And you thought bottom-of-the-pyramid customers give less revenue!

Telecom is revolutionising the world twice over, and Afghanistan is no exception. Even the battle-scarred, poverty-stricken, ultra-orthodox Afghanistan rings out nearly quarter of a million calls every minute. When I first landed up on the dusty roads of Kabul to head the marketing function of a telecom operator, I had no idea that the ride will be such an eventful one. Honestly, the first 48 hours were depressing, to say the least. I had nearly packed my bags back to Bangalore. But I stayed on......why I do not know till today. And now I don't want to know anymore. 

Afghanistan is in a difficult bind, for reasons beyond the war and destruction. Its in the psyche of the people, the common man, wherein lies the enormous challenge. If the wars have made the Afghans cynical, the political establishment has ditched them of the right to even live in dignity. As a marketer one tends to find the first footsteps in a new marketplace among the common man. I am no exception. I have to thank my previous bosses, who instilled these thoughts, rather etched them into my mind. If one boss insisted I be at the call centre @ 6 AM whenever I had launched a new product (just to ensure that the Product Manager supervised the first 100 calls...only then one would know if the communication was after all effective), another one ensured that the marketing brain toiled on the streets with the sales force to know the reality. But these experiences came to benefit me only when I grew a little wiser and started heading a functional role. And how I wish now that I can take back the curses I had hurled at them then! 

Let's get back to Afghanistan. Discipline is as alien to an Afghan as finding a Buddhist monk in Kandahar! Logic makes no logical sense to the common Afghan. Almost all Afghans have a pumpkin-sized ego. Illiteracy is so deep rooted that newspapers have a circulation of just 5000 odd copies! But Kyun-ki-saas-bhi-bahu-thi attracts 10 million eyeballs every episode! TV has such a stranglehold on the lives of Afghans that even a marriage ceremony is held-up for half an hour to allow the invitees/families of the bride & groom to watch Tulsi unleash her charm! Though they revel all things Indian, including the kitschy & provocative ads, they also  have built-since-birth double-standards ingrained within them. Try airing an ad showing a guy dancing (not even a girl, mind you) and you will have a dozen calls from mullahs, ministry of culture and others landing up on your cell. Of course not congratulatory ones, if you thought so! Or try launching CRBT (caller ring back tone) in Kandahar; the taliban will respond the next morning by blowing up a tower! But there is an even bigger problem! Its the ruling class - the half-educated moneyed egotists who surround the powers-to-be and impose their stunted views on the already subdued common man. So next time you watch a BBC report on a social taboo, you know who to blame.  

It's a challenge to be a marketer in this environment. All your wisdom gathered over the years get tested. As a marketer you get boxed from all sides. The challenge is to keep yourself motivated. Only then innovation will happen. And that's what we did against all odds. This article is a proof of the success we have achieved over the last year and a half.

Conventional wisdom would insist that revenue returns from bottom-of-the-pyramid customers are far less than other segments. Especially in Afghanistan, where the average man earns only $2/day. A chance encounter with a poor old lady up on the hills was the trigger. She treks 15 kms once a fortnight just to talk to her son who stays elsewhere. And she would have skipped many a meal to save up the money. By all standards, call tariff in Afghanistan is expensive - an average of 10 cents/minute. Add to that $20 for a handset, and you have many millions in Afghanistan, for whom affording a mobile phone still remains a dream. That encounter and the successful 'sachet' business model of Chic shampoo formed the basis of this new product. 

There are a few realities we accepted without a question:

1. That the customer is technology agnostic - they want the cheapest call tariff and the best network
2. That they never keep track of their MoU. In their minds, its only a budgeted amount that defines their usage. Complicated tariff plans only puts them off.
3. That prospective users are skeptical about the new deals from the telcos. Communications from telcos hide more than they reveal!
4. That customers are never loyal - they are driven by convenience, dread by committment and live by deals. Yet companies need to pamper customers. 

Thus was born 24 Azadi! A daily rental product, ala the 'sachet'.This product was aimed at daily wage earners who earn just about $2/day. Subscribers can re-charge on a daily basis by paying 50 cents. And they get 50 minutes of FREE talktime. They are not allowed to carry forward their unused talk-time to the next day. We followed these two principles in designing the product:

1. Do not bundle the tariff plan. 
2. Let the subscriber define his/her need

In less than 30 days we added more subscribers than what we normally add in 3 months. These subscribers give an ARPU (Average revenue per user) of 2 times more than what the entire portfolio gives! This is what happened:

1. on an average subscribers recharged for 19 days/month. That they were allowed to choose the days when they needed to make a call, was the clincher. They felt no longer dictated by the telecom companies' bundled tariff plans.
2. the subscribers could use their 50 minutes anytime during the day - no peak/off-peak hours to be kept in mind.

But why did the ARPU increase instead of decreasing? After all the subscribers were mostly from the bottom-of-the-pyramid segment? And the ARPU increase was more spectacular in this segment than in the migrated segment. 

Post launch research shows that subscribers felt relieved that for once they were given a FREE HAND to make a choice. Traditionally, telco marketers decide tariff plans with bundled features. And subscribers needed to fit their requirements with whatever was available off-the-shelf. The way 'sachet' changed the shampoo habits of the poor in India, 24 Azadi did the same for the poor in Afghanistan. All tariff plans in Afghanistan were designed keeping in mind the needs of the middle-class. The ARPU lift happened because the poor felt the need to communicate even beyond the FREE 50 on-net minutes. Once we were able to break the perception of the call cost, the volcano erupted! Un-bundling helped in this case. And thus, in Afghanistan, where the poorest of the poor resides, the ARPU of the bottom-of-the-pyramid subscribers is more than the other segments. The pent-up need to communicate overshot every other need. Even the need to remain within the prescribed social strictures. In Afghanistan, where social interaction is at a minimal due to cultural restrictions and avenues for entertainment are limited, mobile-phone became the outlet through which the poor explored the world beyond! If one goes by Maslow's theory, communication has become a basic need, even for the poor!

Since then, we have launched a top-end variant of the product to great success. And we had to stop sales for a few months to upgrade the system! Otherwise, the network was getting choked!  By the way my driver, Humayun, changed the mobile number of all his relatives to our network. So that they can maximise the benefit of 24 Azadi. I am sure there would be hundreds of other Humayuns who would have done the same!