It may sound boring, operational, and tactical, but your distribution plan is perhaps your greatest opportunity to magnify the potential of your business. If strategy is the answer to who, what, and how, we spend too much time debating our “who” and “what,” and we give the “how” insufficient credit.
Consider a few examples. By shaving 10 minutes off your taxi wait time, Uber, a company whose mobile app efficiently connects passengers with drivers, is disrupting taxi companies in major cities throughout the US.
Redbox, a McDonald’s invention, saves you 10 minutes of iTunes searching by putting a DVD kiosk in your grocery store. With this simple concept they’ve grown to 36,000 locations; 68% of the US population lives within five minutes of a Redbox kiosk.
My point is, removing just a little time from the path your product/service follows to reach your customer can create a radical advantage, open new markets, and unlock latent demand.
The creators behind Wikipedia, Salesforce.com, WellPoint, and innumerable other innovative companies owe their success to rethinking the process the world had accepted for distributing their product/service.
In Paraguay a few months ago, I came across the most inspiring example yet. Fundación Paraguaya (FP) is one of the oldest microfinance programs in the world. It now serves over 60,000 clients from 20 offices throughout its country. They give loans, train people in entrepreneurship, and build self-sufficient schools.
I was teaching a class and got a chance to steal away one morning to witness FP’s work. Fifteen minutes after FP’s general manager, Luis Sanabria, picked me up from my five-star hotel, we took a few zigzag turns off the main artery, and our truck arrived in a dense urban village you might mistake for a Brazilian favela. We walked up a dirt road littered with rocks, narrowly bordered by half-finished houses, and came to a group of 15 women sitting in a circle. An FP representative was conducting a monthly training for this group of clients.
Sanabria explained that each woman had borrowed working capital from FP to jumpstart kiosks, ice cream shops, or small home-based restaurants. They were now business owners.
But the fascinating part of the FP program came next. The survey.
For years, FP surveyed its clients using clipboards and pencils. Each survey took three hours. What I got a chance to witness was radically different. FP had partnered with Hewlett-Packard to create a visual app (see a video here) that FP representatives use to show clients sets of pictures. One set may represent three ways of accessing water: dipping a container into a river, pumping a well, or turning on a tap. The client taps the image that represents how she gets water.
Their primary objective here is not the obvious one. Ostensibly they are measuring levels of poverty across different dimensions such as access to water, quality of shelter and access to schooling. While they are doing that, the real impact they are having is opening up new opportunities in the minds of their clients.
Leland Stanford, the founder of Stanford University, once said, “Man cannot create what he cannot imagine.” And what this survey, now empowered with an act, is doing is helping clients imagine new possibilities.
As Sanabria shared with me, the woman who clicks on the image of dipping a container into a river for water sees a picture of the tap with water coming out. She starts to wonder, “Why can’t I have that?” This awakens in her the motivation to go after that vision for herself. Since entrepreneurial success depends as much on drive as on skill, instilling this drive accelerates entrepreneurship and self-sufficiency.
Changing how they conduct the survey, using an app rather than paper, creates two powerful advantages. The high-quality imagery helps them better visualize what is possible. And since they can conduct the survey in 20 minutes instead of three hours, they multiply the number of clients they can serve nine-fold.
I witnessed this myself. A group of women, holding FP tablets, clicking on pictures. Though they had never touched a computer or smartphone before, the experience was natural and intuitive. Twenty minutes later we left 15 smiling, bubbly, entrepreneurs excited about the future.
The power of this program really hit me as we walked back down that rocky dirt road to the truck. The FP representative turned to me and explained, “You may not have noticed it but we were standing in that woman’s kitchen. The dirt floor covered by a tin roof had a hole she had dug. She burns wood there to cook. Hopefully, she saw the picture of a proper kitchen and is starting to think that she may want that for herself.”
How can you take out a step, shrink the time, or find an alternative path to get your product/service to your customer? What new markets, currently out of your reach, would open up if you did that?