How to Run a Successful Business in Ghana

Joining Ahaspora Menteeship: Was it worth it?
January 25, 2019

Kambey Akari recently came back home to Ghana from a whirlwind of a life journey that took him all around the world as a kid, teenager, and a young adult. A researcher with active interest in the sciences and math; structures and patterns, are also of great interest to him. He decided to actively apply his “abstraction lenses” to the world of business in Ghana, in an attempt to come up with a “formula” for the successful management of businesses in Ghana. This quest led him to visit several establishments in and around Accra, spending a great deal of financial resources becoming a “regular” customer, in order to observe how these establishments managed their businesses. In some cases, becoming a “regular” led to amazing friendships were forged. This marketing study lasted about 3.5 years and we are sharing in 2 parts. This post covers the first half.

PART 1

Akari writes – “I deeply contemplated the form this “report” should take, but given the anecdotal nature of this commentary, I’ve elected a very informal manner. The Ahaspora community has been a great resource for me, and the people that work with me, so, it is befitting that I exclusively share my take on what it takes to run a successful business in Ghana with Ahaspora.

There are three elements that I believe every establishment must have to run a successful business in Ghana.

  • Strategic product placement
  • Strong customer retention policies
  • Active referral culture

While these may seem obvious to most, these elements are critical in this part of the world by my estimations. Certain people may be able to get away with casual walk-ins, and marketing their products to anyone, and everyone. These people will typically fall under what I call “critical elements” such as food staples, health care services, shelter, and other elements that you must have to live a normal life. However, for people who offer what we call “consumer discretionary” products/services, which is what I see most people here typically tend choose for business – specialised restaurants, entertainment outlets, and other things that aren’t considered critical will fall in this category. Let your imagination run wild with this category. I will synthesize this idea in a very simple story.

Kwame & Ama decide to open a “vegan” store, and they therefore start an Instagram and Facebook page. They advertise this business to as many people as possible on social media, a few other avenues. Consequently, they have a lot of followers, and some interest from people. People trickle in, and they get a few customers. However, they do little to engage their customers, understand their tendencies, their likes and dislikes, and much less where they hang out, shop, and what type of employment they have. They sell to them as they would in any other regular business entity. Given their success, they go back to social media to advertise some more. After the initial excitement of the new vegan store has tapered off, their customer base shrinks, and they struggle to keep up with the expenses of their business, much less make sustainable profit.

What they should have done was to use social media to attract people who are interested in their services/products, and create a personalised CRM – a customer service “technique”, or any other method that focuses on strong customer retention policies. Once this is in place, people who are into vegan “stuff” will actively tell other people. As the good old saying goes “birds of the same feathers flock together”. One vegan would tell another, and soon they have a vibrant account of vegans to whom they can focus and tailor their products/services to. They would understand, and notice that these folks typically hang out at the Dubois Center farmers market on Saturday. Strategic product placement should follow based on her learned understanding of this market segment. After which the active referral system will work its magic in her favor, because of this enhanced attention to “vegan people”, this provision will lead to favourable referrals. This loop will cause them to scale accordingly, and structure their business to meet the demand of their most critical market segmentation. The primary contention people have to this boutique marketing approach is that it may leave out potential customers. I reply by saying that not doing this will leave out critical customers to which your business will not thrive.

These three concepts are critical to Ghana, because unlike the rest of the world, the number of people who are into specialised products/services is much smaller, more specifically, approximately a couple hundred people per business. My cursory understanding of the Ghanaian market is that it is simple, regular, and predictable. People aren’t as adventurous, daring, and crazy to try new things for no reason. I do acknowledge that the trend is changing, but it is still not consequential. This coupled with the hard economic times we have had to deal with, make it challenging for someone to try new experiences. There is simply a smaller base to play with for any market segment that you fall in, relative to the rest of the world. Therefore, a much more deliberate effort should be made to tailor experiences to specific groups of people.

If for every business in Ghana you have 5 people (up against 100 people per business for other countries around the world), your ability to stay relevant rests on your ability to have those 5 people constantly patronise your establishment, along with family, and friends. In other parts of the world, there is a higher likelihood that a more passive approach will still ensure that the 100+/- people end up at your business. The illusion of social media followers does not always translate into the revenue needed to keep up with high expenses in Ghana. High retention will.

This is not an exhaustive list of “things” to do, but something I have seen successful businesses in Ghana employ to their advantage. However, if you want a silver bullet (as most people want), it would certainly have to be strong customer retention policies. Key word – retention.

By Kambey Akari

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