“There is no “deadwood” – after 3 months of no commissions, agents are put on a warning list. Then, if there are 3 more months of no activity, they are cut. Any issues of compliance will be dealt with severely – even small issues of customer overcharging.” – GSMA Mobile Money Sprinter 

“Our agents need to do at least one transaction within 30 days; otherwise, they might get cut. Also, if agents don’t earn USD100 in commissions in month 3, they are demoted and expected to be cut soon.” – GSMA Mobile Money Sprinter

The results from our 2012 Global Mobile Money Adoption Survey highlight the rapid expansion of mobile money agent networks, from 366,000 in December 2011 to 520,000 in June 2012. There are just as many mobile money outlets than Western Union points of sale globally.

However, as mobile money distribution networks are spreading speedily, maintaining high levels of agent activity is becoming a challenge.

Successful services closely monitor the activity of their agents

There is a strong statistical relationship between the success of a mobile money service and the average number of transactions its agents perform on a daily basis. This is not a tautology: in theory, successful services could choose to spread transactions across a large number of agents, therefore driving a low ratio of transactions per agent. On the contrary, a smaller service could have few but busy agents and a higher ratio of transactions per agent.

We found that on average, active agents of GSMA Mobile Money Sprinters perform 14.3 transactions per day and serve 275 active customers, compared to 1.8 and 95 for other agents of other services. Sprinters also tend to have higher rates of active agents (that is the percentage of registered agents that are active): 73% compared to 56% on average for other deployments.

Inactive agents have a cost and damage your reputation

Sprinters tend to monitor these ratios closely. Indeed, the fully understand inactive agents are costly in a number of ways.

First, there are the direct costs associated with recruiting and managing agents which will include the time spent by sales and distribution teams, cost of training, cost of agent materials including branding materials, POS, etc. Agents need to have a certain level of activity for a mobile money provider to recoup these investments in the channel.

In addition, inactive agents incur an indirect cost because their existence gives a bad image of a mobile money service. Inactive agents typically do not understand the service well enough, do not keep adequate levels of float and are not able to serve customers in an appropriate way. This leads to bad customer experiences and damages the reputation of the service provider and reduces the likelihood the customer will adopt or promote the service.  Unfortunately, it’s not too difficult to get a bad reputation, but it is a major challenge to turn a bad one good.

3 strategies to deal with underperforming agents

So how can you deal with your inactive agents? Here are three different strategies that can be considered:

• Agent segmentation: Mobile money services also benefit greatly from segmenting their agent base by geography, level of investment, volume of transactions, product mix, and other variables. These analytics can help distribution teams understand how to allocate their financial and human resources most effectively, keep your top-performers loyal, and deal with underperformers.
• Retraining inactive agents: Some agents may become inactive because they don’t understand the service and its business model well enough. In this case, retraining inactive agents could be helpful.
• Cutting inactive agents: Finally, mobile money providers should consider cutting some of their inactive agents. Seven sprinters have already dismissed some of their agents and / or master agents, and three others were planning to do so when we interviewed them earlier this year. Reasons for dismissal do not only include KYC infringements and fraudulent activities, but also low performance (based on agents’ volumes of transactions and revenues) as well as branding infringements.  While cutting your agent base may seem complicated, in the long run it is a better option than living with inactive agents.