5 Things About Poverty Your Boss Wants To Know, but Doesn’t Realize; Yet!

What if your business was missing it? What if you have been competing for clients that all of your competitors are also going after, but missing large opportunities with the under-served. What if you could walk into your boss’s office and tell him that you know of a way to massively increase sales volumes? Well, here are the 5 things about poverty that your boss wants to know, but doesn’t realize; yet!

1. The Poor are the Largest Untapped Market on Earth.
The US the population living below the poverty line is 47.8 million, those living at twice the poverty line is 108 million. That is 33.4% of the US population that earns less than $47,668 for a family of four. The unemployment rate is only 5.5%, so that means that the vast majority of people in poverty are working to earn an income. Globally, 84% or more than 6.1 billion people of the 7.3 billion on the planet live at an income level below the US poverty line. However, those that live in extreme poverty has reduced by half since 1990 and represents less than 10% of the world population according to the World Bank. So if you are not selling to people in poverty, you are missing 84% of the potential clients on the planet.

2. They have Cell Phones
75% of the people on the planet have and use cell phones. By 2020, 70% of the world’s population will be using smartphones and 90% of people age 6 and over will have a mobile phone of some kind.

3. They Pay More for Everything
Poverty communities often don’t have amenities such as grocery stores or banks. So purchasing products is often from a limited group of alternative providers that charge high fees for services we take for granted. So purchasing food from a small convenience store is more expensive than from a grocery store. Without access to banking services, you have to pay high fees between 3 and 20% to cash checks. Fees to borrow money often come with higher than 500% APR. $137 Billion was paid in fees and interest for check cashing and payday loans in US in 2014. It is very expensive to be poor.

4. You can Do Good and Have a Good Business
Many businesses that currently provide products and services to low-income people do so with limited competition and because of that can charge extortionist rates. The bar has been set very low with high prices and poor service. So any business that steps into the market and provides reasonable prices with quality service will be able to do good and still turn a profit. Doing good is good business.

5. They Think and Act Differently than You
This is the most important barrier to overcome. Know your customer is Business 101. This is especially true when you are targeting people in generational poverty because they think differently than you. They have different fears and motivations than those not in poverty. So to truly understand your customer you need to learn how they view the world and create products and services accordingly. Do some focus groups and hire a poverty consultant to help train you and your staff. (Shameless plug Understanding Poverty provides poverty consulting services)

Now is the time. Go tell your boss what they want to know about poverty, but don’t realize yet. Learn about poverty. Create products and services to provide to them. Capture a huge market. And do good. It’s just good business!

Reference Links:
Carmen DeNavas-Walt and Bernadette D. Proctor for the U.S. Census Bureau, “Income and Poverty in the United States: 2014” (United States Department of Labor, 2015), available at https://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-252.pdf

Pew Research Center - July 2015 http://www.pewresearch.org/fact-tank/2015/07/16/are-you-in-the-global-middle-class-find-out-with-our-income-calculator/

http://www.rferl.org/content/report-says-75-percent-of-worlds-population-have-mobile-phones/24648234.html

http://www.telegraph.co.uk/technology/mobile-phones/11646593/7-in-10-of-worlds-population-using-smartphones-by-2020.html

http://www.cfsinnovation.com/Press-Releases/CFSI-Study-Finds-$23-4-Billion-in-Overdraft-Fees-f