The unprecedented increase in mobile connectivity across emerging markets is captivating the world, and for good reason.
There is no shortage of reporting on the transformative impact of mobile technology in the developing world, and yet it's worth repeating. This year, the number of mobile-connected devices will exceed the world's human population. As I write, there is a 67% penetration rate on the continent of Africa. In Uganda, where we work, there were 14,760,923 connections in 2011, close to half of the population. And a new study from Deloitte and GMSA using Cisco data links information and communications technologies (ICTs) to national economic growth, showing that a doubling of mobile data use leads to an increase of 0.5 percentage points in GDP per capita growth rates. This is a particularly fascinating statistic, and in the years ahead planned improvements to broadband infrastructure will only continue increasing national productivity. In real terms, a 0.5 percentage point GDP increase in Uganda would amount to over $84 million.
But don't let the mobile hype of recent years fool you. We're still at the very early stages of realizing the full potential of ICTs to improve lives at the Base of the Pyramid (BoP). Many questions remain about how organizations across all sectors can leverage fast growing connectivity to create meaningful, sustainable impact. Last year, with the generous help of Cisco CSR Living Goods and technology partner Arthify built a pioneering mobile platform that attempts to do just that. Our network of 'Avon-like' micro-entrepreneurs go door-to-door selling a wide range of life-changing products like treatments for malaria and diarrhea, fortified foods, clean cook stoves, and solar lights. Our business-in-a-bag model empowers micro-entrepreneurs with all the tools and training they need to launch their own Living Goods franchise. What's the most powerful tool in their bag? A simple, feature-free mobile phone.
This deceptively simple device is quickly becoming the single most transformative tool for our success. Mobile phones are empowering our agents to earn more, delivering targeted health messages to clients, dramatically lowering our cost to market and monitor, enabling real time salesforce management and igniting social connections that drive impact and business success. All of these outputs collectively increase the pace and the success at which we improve the health, wealth, and productivity of the communities we serve.
Improving impact through highly targeted communications. We've built a robust client database of nearly every mobile number across the regions we serve, allowing us to target clients by segments, geographies, past behavior and health needs. Automated texts provide information relevant to each particular client, including drug adherence reminders, health education for pregnant women, child development information for newborn children, agent performance feedback, product promotions, agent performance tracking, clinic referral reminders, and client follow-up reminders. Marketers in developed economies, including myself, have been using customer segmentation tools like these for decades. But before the ubiquity of the mobile phone there was no way to deploy tightly targeted communication strategies in BoP markets.
Operational efficiencies through better, faster data. In the past, our agents logged all client visits, sales, follow up, and referrals on paper forms and management would wait until the following month to get last month's data. But the mobile platform gives us access to real-time, high-quality data on trends in diagnosis, treatment, product sales, product stocks, branch activity, and agent activity. Agents use their phone to submit reports from the field using simple SMS codes. Better, faster data means better, faster decisions and operational cost-savings.
Driving demand through innovative marketing. Despite the powerful promise of pro-poor products, the vast majority remain market failures for their inability to reach a critical mass of poor consumers. Strategies that tap into the strong social networks of poor consumers and facilitate word-of-mouth marketing are the most proven performers in BoP markets.
To that end our SMS platform enables us to deploy, manage, and measure targeted and time-sensitive marketing campaigns. For example, to promote a new size of clean burning cook stoves, we used SMS to power a simple customer referral campaign. We A/B tested the campaign with paired test and control markets. In the test markets, the SMS marketing campaign drove a 280% sales increase over control markets. Category halo effects were also evident as our test markets realized a 125% increase in cook stoves sizes not on promotion.
These innovations in mobile have not come free of challenges. Many of our agents share phones, so we've set up a program for them to purchase their own phones from us on credit. And electricity is far from ubiquitous and consistent in Uganda, so keeping phones charged is also an issue. To overcome charging issues, our agents have (and sell) solar powered phone chargers. Functional literacy has been a challenge as well, but our intensive hands-on training has helped our agents learn how to text like a teenager. Sarah Balisanyuka, our Mafubira agent, bragged, "In the beginning there were challenges, but now I've gotten used to the system. I send SMS reports faster than my written reports." Sarah's been "SMS Champion of the Month" for months on end. But earlier this year, she didn't know how to open text messages on her phone.
A huge global shift is in the process of taking place, and it's clearer than ever before that mobile phones are the single most transformative technology for development. We are continuing to expand our mobile platform and plan to integrate mobile payment, social networking, and CRM tools in the months and years to come to continue driving both economic and health impacts. Mobile technology is already a game-changer for Living Goods and the communities we serve, but we're well aware this game is just getting started.
Living Goods Goes Mobile
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