By Adejoke Adekunle
Half of the sub-Saharan population lives without access to electricity; a huge problem with an equally massive opportunity. However, for most clean energy companies, the business-centred way to define their “who” is – loosely – households and micro-businesses in rural and urban low-grid to no grid communities.
Sure, this sounds big, hairy, and audacious to investors, donors, and other strategic partners; it also represents the massive potential to uplift many lives out of poverty through access to clean energy. But a closer look into these communities through a marketing lens begs the question – who exactly are you in business for?
Picture a renewable energy ladder for a typical Nigerian man where you have solar light bulbs at the lowest level and solar business systems at the highest level. It’s pretty easy to hand this man, his friends and brothers light bulbs – it’ll probably be their first time seeing one or using one that relies on energy from the sun for use whenever they need. But as this man, his friends and brothers ascend the ladder, you start asking questions like – what kind of business does each person run? How does each person get entertainment? What does each person need more power for? The list goes on. What we see here is that as consumers climb up the ladder, the need for segmentation becomes apparent.
Segmentation allows brands to tap into subcultures to build hyper-targeted products with the potential to accelerate impact across communities. Indirectly, this approach also opens up growth opportunities for the myriad of players in the space.
Redefining the market
SHS businesses typically fall in this ambiguity trap – where there’s no clear definition for who the product package is best designed for. Customers struggle to see the product’s direct benefit to their lives relative to the price, and so these businesses get lost in this vicious cycle of customer education with little results to show for it. One argument can be that the market is price sensitive and not mature, but we do no good when we offer customers a product that promises to power a sewing machine and a laptop, or a product with a name the customer has no frame of reference for. The downside to this approach is an added friction to consumer adoption and longer conversion journeys.
Every business desires to capture the largest possible size of a market but what if the solution we need to truly scale off-grid energy adoption is for more businesses to heavily focus on sub-groups across several communities? Niching if you will. What if farmers, fishermen, mechanics, shop owners, schools, restaurants, barbers can each identify renewable energy brands suited to them? These off-grid businesses will naturally achieve word-of-mouth and social proofing at scale within a shorter period than they typically would trying to be a swiss army knife.
Reframing the problem
Consider these common barriers to solar adoption in the African market – consumer price sensitivity, high upfront costs, ingrained consumer habits in the use of dirty fuels, and limited technical knowledge – is there any chance we can reduce these frictions through segmentation?
For example, what if renewable energy providers repackage or rename product bundles for a specific customer segment? E.g. “Better Bachelor” for single men who’ll do fine with light bulbs, a phone charger, a fan, a clipper, and a TV; or “Tailor Made” for tailors who need an upgradeable solution to power sewing machines, fans, and light bulbs. We’d have largely eliminated the need for a consumer to understand technical terms like voltage and whatever else by signalling a “Plug ‘n’ Play” solution.
There are no doubts that there are several upsides to segmentation in the off-grid energy market; specifically – better product bundling, a more trustworthy brand, more powerful language use, clear use-cases, shorter conversion journeys, and faster market adoption.
Sure, a product bundle for bachelors might also be useful for barbers, and I’d say it’s okay to attack multiple segments at a time so long as you treat each one as its market. As a renewable energy provider, you won’t have to redesign your product from scratch, you probably only need to name it differently, and with each different customer persona in mind.
Some brands are already exploring segmentation through product bundling and naming:
- KeepWork has done an excellent job in their product strategy and the use of language to focus on working professionals.
- PAS BBoxx has a product bundle called Barber Solo, there’s no guessing who that’s for.
- The Lighting Africa programme in Nigeria, with its Omnibranches partnership, is a good example of how businesses can help customers think less about what solar products to buy based on their power needs.
- While there’s an opportunity with renaming the product bundles to provide a better frame of reference for consumers, Fenix product tiers and upgrades (by design or accident) reveal a strong leaning towards the family man.
Strategy is clarity!
Adejoke is the managing partner at VVM, a marketing consultancy focused on helping clean energy and Agriculture companies in SSA create more impact with modern and traditional marketing solutions.