Walter Chabala
Managing Director
Applied Knowledge Publishers
Safaricom, big data, and the birth of Fuliza – that’s my story for today. In today’s evolving digital age, data & data analytics continue to emerge as a transformative force, reshaping industries and driving innovation at an unprecedented pace. In fact, new product development remains one of the most profound areas where data analytics is making a significant impact.
Fuliza (a household brand today) is a mobile overdraft facility that enables consumers to proceed with their transactions even if they are short of money in their e-wallet. The service was launched in January 2019 by Safaricom, and just like Mpesa, it continues to take on a life of its own. Picture this: Fuliza hit one million subscriptions within the first week, while its loan book hit KSh1 billion. Should I scratch that? I think I should. Fuliza hit one million subscriptions within the first week, while its loan book hit KSh1billion.
So, how did they do it?
Big Data
According to Forbes contributing columnist Lisa Arthur, “Big data is a collection of data from traditional and digital sources inside and outside your company that represents a source for ongoing discovery and analysis.” I think amongst the myriad of definitions of Big Data, I like this one – simple and comprehensible.
In the period preceding Fuliza’s launch, Safaricom was home to 28,850,444 million prepaid customers, 1,093,197 million post-paid customers and a total of 29,943,641 million total customers as at September 2018. During the same period, the number of active mobile subscriptions in the country stood at 46.6 million. Therefore, Safaricom’s global market share stood at 64.2 percent. I put these numbers out there so that we can make crisp sense of what we’re talking about. So, in their register, you and I and millions of Kenyans had Safaricom as custodians of our data. Being tech-centric, these guys love data. Not just Safaricom, all tech players. However, as Lisa puts it, what makes the difference is how one uses that collection for ongoing discovery and analysis.
Within the same period (Jul-Sep 2018), Safaricom recorded a total of Ksh. 1,585,729,101,317 (15.6 billion USD) as the total Value of all Mpesa transactions. With this data and data collected over stretched periods, Safaricom invested in it. They put in their time, human, and other resources to analyze all the data; I’m talking big data analytics here, and this is what their research found. The findings showed that millions of transactions were being canceled every day because of insufficient funds. And with all things good research, you don’t stop at the findings; you proceed to make sense of it. So, Safaricom saw the need of providing a facility that will enable that person to have that transaction completed, and boom! Fuliza was born to solve a specific consumer problem.
Through big-data analytics, Safaricom was able to uncover hidden patterns and correlations and unearth other insights that bore the product Fuliza. Organizations today have big data, but many either lack the capacity to harness the knowledge to understand what it is, or some are just caught up in the matrix and are unable to extract value from it. But worry not, this is a perfect local example where we can pick and learn from because this is the present and the future. The future lies in the organizational capability of harnessing big data and using it to identify opportunities.
Understanding Consumer Behavior
In their journey, Safaricom was intent on understanding the guy on the other end because that’s where the true magic lies. You can’t sell to me what I don’t need.
Remember Maslow’s hierarchy of needs? If not, let me share a short story. Back in 1969, while the rest of the world was partying, this guy was studying monkeys. He found something interesting with monkeys; monkeys always made sure they quenched their thirst before looking for shelter, and they always ensured they had shelter before looking for love, friendship, or companionship.
Moving on, he also took time to study humans. Similarly, humans cared less for love unless they felt secure; they were uninterested in control unless they felt respected by their peers. Long story short, this is how Maslow’s hierarchy of needs was born. A framework that has been used by marketers over the years to profile consumers and make meaning of their choices by understanding their motives, their influences, their cultural backgrounds, rationality, and beliefs. It is basically a theory of human motivation.
In their pursuit of consumer insight, Safaricom’s Fuliza sought to understand both the market needs and what the consumer wanted. It is here that companies gain invaluable insights into customer preferences, purchasing patterns, and pain points.
Doing the right thing & Doing it right!
“The insight behind Fuliza was the fact that 58 percent of transactions that failed due to insufficient funds were completed within two days. This showed that there was an unmet need where we could come in and help our customers complete their transactions, even if they lacked funds at the time,” Safaricom’s late Managing Director Bob Collymore.
Safaricom’s appetite for continuously transforming lives through product innovation kept their fire burning, and developing Fuliza was both doing the right thing and doing it right. Not just for Safaricom, but for the two underwriting banks as well. For them, Fuliza offers an opportunity for customer acquisition and additional high-margin income streams as well. It is a win-win for all: the customer, the banks, and Safaricom.
Big data, data analytics, and Safaricom’s good grasp of the two turned and continue to turn Fuliza into a gem of a product. The same remains a treasure reference script for new product development across industries.