Tag Archives Marketing

‘DM for Prices’

Posted on 3 min read

One of the most frustrating things that people come across online is someone selling goods or services online and working hard to market them but does not openly display the prices of their goods or service. Instead, one is supposed to write them a message to enquire about the prices. Usually, there is a label that one should DM for prices.

Critics argue that this is tantamount to having a supermarket with goods very well labeled but with no prices. One picks something, then goes to the cashier to confirm the price.

That would be ridiculous.

But then, why do so many online merchants (especially on social media) run this model of business? Why are they not willing to openly display their prices so that people can make a decision quickly? Wouldn’t it help if the prices were open so that one won’t waste their time inquiring about goods and services which they cannot afford?

Turns out that this is not anything awkward, and it is widely practiced.

The Price is Never Fixed

At the local market where I shop once every week. The prices are not cast in stone. There is room to haggle over prices. The prices could change based on whether you are a ‘regular’ or a ‘visitor.’ The price changes depending on the time of the day. It also changes depending on the car you drive and the shoe you are wearing. Even the weather is a factor.

This is the exact opposite of what one would expect in shopping malls or supermarkets. Prices are fixed, and very transparent.

Many markets operate this model where the prices are negotiable. If you want to buy a shoe, the seller will encourage you to try it out and see if it fits. They will delay announcing the price in the hope that once you like the shoe, and it fits, you are more likely to buy it. Once they mention their price, you go ahead and bargain until both of you agree on a price that is fair to both of you.

The model is similar to what happens even with huge purchases like cars. There is an asking price, but the actual price that the buyer pays largely depends on their negotiation skill and many other factors. Even in public transport in Kenya, one needs to ‘discuss’ the fare with the bus conductor before boarding the vehicle, because it varies depending on many factors.

Risk of Turning Away the Buyer

In such a situation where the price is not fixed, the seller needs to be careful not to quote too low when a buyer is willing to pay a higher price or quote too high until the potential buyer is disinterested in the negotiation.

To guard against this, the seller wants the buyer to test drive the car first or even fit the shirt. Once they like it, negotiation becomes easier since the buyer has already invested some time and emotion into the transaction. They are more likely to buy the product.

I find the concept interesting, and it can earn you some great offers. It is not too different from the surge pricing adopted by Uber, or trading in the stock market.

Business on Social Media

When people move their business online, they carry the same principles they used in offline businesses.

Some merchants want you to get in touch with them so that they can let you know about the prices. They know that once you have started a conversation, you are more likely to buy. You are also likely to come back for a second time, and since they have your contact and know your interests, they can share with you more offers. This is the reason why they do not state their prices.

Unfortunately, social media is not a uniform audience, and hiding the prices ends up irritating some people. There are buyers who want to make a decision quickly based on the price, and there are those who want to negotiate a favorable price. It is not possible to please the two groups at the same time.

One, therefore, needs to weigh the risks against the benefits of the ‘DM for prices’ business model before adopting one.

But at least, if you want me to send you a message to enquire about the goods that you have posted, I hope that the price is negotiable, otherwise it does not make sense for me as the buyer.


Scaling up lessons from M-PESA

Posted on 3 min read

Building a good product is hard. Getting people to use the good product you have built is even harder. I have seen the careers of many developers come to an end because they thought that having the perfect product would mean mass adoption, only to realize that no one was interested in their apps. Why does this happen? Because it takes more than a good product to sell. It takes skills and effort to market, it takes marketing research, it takes money to advertise, and sometimes, it takes chance.

M-PESA was launched in Kenya at just the right time. First, it was a perfect product for a market where sending money to someone in the next town was as unreliable and as slow as sending a letter. M-PESA promised to change all that, and they did exactly that. But how did it get mass adoption in Kenya? Safaricom had made the onboarding process very easy, where one needed just a National Identification card. They also made it a big show, where everybody got to hear about it and curiosity was rife. With a good budget and advertising team, it was possible to enroll some people. However, past that Safaricom needed two things:

  • A critical mass of people to register for M-PESA
  • M-PESA agents being available everywhere

Safaricom had two genius techniques to achieve these two.

Getting the masses to register for M-PESA

Safaricom allowed one to send money to both the registered and unregistered M-PESA users. It was cheap to send money to registered M-PESA users, but expensive to send to money to people to people who had not registered for M-PESA. The implication of this was that before you sent money to any person, you had to confirm if they were registered or not. If not, you would ask them to find someone nearby who was already registered and send to them instead. This idea of receiving money through a proxy was not appealing, and this would be enough to make someone to register.

With that, Safaricom turned M-PESA users to M-PESA evangelists.

Getting agents in every corner

The success of M-PESA was pegged on availability of agents in all places. This is currently the reason why other mobile money platforms have failed to gain traction in Kenya, because you cannot find their agents. With M-PESA, you probably need to turn around to find an agent, that is if there is no M-PESA agent right in front of you.

How did M-PESA manage to get so many agents? The first thing was the revenue sharing model. When one sends money through M-PESA, they are charged some transaction fee. This fee is shared between Safaricom and the mobile money agents involved. For this reason, people realized that they could actually make money by becoming M-PESA agents, and soon every shop and stall added M-PESA agency services on the sideline.
Safaricom followed up by providing the necessary branding merchandise. An M-PESA agency outlet looked cool. With that, they now needed to vet who wanted to be an agent, as too many people were trying to jump into the train.


It was not that easy, and Vodafone cannot replicate the same fete elsewhere. The most sure way to know if your start-up or business will scale is simply to try it out.