> Posted by Barney de Jongh, Acting Group Head of MFS, Ooredoo Group

It’s amusing to see that whenever we take a new mobile money service to market the same old sales mistake is made over and over again. The only difference is the local lingo in which it has been conveyed.

So if you were in a duka in 2010 in Kigamboni, Dar es Salaam, close to the ferry, or if you were in a farmasi in 2014 in Sukabumi, West Java, close to a busy market, chances are you would have heard mobile money sales people tell the same narrative to shop owners. “This new service called mobile money will soon be printing you money. All you have to do is a few registrations, a few cash-ins and a few cash-outs. Now see, for month one, you already have Tsh 100k / IDR 700k (US$ 50) in your pocket. By month six it will be US$ 300 equivalent and by month 12 easily US$ 600 equivalent. Look at your airtime sales results. Look at all the customers outside your shops. This will be a piece of cake. We will train you, we will even give you the equipment, a log book, branding – and voila, you are in business.”

Do our beaverish sales agents stop to do a 360 degree look (ok more like a 270 degree look) around the store? Does the trained eye look at not only the content of the stock on the shelves, but also at the total estimated value of the stock? Does it glance up to see the slow moving items at the top of the shelves? Before even speaking to the owner, does the sales agent do a calculation to see if the total estimated value of the stock even puts the shop owner in a position to have the minimum investment for upfront e-money purchase? What about minimum liquidity levels? Does the shop even have fast enough rotating stock?

Let’s take a step back and put ourselves in the shoes of the shop owner. Firstly, he/she may be a small business owner, but he/she did not get there because of lack of business savvy. Ask them which stock moves fastest, or ask them which makes them the best money per unit and how often they have to replace certain items. I bet you Tsh 100k / IDR 700k they will have answers faster than you can say mobile money. They also know which items don’t move at all or move at a snail’s pace. Why do you think some items are only an arm’s length away and others almost need a broomstick to reach? See, these shop owners very much live in the tangible world, a world far away from your new mobile money service. So when you ask them to sell mobile money to customers, how does this translate into a ROI on the tangible goods in their shelf space?

(click to enlarge)

From the picture at right, we can see that sodas are the items on the owner’s shelf space on which the owner makes the most profit. For Tsh 162,000, the owner can sell 240 sodas a week and at a unit profit of 450 Tsh, he/she can make Tsh 108,000 gross profit a week. More so, the owner has received tangible goods in return for his cash. Sometimes suppliers even collect cash on sales made. The real question is how often do we look at the profit and loss statement (P&L) of a duka, spaza, or farmasi through the eyes of the shop owner. If we have a compelling enough argument that mobile money can replace slow moving or unwanted stock as a much wanted stock item on the shelf space then perhaps we are speaking the shop owner’s language.

We are expecting the shop owner not only to invest money in upfront e-money and to keep minimum levels of e-money float, but also to keep certain minimum amounts of cash available. In the beginning, this is potentially a foregone opportunity for the owner. Perhaps he could invest in other stock in his shop that he knows will sell.

Often as mobile money sales agents, we also overlook the nature of the shop’s business. Does the nature of the business allow the owner to spend the relevant time with the new mobile money customer? Oftentimes, we are too concerned with earning commissions and closing the sale at any cost, even if it means we come back after a month and the agent demands his cash back.

Until such a time that we have learnt to do proper shop assessments, have our sales agents trained to have the right conversations and ensure that the shop owner’s P&L forms part of our agent value propositions, chances are good we will be repeating the same mistakes in new markets. So to the new mobile money markets out there, let us try to learn from the mistakes of those that have gone before us.

Image credit: Accion

Have you read?

The Hold-Up with Mobile Money in Nigeria

Regulatory Considerations for Latin America’s Mobile Money Market

Five Ways to Get Frontline Staff Excited about Mobile Money