We arrived at the woman’s home in the early afternoon. Getting to it involved walking down narrow alleys rich with the aroma of food being cooked on an open grill mixed with the stench of sewage and refuse. Young men who clearly had nothing better to do on a Tuesday afternoon eyed us suspiciously. Children raced up to get a glimpse of the unusual site of Caucasian visitors. We passed by roosters in cages that were gearing up for the afternoon cock fight.
We were in a depressed area of the province of Rizal, part of the sprawling city of Manila in the Philippines, conducting field research with a local company looking for new growth opportunities. The customer we were interviewing was so-called “class E,” with a household income of less than $2 a day. She was an important member of the community, though, as she helped the township of about 400 families (some of whom were legal occupants, others who simply squatted) obtain basic utilities and deal with common problems.
Not surprisingly, the woman’s small residence lacked many modern conveniences. But on the wall we saw a picture of one of her sons dressed up for a school picture. We asked what she did to support his education. She proudly began to talk about how she had a prepaid wireless broadband card that allowed him to access education via the family mobile phone. We then asked her what else she did with the phone. She told us how she was on Facebook and had about two dozen friends.
The famous Maslow’s hierarchy of needs teaches us that people at these income tiers ought to be concerned primarily with physiological needs (food, water, sleep). Those concerns exist, of course, but the explosion of technology in all corners of the globe means you see behavior that might surprise you. Another class E customer we visited had a 36-inch flat-screen TV and a karaoke machine.
There’s an important lesson in this for innovators seeking to create new growth among customer segments that don’t constitute the core of today’s markets: If you don’t go, you can’t know. It’s easy to make incorrect assumptions about customers you don’t really understand. Reading about these people certainly helps, but until you sit across from them and watch them go about their lives, you have very limited insight.
Scott Anthony is the managing partner of Innosight.