Death by a Thousand Nos: Time to Put Profit Back on the Table With Fintech

Growing the Bottom Line by Helping the World's Underbanked through Mobile


By Steve Polsky, CEO, and Founder, Juvo

For the world’s unbanked, hearing the word “No” from the financial sector is something that they’ve grown accustomed to, even for the most basic services such as a mobile phone. No, you’re out of airtime. “No”, you don’t qualify to purchase a smartphone. “No”, you can’t finance a scooter to get to work. When someone is trying to build a better life, the number of times they hear the word “No” can be overwhelming. For years, the unbanked have either been ignored or underserved by the industry and, as a consequence, are forced to rely on cash or informal financial services which can be unsafe, inconvenient and expensive. This has not only created deep consumer distrust, but there’s also a direct impact on business.

Saying “No” to your customers over and over (and over) again is a sure fire way to kill off any conversation you were hoping to have with them, not to mention stopping dead any chance you had at nurturing brand loyalty for the future. Think of it like this, when you consider that fifty-six percent of the world’s population is unbanked or under-banked, representing almost 2.5 billion people in developing countries, that’s a large chunk of the market to be turning your back on.

There is an amazing opportunity to walk billions of people up the pathway of financial services through their mobile phones. Nearly 80 percent of the world is on a prepaid phone, but their usage is very different than in the United States. For example, as many as ninety-four percent of connections and eighty percent of revenue is found in the prepaid market in Africa, and every time someone is told “no, you’re out of airtime”, or “no, you don’t have enough money”, it’s handing them an opportunity to leave and go elsewhere.

The result is billions of dollars of company operator expenditure (OpEx) being wasted on acquiring and re-acquiring the very same customers that left them, sometimes only a few months previously. In fact, research from eight prepaid-dominant markets (namely Argentina, Brazil, India, Malaysia, Mexico, the Philippines, South Africa, and Thailand), suggests that on average, operators lose around fifty percent of its prepaid customer base every year.

Such a volatile subscriber base means operators are often forced to forego revenue to entice new customers in the form of promotional discounts and free offers. A short-term offer of free minutes, texts, data or content not only gives away what could be a revenue-generating activity, but it also perpetuates high churn, encouraging subscribers to think about switching providers when that offer expires. To put a dollar amount to it, operators wasted $670 million last year alone just in working to replace lost prepaid subscribers.

To stop this cycle of churn and put profit back on the table, operators need to think differently and adjust its focus from customer acquisition to customer retention, by encouraging loyalty in its users. That means operators taking advantage of every interaction they have with its customers to build deeper, more personalized relationships, where customers feel valued. Companies need to start saying “Yes” a lot more.

This ability to say “Yes” is going to have an impact on the whole world, and it’s working already!

Communications provider Cable & Wireless (C&W), for example, has seen firsthand the impact and the power of saying “Yes” to its customers. The telco partnered with Juvo to launch a solution to provide its prepaid mobile subscribers with airtime credit extensions via their smartphones and mobile devices. Since its inception, C&W has increased average revenue per user (ARPU) by ten percent and reduced its churn by fifty percent in less than 120 days. Most importantly, the company has given access to financial services for over ninety-five percent of users across the Caribbean – a region that didn’t previously have the means. By knowing more about its customers, C&W fundamentally changed its prepaid experience into one that is so rewarding, customers can’t be tempted by a competitor’s promotional deals.

It’s time to say goodbye to the word “No” because when customers feel more valued they are understandably more loyal, which results in a more streamlined, effective and ultimately profitable way of doing business. Not to mention happier customers are more likely to also make positive recommendations. By bringing the world’s unbanked and underbanked into the financial ecosystem, they’ll have access to more buying power and consumers. It’s simple. Next time you think about telling a customer “No”, think again. “Yes” completely changes the game.

About Steve Polsky, Founder, and CEO of Juvo  
Juvo establishes financial identities for the billions of people worldwide who are creditworthy, yet financially excluded. Steve founded Juvo with the mission to establish financial identities for the billions of people worldwide who are creditworthy yet financially excluded. Working with mobile operators, Juvo provides ongoing personalized access to otherwise unattainable financial services. Juvo currently provides services in 27 countries across Latin America, Southeast Asia, and Eastern Europe helping over 100M consumers build financial identities.