Safaricom commands roughly 70% of the market in Kenya, that is 70% of the 87% of Kenyans who are mobile phone subscribers. 12% of the Safaricom customers are youth, people whom according to the company are aged below 26 years.
However, with only 13% of the market remaining as the non subscribers, it means that to every Safaricom competitor, Safaricom’s customers are fair game. So far, the company has been able to keep its competitors at bay through a number of ways. But of concern was that customer loyalty didn’t rank highly among those factors. Two years ago, the company noticed that people signed up with Safaricom by default because it was big.
In a bid to form a more nuanced relationship with its customers, the company shifted to a strategy heavy in data;customer segmentation. It broadly divides Safaricom’s customer base into four categories based on average revenue per user, level of education, age and attitude towards life and aspirations. One of the categories is referred to as the Safaricom Youth Universe. It refers to all the youth within Safaricom’s customer base. They are further sub-categorised into “tweens“ aged between 10-17 and are considered minors, high potential students;aged between 18-24, tend to live within urban areas and a majority of whom can afford to attend, and are in, university, and the prudent young, also aged between 18-24, tend to be living within peri-urban and rural areas, didn’t make it to university but have high potential to succeed and are seeking alternative ways of doing that.
At 12% of Safaricom’s customer base, and a low ability to spend, one wouldn’t be surprised to learn they don’t rank really high in the company’s priority. However, what’s surprising is how integral they seem to be in Safaricom’s priorities. Besides, according to Marion Wanyoike, a Youth Segments Senior Manager at Safaricom, 12% is not that low.
“It is not necessarily low if you look at how many young people are allowed to own a SIM card. Around 8 million of the 27 million youth can actually legally own a SIM card, which is why the number looks small compared to other segments.”
However, the category’s greater significance comes from beyond the company’s current bottomline. Today’s youth are tomorrow’s non-youth. To have tomorrow’s non-youth spending on Safaricom’s products tomorrow, the company decided to engage them today, by mirroring their station in life, aspirations and general life outlook. It is an investment in a healthy bottom line tomorrow, and in that, the Safaricom Youth Segment is as important as the remaining 88% of Safaricom customers.
In line with its current strategy, the company embarked on an immersive study of the segment to figure out what defines them. They realized that besides freedom, they are seeking independence and significance.
“Millennials (& Post-Millennials) believe in driving more impact in the world than the previous generation,” Sylvia Mulinge, the Director, Consumer Business Unit at Safaricom, recently said in a press briefing. “They want to have access to an opportunity and find a chance to make a difference in the world”.
To attract and retain them, the company introduced a youth network called Blaze. Blaze’s strategy is to craft product offerings and engagement activities that will sync with these aspirations. Blaze is an opt-in network. However, if it were up to Safaricom, they’d rather have all the youth on Blaze. For Blaze to achieve it purpose, it has to keep those who sign-up on the network long enough to see their fortunes grow.
“For us, the bigger concern was how do you make sure when you are attracting them, you are attracting them more than the competitor, but more importantly, you are retaining them.” says Marion Wanyoike. “Remember these are 18 year olds. If you just create a market and they join and you do not engage them, then they will leave you after a while. They are not as stuck in their ways as an older consumer”.
It is a demanding strategy, as compared to other alternatives like sponsorships. However, Marion believes it is worth it.
“It is much more difficult, much more consuming. However, it is much more rewarding in the long run as well. It is much more soft skills, which, in the long run, do result in revenue, but ultimately, it also results in retention.“
So far, Blaze has more than a million customers, well past the company’s target. Brand Love with the youth has grown since the launch of Blaze. Brand Love refers to the frequency in which customers interact with the brand. Those who are on Blaze switch phones on more than they did before, which has resulted in them being on averagely two more days in month than before Blaze. Even general awareness of the brand among youth bases has grown.
There has also been an increase in amount spent on the platform.
“Because of discounted rates on data, we have seen an increase in usage. Because young guys are able to afford more data, they are able to do more with it. And you see, if you can afford more, you tend to buy more.” says Marion.