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South Africa’s Capitec Bank – Discovering Customer’s Problems

capitec-bank-01bwAs a young man growing up in the Northern Cape I learnt early on that by observing customers you can learn a lot regarding what problems they have. It just so happened that a friend of my father was manufacturing leather belts. At the time I thought it wise to try and sell these belts. So on a cold yet bright Saturday morning, while the other kids were out on the cricket field, there I was, a scrawny looking little fellow stuck in between vegetable and samosa stands.

Looking back at this I think it was a miracle that any customers saw me at all, yet I was smiling ear to ear when a rather large looking man edged closer to my stall. “Will any of these fit?” he asked rather doubtfully. He then proceeded to take the longest looking belt and stretch it over the universe that was his stomach. My smile faded quickly as my first customer left rather disappointed.

Not knowing anything about how to determine the needs of customers, I proceeded to encourage quite a few more large specimens to come on over to my stall and fit what I told them to be the best leather belts in South Africa. During the day I observed much pulling, stretching and even twisting, but very few sales. My belts were too short. By midday, as the other stands were packing up, I decided to call it quits.

At the time I thought that there was no market for leather belts. Unfortunately, I did not think this through. All of my potential customers were interested in finding a belt. None of the regular belts in the clothing stores fitted them. But rather than observe this and learn, I put it down as a failure and stopped selling leather belts. Had I realised there was a market for long leather belts I would have been a much happier young entrepreneur.

We can learn so much from Customers. Not only from their responses to the questions we ask them, but the questions they ask us and most of all we can learn from observing their behaviour.

Years later, I had the opportunity to meet the founder of a new South African bank. I was just completing my Masters at university and had studied quite a lot about strategy in banks and insurance companies across the world. Sitting down with this Entrepreneur I soon discovered that very few banks really understood their customers well.

The discussion started with the entrepreneur asking me a simple question: “When a person who does not have a lot of money wants to withdraw money from the ATM, what do they do first?” The question was so simple, but I had never thought about it.

Seeing that I did not have an answer the Entrepreneur replied: “Well the first thing they do is check their bank balance.” Then he continued: “All banks in South Africa charge people money to check their bank balance, but we understand the needs of our specific customers, we are starting a bank that will focus on the needs of the poor in South Africa.”

The name of this Entrepreneur was Michiel le Roux, the founder of Capitec Bank. Capitec Bank is now South Africa’s fastest growing retail bank with more than six million customers.

Great Entrepreneurs have one thing in common. They really understand their customers, they learn from observing their customers and the problem their customers are facing, and they set out to solve these problems wisely.

Wybrand Ganzevoort
Wybrand Ganzevoort is the Managing Director of Collective Value Creation, a company that develops Entrepreneurs in the Southern African Region and has a specific emphasis on Enterprise and Supplier Development. Wybrand is a regular columnist and speaker on Supply chain diversity and has a passion for aligning strategy and execution within Small and Medium-Sized Enterprise (SME) companies.
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PHOTO: Capitec Bank

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