Informal economies harness, institutionalise customer experience

WHILE a supermarket chain can have a customer care department responsible for answering queries and harvesting feedback from diverse customers, informal agricultural markets in major African cities have different ways of gathering customer experience. They use their collective knowledge to maintain customer service for diverse commodities. Each market can have more than 100 years’ worth of collective knowledge held by vendors, traders and many other actors who have honed creative ways of improving customer experience.

CHARLES DHEWA

Informal agricultural markets have different ways of gathering customer experience

The power of a shared purpose

African informal markets rely on diverse actors who share a common purpose, which keeps everything hanging together. To that end, the customer journey experience is distributed among many traders. The customer base cuts across all classes, gender, age and income levels.
Vendors and individuals who walk into the market tend to be some of the most critical customers. In fact, vendors provide fine-grained insights on the preferences of final end-users. Those who buy in bulk for on-selling to other markets also bring rich insights from their own immediate customers. If a seed company wants to know whether housewives are satisfied with its new tomato variety, vendors have the most reliable answer.

However, due to the variability in data and activities, some service providers in informal markets face challenges in delivering a great experience. They cannot get oversight about the consistency of customer experience, because such experiences are distributed among traders and each informal market has its own rules. As a result, most decisions by policy makers and service providers tend to be based on incomplete agricultural customer journey experience.

Institutionalising customer experience

There is enormous potential for innovative African youths to create knowledge hubs for identifying, capturing and sustaining customer experience. That is how business models with capacity to sustain agricultural economies can be developed. Harmonising such experiences will improve the efficiency of markets and value chains as well as manage gluts and shortages. At the moment each trader understands his/her business so well to the extent of making adjustments in line with consumer demand in terms of what to buy and for whom. However, an undocumented, collective customer response practice sometimes leads to less demand compared to supply and vice versa.

Adjustments at individual consumer or trader level play out in the whole market. Within a week, traders can predict the behaviour of all commodities in the following week. To that extent, traders are always ahead of farmers and suppliers. Being on the trading side, traders have to decide ahead of time. However, strategies by traders are only communicated to individual clientele farmers to the exclusion of everyone else. What happens to the rest of the farmers who have not built relationships with the market? A knowledge hub should consolidate customer experience for the benefit of all value actors. Based on trust, the knowledge hub can be informed by market actors comprising experienced traders, knowledgeable traders and specialists in various commodities who understand market niches, standards and requirements.

It is in everyone’s interest to smoothen information flow

In the absence of a knowledge hub, customer experience insights remain in the pockets of few Communities of Practice (CoPs) around one knowledgeable trader. Such CoPs cater for 30% of the farmers. That means more than 70% of the farmers who do have mentors in the form of traders blindly take commodities to the market auction system. On the other hand, while traders and farmers in CoPs may have a productive vantage point, they are not immune to the effects of gluts caused by information asymmetry that affects 70% of the farmers.
They cannot control the negative effects brought by those outside CoPs. Therefore, it is in everyone’s interest to smoothen the flow of valuable information.

The informal market is a mix of experienced actors, novices, opportunists and many other clusters. There is a growth path based on knowledge and experience. Traders have a way of managing gluts and shortages of particular commodities in the market by going out to fetch commodities in turns. That is why it is rare to find extended gluts of particular commodities such as potatoes in the market. When a knowledgeable farmer produces commodities without paying attention to the market, there is high risk of underpaying investment in knowledge. Concerted efforts to gather feedback directly from traders and consumers will enable farmers to build an accurate view of customer preference. When farmers focus too much on production excluding customer experience, they risk over-producing and surpassing the absorptive capacity of markets and consumers. Even if the farmer musters how to produce dozens of commodities, that knowledge is useless if it cannot be translated into income and better livelihoods.

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