By Cynthia Alo

Edward Esene is a business startup coach and an innovation consultant with accomplishments in Nigeria’s startup space; among them, a certified management trainer and consultant at pan Atlantic University-Enterprise Development Center; the lead consultant and co-founder of PlusIncubation Hub, a leading tech hub and co-working space in Lagos; Co-facilitated the success of many notable projects including the Google Digital Skills for Africa, the Federal Government YouWin project, the Boost with Facebook, The SMEDAN Youth/SME Empowerment Scheme, The Entrepreneurship Development Programme of the German Agency for International Cooperation (GIZ), The Daystar Business Academy.

Excerpts

Let’s speak to some of the common sales challenges that face small businesses in the Nigerian markets. 

I think one of the biggest challenges facing the small business owners today in the Nigerian market is pricing. That’s one then two, substitutes; you are not the only person offering that product or service. We are practically swamped almost everywhere you turn with similar or competing products or services. So, first of all, you need to know that the consumer, they have options; so substitutes is a big challenge. The next one is pricing. Typically, you hear people say ‘oh they’re not buying from me; they say we’re too expensive, they say they can’t afford it’. So the price point is also a big challenge. And if you look at the other segment of the consumers, that pricing or the price is not their challenge. If you under-quote what you are selling they suspect your quality. I’m talking about HNI (High Net-worth Individuals) segment. If you give them something at the lowest price points, they will also not buy from you because they will say, ‘are you sure? This thing is too cheap, are you sure? So your pricing must be good and good can be rock bottom and also be specific enough to clarify any doubts if you’re speaking to a different segment.

As a small business if I want to run sales promotion how will I do that with little or no funds? 

One thing we say in marketing and sales is that it is either you sell or you die. There are several ways to know if your business is alive and doing well. One of such is revenue. So, one of the biggest criteria to evaluate, one of the important growth metrics today for a business is sales. We know big companies in Nigeria that their revenue is off the hook. Now for you to have that amount of revenue your sales must be ticking the right boxes. So if we don’t sell, we are going to struggle; the lights are going to go off. There is the hybrid way to do it both the old and the new platform to integrate both and there is a very expensive way to do it if you have deep pockets. So again, the free way; word of mouth, family and friends; These are very affordable, very easy to start and the good thing about marketing, one of the fundamentals of marketing is visibility. You need to get your ‘V’ in is a ‘VC’ approach, then get your ‘C’ which is conversation. When people don’t see you or hear you the chances that they can do business with you really is very low. So I’m not particular about selling as much as I can say about getting as much visibility as you can get. What are the cost effective platforms, what are the tools? They include WhatsApp, flyers post. Then how deliberate or aggressive are you? What channels do you have available to you? They don’t have to be all very expensive. Like I said, they are the almost free, easy to roll out platforms. 

What are the marketing strategies for a startup in a new line of business, especially where you have some established names. 

We’ve seen several use cases, several case studies. There is the guerilla marketing approach. If you’re coming up against the big dogs, you know, there is the very unconventional approach. We’ve seen brands use some of those. So the first thing is, where are my customers? Who are they and, where are they? So what media, medium can I quickly reach them? It could be social, it could be radio. You may want to get an influencer, influencing in today’s media is big. We call those share of voice. If I post something on my status or my social media, maybe 10 People 20, 50 maybe a 100. But we know there are some influencers that if they do that same content, just because of the crowd and the amount of following that they have it will reach thousands of people. So we need to look at all the different strategies whether within, in what we call the above the line and below the line. I look at big brands and what they are doing and I take lessons from them, look for a miniature version of their strategy and apply within my context. You go for their events and they give a very lovely branded T-shirt, you are just the billboard for that brand. I learnt that from some of the very big brands I worked for.

In the face of low purchasing power, and consumer resistance, price is a big factor. So how can startups handle this? 

The first thing is understanding. First understand your customers’ demography, then understand their changing tastes, appetite and purchasing power. Nigeria is a very funny environment. It is almost like an enigma. We have as much as 90 to 120 million poor people. But the good thing about that data from the World Bank is the fact that the poor people must survive. The data says you’re a poor person if you live on or less than a dollar a day and that’s about N700 or N750. So you multiply that by 100 million people. That money is available and must be expended within 24 hours. So that goes to my second point. The first point is understanding the market behavioral and their purchasing power but even at that there is what we call wealth at the bottom of the pyramid; the 90 to 120 million poor Nigerians still have  N750  to spend in a day. So the next thing is to look at who are the people taking that money from them. So we now go to what is called product development. You need to meet your consumers or users at their price points. A new product development emerges, it is called shrinkflation. So, instead of us to move up prices, we just shrink the products. Here you still price a product at N50 instead of N100 when the cost of production has gone up, but the product just shrank a bit and you can still make profit at the old price of N50. I can still buy what  I used to buy at that price but the shape, the size and the packaging has dropped a bit here and there.  

What are the competition options for startups 

Competition exists. Again, like I said, if you take any product you have several other providers. That is external competition. But there is also internal competition, that is competing within yourself, compete against yourself. If the rate of change happening outside your business is faster than the rate of change happening within your business, you’re in trouble. So what is happening in Nigeria today is that there are a lot of macroeconomic changes impacting the businesses. So businesses are expected to adjust very quickly; that’s what business is all about. So I said if the rate of change happening externally is too much too fast, and you cannot adapt, your business will suffer or practically fold up. So the smaller brands are struggling because of this. If you don’t understand the market If you don’t understand the timings, the seasons, you are going to struggle against yourself, against the market forces and close shop. So that’s competition, both internally and externally. 

Give us your advice on how startups can maintain or drive customer retention.

 Customer retention is an after sales Strategy. Basically it is showing care.  Customer retention is driven by genuine care. A lot of us make this mistake of selling and not keeping in touch or not following up. That’s a bad way to sell. We actually call it ‘fraud’. In sales we call it ‘dumping’. You are not calling or following up to up-sell or to cross sell; it is just caring and that’s actually retention. Just saying, ‘thank you! I appreciate because I know you could have gone somewhere else!’

What’s the place of digitalization in marketing? 

There is what is called the digital tech call so you just have to digitize. In the past, it takes 75 years to hit a billion dollar (by Standard and Poor); 75 years to make a one billion dollar company. Today is taking companies less than 10 years to do that. Technology can help you acquire more customers. Digital platforms can help you, automation is important, using a CRM is important, and also investing in cloud technology. You know protecting your customers’ data following up on them, those things can be automated. Reminders, follow ups, birthdays, emails all can be automated. Even a chatbots as simple as that is, an AI platform that can help you interact with customers even while you are napping or resting are possibility. So technology and digitization can help you manage your customer journey and help you grow and scale your business.