In Defense of Marketing to BOP

One of the most refreshing aspects about moving to India was not needing to constantly explain the work I do. "Social enterprise" was always a bit of an enigma at home -- seen as profiting off the poor to some; and cute, charity work to others.

The downside of not constantly explaining my work, it turns out, is living in a bubble. This is especially true in India, where the majority of my friends have left lucrative jobs in the private sector to do similar work here. Visitors to our hospital are interested in how our model works, rather than questioning why a private hospital is providing services traditionally reserved for the government and charity hospitals. In countless ways (thank goodness!), as a field we have moved much beyond the black-and-white juxtapositions and "novelty" of social enterprise.

Yet of course the skeptics remain. Why are we charging for our services? -- would we still charge if we were given $20 million dollars? What does "marketing to the BOP" even mean and what are the ethics involved?

Passion is a funny thing. The field one is most passionate about should be the area where one can speak and debate most intelligently and articulately. Yet so often, I suppress the urge to just yell: "Because traditional aid does not work!!!!!!! DUH!!!"

So it was a bit of a nice surprise reading a blog from the Austin Center for Design. Upfront, the author flat-out writes: "I have to admit that the idea of 'marketing to the bottom of the pyramid' leaves a bad taste in my mouth."

Here we go.

But then I read:

"When Tricia Morente, head strategy and marketing at LifeSpring Hospital, talks about making the hospital a sustainable business rather than relying on a one-time cash infusion, it makes sense in the long run. What resonated with me was when she says turning it into a mutual business transaction not only empowers the customer (in this case a new mom) with choice, but also increases the responsibility of the hospital to provide quality service. They are working for-profit, but not for profit maximization."

So while we're on the topic, a few more thoughts in defense of Marketing to the BOP (a la Sasha Dichter's "In Defense of Raising Money"):

I vividly remember needing to convince the head of a Philippine microfinance institution that we should engage in client feedback and gain their input in the types of livelihood training the institution would offer. "Why?" he asked - "we know they like our product. They are coming." True. But also doesn't say much when you are the one MFI in the province. Fine for a monopoly, but clearly not where the field would remain in the future.

To me, "marketing to the BOP" means giving the BOP the same respect and dignity we give to other consumers in the economy. It means asking what their needs are, understanding the psychology of how decisions are made, and creatively providing a solution that uniquely meets their unmet desires.

Beyond my own desire to make an impact through social enterprise, intellectually this work is fundamentally more engaging than marketing to any other segment, for it involves the challenge and question of: how do we translate need into demand?

What the West often assumes is this: a "need" (e.g. for safe maternal care) automatically translates into a "demand"; yet the reality is this is rarely this case. A big aspect of marketing is spending time with the end users, key decision-makers, and family influencers, to better determine their pain points and corresponding desires. Contrast this with organizations who take a more paternalistic tone, assuming they know what's best for the end users of their product or service. In the private sector, such a company would go out of business. In the not-for-profit sector, all too often this mentality is perpetuated.

A final aspect is this idea of mutual partnership, ownership, and empowerment. There is a powerful scene in the Acumen Fellows documentary "The New Recruits", where kids in the Kibera slum tell Suraj something like: "You've made a promise! You've made a promise! You now have to stay." While this scene was just shown in passing, to me it expressed the implicit "elephant in the room" -- that donor priorities inevitably shift. What may be important one year may not be three years later, when project funding dries up. In contrast, social enterprises (like all businesses) aim to be going concerns -- running indefinitely into the future. This results in much more of a partnership in the community, who looks to you to still be there, twenty years down the line.

Working in a start-up social enterprise (which isn't much of a start-up anymore) is hard work, and it's easy to get focused on the challenges of day-to-day. So it's refreshing every once in a while to take a step back and re-remember what I'm doing here in the first place.