Framing the market.
Consumers, those who make up markets, are always looking for a deal that appeals to them.
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Companies are always searching for how to frame a better offer.
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The interaction of the two creates new business opportunities, markets.
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Sometimes, it doesn’t take much to find this intersection.
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What we hope will work with our proposition is that a very small procedural change will unlock a potentially huge amount of purchasing power for a portion of the population who would really benefit from help.
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We are looking for those people who qualify for social security benefits to route a portion of them to a special, ring-fenced, bank account.
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Banks should want to compete to get the biggest share of these assets which come every month and normally run down in a measured kind of way over the four week period.
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Financial institutions know that acquiring new cash balances has a cost, but this is normally amortised in a short space of time. The assets we are talking about offer potentially, and literally in many cases, the prospect of thousands of pounds of lifetime value.
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Normally, the account holder earns interest, often receives a joining reward and along the way incentives are given to promote loyalty. But value can be delivered to the customer in a variety of appealing, sometimes personalised, ways. Marketing departments fully understand the repertoire.
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Nowadays, firms cooperate along a value chain, often working collaboratively with those in other sectors through cross marketing programmes.
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Our proposition is about helping families get the most out of their food budgets. We expect that banks will work with grocery retailers to create attractive, competitive schemes for their mutual customers.
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These suppliers will gain a significant amount of data to help them continuously refine their communications. Direct messaging and social media will alert participants to offers which are designed to appeal to them.
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Customer mobilisation is the challenge. Recruitment is the first imperative. This will require ingenuity in the application process, flexibility in the way systems are worked and the participation of current organisations and individuals who are working to help families improve their lives.
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But the opportunities are massive. Currently as much as £23 billion of benefits go unclaimed.
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Many commercial organisations will rightfully regard this as a significant ‘market at the bottom of the pyramid’.
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We see the possibility of the creation of a brand new affinity club, working together to use their vast purchasing power for their common good.
In his book, 'The Fortune at the Bottom of the Pyramid', C.K. Prahalad argues traditional efforts by various aid agencies, national governments and civil society have served to mask the fact that the poor represent value-conscious consumers.
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To succeed, Prahalad argues this group needs support organisations to adopt an approach that involves partnering with them to achieve sustainable win-win scenarios. By implementing such an approach, collaboration between the poor, civil society organisations, governments and large firms can create the largest and fastest growing markets in the world.
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While Prahalad focused his efforts on the bottom of the pyramid in developing nations, today, many of his insights provide highly relevant guidance when considering programmes to support those facing food poverty in the UK.
Low-income markets represent a phenomenal, and typically overlooked opportunity for companies to drive growth, profits and to provide invaluable support to those in need at the bottom of the pyramid.
Prahalad argues that while most companies focus their efforts on the wealthy few and emerging middle-income consumers in the developing world, they should focus much more of their resources on targeting the billions of individuals at the bottom of the pyramid, many of whom are joining the market economy for the first time.
Prahalad has long argued that poor people around the world represent a 'vibrant consumer market, that this market could best be tapped with for-profit models, and the poor themselves had to be partners in the process'.
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By introducing the idea of 'merging profit with purpose', Prahalad challenged the established, traditional way governments and businesses addressed poverty.
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Within a growing landscape of CSR, ESG and the increasing realisation that 'business can be a force for good', encouraging further collaboration between private companies, support organisations and the poor can vastly improve life for the world's (and UK's) poor while at the same time, driving high ROI and profits.
The Bottom of the Pyramid proposition argues that "there is much untapped market potential within the world's poorest communities". For many decades, BOP markets have been ignored by marketers under the impressions that this group has very limited buying potential. Nothing could be further from the truth. BOP markets currently constitute almost two-thirds of the world's population and so, in aggregate they possess huge purchasing power. The same general principle holds true when examining the poorest groups within the UK's population.
