2020.
Much has been written about the lack of up-to-date consumer data in African countries, information that will help dispel the supposed mystery of these markets for international and local investors. Increased availability of data should help build trust and attract more investment capital.
Alongside macroeconomic data, a bottom-up approach to understanding local consumers will also give a more complete picture of how a country’s economy is developing and early warning signs when things start to go wrong. This is particularly important given how much African countries rely on their informal economies. Top-line numbers miss out on plenty of vital insight.
Kenfield Griffith, founder of mSurvey, says the mobile phone is one of few “formal economy” relationships for many ordinary Africans and sees it as an important tool to better understand consumers in Kenya. His company has developed near real-time consumer feedback via SMS with over 20,000 respondents. “The mobile phone provides visibility into this market so we’re honing in on understanding the voice of the African consumer,” says Griffith.
MSurvey isn’t alone in believing the mobile phone is a great tool for consumer research. US firm, Geo Poll, one of the larger consumer research firms on the continent, also uses mobile data to better understand customers.
Others firms are more focused on understanding the data. Soji Omisore is a former World Bank/IFC executive familiar with the frustrations of trying to develop the kind of intimate market insights expected in developed markets. He founded Opolox to address the problem. “The ability to extract insights from data using analytics helps organizations make better decisions as opposed to the usual high-level macro and demographic data which doesn’t provide the granularity of insights in which organizations can have confidence.”
Ultimately, the most immediate bet for these firms is to build a strong roster of consumer-facing clients by providing the kind of insight that corporates and operators often complain they lack, making operating in African countries more difficult than elsewhere. “The more you understand the consumer behavior the better the chance you have of grabbing a share of the wallet,” says Griffith.
Better consumer insight has a crucial role to play in government planning too, points out Kasi Insight’s Lefang. Kasi, which is in Nigeria, Kenya, Ghana, Cameroon, Côte d’Ivoire, South Africa and Tanzania, has used research panels of 1,000 consumers in each country to develop a monthly consumer confidence index in each country.
“By talking to real people and asking consistent simple questions we can get a good sense that consumers weren’t feeling very confident about the market,” says Lefang.