Here's to the next billion consumers
Dublin mobile marketing company Brandtone is helping global brands win in emerging markets. They told Sean Gallagher how they do it
For most of us in the developed world, mobile phones have become a part of everyday life.
The developing markets of Africa, South East Asia and Latin America are no different. These markets are huge and offer sizable opportunities for those global brands who are capable of successfully penetrating them. Increasingly, these global manufacturers and large corporate entities are trying to figure out how they can possibly gain access to what they see as their next billion potential customers.
The challenge is that they do not, as yet, have a physical presence in these emerging markets - in terms of traditional retail and distribution channels. For that reason they have begun to look to mobile phone technology as a way of targeting individual consumers directly and thereby building market share.
This week I met up with two inspiring and visionary Irish entrepreneurs, Donald Fitzmaurice and Padraig McBride, who are working on that very challenge.
In 2010, they founded Brandtone, a firm that has developed secure and scalable cloud-based mobile marketing technology that is helping global consumer brands run targeted mobile marketing campaigns in developing and emerging markets. Based in Dublin and operating in 12 different countries, the pair already employ over 120 staff and have established themselves as world leaders.
"Our customers include over 60 well-known global brand names - Unilever, Kellogg's, Mondelez, PepsiCo, Diageo, Beam Suntory, Santander, Old Mutual, Fonterra, Syngenta, J&J, Kimberley Clark and GSK," explains Donald. "And we've also recently begun working with the Gates Foundation."
The 12 countries they operate in - South Africa, Kenya, Nigeria, Russia, Colombia, Brazil, India, Thailand, China, Vietnam, Indonesia and the Philippines - have three and a half billion people (half of the world's population!) and are now beginning to emerge as some of the fastest growing economies in the world.
"Big brands need to crack these markets. But many of these countries don't have a network of structured retailers and distributors," explains Donald. "Instead, there are lots of individually owned stores, so brands work with us to design and deliver highly mobile marketing strategies targeted at individual traders and consumers," he adds.
I ask him to explain how it works.
"For example, a mother in North East India goes into her small local roadside store and sees a bag of Sunlight washing powder. On the side of the bag is a message that says 'buy this bag and we will put credit on your phone'. In the bag, she will find a unique ten digit secure code which she then messages to us here at Brandtone at no cost to her.
"She immediately receives a return phone call from us with a pre-recorded message from a well-known Bollywood actress. This automated message asks her a series of three simple questions - if she is single or married, has she children, and if this is her first time to buy this particular product? Finally, she is asked if she is willing to allow Brandtone to retain her details so that she can be contacted in the future with other promotions or offers.
"Her mobile phone is then automatically topped up with extra credit - for example, ten rupees on a 100 rupee item purchase," explains Donald. "In that way, both consumer and brand achieve tangible benefits. She gets a direct cash reward for purchasing a particular product. From the brand's point of view, they have made a sale and also have that customers details with expressed permission to contact them again directly with future offers, thereby building strong customer relationships and enhanced brand loyalty," he adds.
Every time that a consumer redeems another code, Brandtone recognises their number and asks them different questions to the first ones allowing them build up a more detailed consumer profile.
Donald talks me through how the company recently worked with Unilever to promote Magnum ice cream in Indonesia. Instead of mobile phone credit, shoppers were offered coupons for clothing brands, reflecting the differences in the target audience there. While their marketing strategy may differ from region to region, the model remains largely the same; a person buys a product, answers a few questions and gets a reward.
I am surprised to learn that Brandtone make more calls to India in an average week than most small European countries.
"When we are doing a big campaign, we can make up to three million calls to India in one week alone," explains Donald. "It is part of our vision to build sustainable relationships with the principal purchaser in 1-in-10 households and stores in the developing and emerging markets by 2017," he adds.
It's an ambitious vision but it has grown out of significant experience and expertise of the two founders. Donald Fitzmaurice grew up in Dublin, attended UCD, did a PhD in chemistry, spent four years in Berkeley, California and the Technical University in Lausanne, Switzerland. Returning to Ireland, he became a chemistry professor at UCD, taught, did research and managed a team of researchers in nano-structured materials used in electronics.
"We were trying to make faster computer chips that could store more information on smaller spaces," explains Donald. "I also founded a nanomaterials start-up - and while ultimately this company failed, commercially, the experience was hugely valuable," he adds.
He was later headhunted by Draper Fisher Jurvetson (DFJ), a US venture capital firm who were setting up a new global fund called Eplanet VC, whose brief was to invest in companies specifically targeting the developing and emerging markets.
"During my seven years there we had some big investment wins that included Skype and Baidu - the Chinese equivalent of Google," explains Donald proudly.
When a company called Intivation came looking for help to develop solar-powered mobile phones for developing markets, Donald was so convinced of their potential that he joined as executive chairman. Three years later he was ready to consider going into business for himself. Around that time too, he met up with Padraig McBride.
Padraig, from Co Leitrim, had previously worked with Digicel as group chief financial officer for their eastern Caribbean region. Before that, he had worked as financial controller of a boutique US investment bank.
Their combined experienced convinced the pair of the potential of the emerging markets as well as the transformational nature of mobile technology. With that in mind, they established Brandtone in 2010 with Donald as CEO and Padraig as chief financial officer.
From their small office in Ranelagh and with just four staff at the time, they began by targeting their first market - South Africa.
"South Africa had a good telecoms infrastructure and they speak English so it seemed a good place to start," explains Donald.
However, as with all new ventures, their first challenge was to secure their first customer. That happened shortly afterwards when Unilever in South Africa awarded them their first ever contract - for €600,000.
They were now on their way.
Next, they began to expand their footprint moving into running marketing campaigns in Brazil and Russia. Soon after they began to move into the higher-value financial sector of insurance and personal banking.
"Some 80pc of people in Africa don't have a bank account but they do have a mobile phone," explains Donald. "So their phone offers options to do things like transfer money which they otherwise couldn't do," he adds.
Recently too, they developed their model to target not just individual consumers, but store owners and distributors.
"Instead of just having codes on individual products, we put codes on containers which go to retailers, so can target the store owners to stock specific items," explains Donald.
What next? I ask.
"Over the next few years, we expect consumers in emerging markets to spend more money on education and healthcare. We believe mobile phones will be critical to supporting and enabling this," says Donald. "At the moment, we are working closely with our healthcare clients to develop safe, responsible and effective ways of using mobile phones and big data to deliver healthcare at scale in these developing markets," admits Donald.
Will this definitely happen, I enquire.
It's an absolute certainty -what's more, we in Brandtone aim to be at the very heart of it," he says with a confident smile.
Donald's advice for other businesses
1 Bring something new
"In order to stand out in a crowded market, your product or service has to be offering something new. You either need to do something that is ten times better or ten times cheaper than your competitors. Your differentiator has to be significant if it is to work."
2 Do it
"In business, everything comes from having the courage to get started. While timing can be a help, there will never be a perfect time to start a business. You can plan as best you can, but there will still come a time when you just have to go for your dream."
3 Don't give up
"Resilience is the most essential characteristic an entrepreneur needs in order to succeed. You will face challenges every single day - and you must have the ability to endure the 100 days that are not successful in order to be ready for that one important day that is."
For further information: www.Brandtone.com
Sunday Indo Business