With the steady rise of internet users in Nigeria, the country may fast be jettisoning the cultural hit-and-miss approach of SMEs to market entry, albeit taking on a more analytic approach.
More businesses have gone online in the last 24 months and with online retailers nearly hitting N100 billion in sales in 2014 alone, Nigeria’s internet economy may be singing a new song many must now dance to.
But for starters, today’s entrepreneurs must accept that we have been fully immersed into that once-talked-about knowledge economy. And while the customer is still king, data is now queen. Understanding the workings of algorithms, collaborative filtering and other geeky terminologies aren’t just for the tech entrepreneurs any more because you are now a tech entrepreneur, whether you sell car spares or bowls of ready-made stew.
The truth is, data on how buyers make decisions about your products, for or against, and how they judge those of your competitors are readily online now. And keeping abreast with these bytes of information will, more than ever before, keep you ahead of the curve or at least in the mix, if you must remain in business.
Collaborative opportunities for SMEs in the retail space have also become readily available on Konga and Jumia. A perfume seller in a tiny corner shop at Oshodi can now close sales with scores of buyers in Potiskum, Azare and Oron at the same time only with a few clicks. Why? Because the internet is the new marketplace and ubiquity is the new name of the game.
Novel products like ebooks are beginning to catch on trends on spaces like Okadabooks which writers can quickly take advantage of. Jobberman has also done justice to the traditional brick-and–mortar recruitment consultancy.
So what is your web plan for taking your business further?
Planning an entry into our multi-billion Naira internet economy, particularly in a way that helps your business develop a more direct link to profit while measuring buyer-behaviour – what works, sells, appeals, or doesn’t – should now be a major priority and here are two tips to help you:
1. Use a proof of concept testing approach
In scientific experimentation, researchers often use this approach to establish the causes of certain outcomes by altering one variable for the other, at a time. The new business terrain is much like this. With the internet, businesses can now establish proof of concept by analyzing data in order to understand consumer demand shifts, the price elasticity of the products they sell and collaborative buying patterns of their customers by simply tweaking their sales pattern over a period of time. For instance, a clothier can stock what buyers are more likely to purchase and vary it as fashion trends shift using this experimentation approach from data gathered online.
2. Dissect the data
After gathering data, the next thing you do is dissect it into groups and categories. For instance, for booksellers, E.L . James’ Fifty Shades of Grey has created quantum sales from its not-so-popular sequels, Fifty Shades Darker and Fifty Shades Freed since 2011. Buyers were typically, but not surprisingly, married, suave, upwardly mobile, working women. This feedback could be very important for a publishing business in Nigeria looking to publish a book that can sell upwards of 50,000 copies. Women! Nigerian working class women buy fiction books about romance and sexuality. Toyin Fabunmi’s Not So Happily Married might do very well as a book -if it isn’t yet in print – don’t you think?
Slicing customer data to match products with different categories of customers will save you precious time. It will tell you quickly – if you are in the perfume business – that female buyers will more often buy their preferred brands in the eau de parfum variant and male buyers wouldn’t care less if they were presented with the eau de toilette variant of their choice brand.
Remember, as an SME or startup trying to enter and win a foothold in the marketplace, the onus is not to look for perfect conditions through the data mining resource that the internet affords you but to use data in making better sales decisions. Don’t try to sell what you sell to everybody. Look for your niche. Mine data about its predominant behaviour and capitalize on it.
The internet remains the biggest leverage available to your startup. Take advantage of it and watch your business convert information into dollars.
In a subsequent piece, I will be sharing information on investing in market data for great productivity, so look out for it.