Time becomes more Precious

Consumer purchasing decisions meet at equilibrium between commodity costs and convenience costs. However, convenience costs are continually assuming more importance.

Customer convenience is at the forefront of the customer’s service evaluation, playing a major role in purchasing decisions mainly because convenience saves time for the customer. This should therefore be a major guideline in product development and marketing strategy.

There is an unlimited retail space created when your customers can access your product in front of their TV. This saves time that the consumer would have spent walking to the outlet, and the resources required by the retailer to create as much convenience by opening outlets at every corner. Therefore a win – win for both parties.

M-Shwari is a paperless banking service offered through M-PESA. It involves filling no forms, visiting no bank branches; it is having a savings account through the click of your phone in the comfort of your living room or office. ‘a product for everyone who feels banking should be hassle free’.

M-Shwari had over 640 thousand users just a month after its introduction and transaction value was one billion shillings by December 2012. This service targets the more than 15 million M-PESA users, with transactions of up to $41 million per day by the end of Dec 2011.

This is after the numerous banking innovations that the banking institutions have implemented over the years. A good example is agent banking which saw commercial banks contract varied retail entities to provide cash-in, cash-out transactions. The more than 44 banking institutions in Kenya shared 14 million formal bank accounts by Dec 2011.

HMV, a records tapes, CDs and videos store in the UK floated on the London Stock Exchange for £1 billion in 2002. They then diversified mainly into electronics and entertainment and ignored the online craze. Recently they went into administration and were bought by Hilco. In the same situation, Dish Network bought Blockbuster out of bankruptcy in 2011. Blockbuster downturn was caused by changing habits of movie watchers preferring the comfort of online movie stores.

Meanwhile Netflix has more than 33 million members in 40 countries enjoying more than 1 billion hours of TV shows and movies per month. Netflix started its business through online ordering and delivery of DVDs to live streaming.

My take is, if you want to maximise returns by increasing your profits through a large customer base, make it as easy as possible for your customers to access and enjoy your products. Understand your customer’s needs, by discerning all underlying patterns too see what is really important to the customer, in this case convenience.

Judy Mundia – Marketing Operations Executive