First Bank of Nigeria is an eminent banking institution. It has top-rate managers and arguably one of the finest companies in Nigeria. But recently, First Bank is making statements that confound any careful observer. The latest one is its plan to add 16 million customers in the next three years, by broadening its digital marketing. Since 1894 (note “8”), the bank has added only 14 million customers till date. Then in three years, it will magically add 16 million new customers. The bank is not clear on how it will execute such an audacious target that may risk making the managers look weak in a scenario they fail..

First Bank of Nigeria Ltd , one of Nigeria’s pioneer financial institutions, has said it is currently broadening its digital marketing initiatives in a bid to add 16 million customers to the present 14 million customers.

According to Dr. Adesola Adedutan, FirstBank’s Managing Director/Chief Executive, said this is part of its growth strategy to get 30 million customers over the next three years, and to migrate its existing and new customers to alternative channels, namely First Online, Firstmobile, USSD and ATM cards.

He said,“We have a focus of building our customer base to 30 million in the next three years from the 14 million we currently have. That is the way forward for us and we are making significant progress already.”

First Bank is not a Nigerian political party. I hold the bank shares. I make time to know what is happening in the bank. But recently, First Bank is talking like APC and PDP. Sometimes, the bank makes statements without supporting insights. If anyone believes that First Bank will add 16 million new customers in three years when it took it more than a century for 14 million, I have a bridge to sell that person.

The bank needs to know that it may need to first buy other big banks like GTBank and UBA before it can get closer to 12 million new customers (most customers have multiple bank accounts so if you sort  and combine them, the number of unique customers will drop from a combined total). GTBank has 8.3 million customers. UBA has about 8 million customers. If you combine GTBank and UBA, you may get about 12 million unique customers. Of course, First Bank cannot buy GTBank, the reverse is more plausible. First Bank is worth around N207 billion while GTBank is worth about N1.12 trillion in the Nigerian Stock Exchange excluding its listing in Europe.  So, I do not know where these 16 million new customers will come from within three years for First Bank if big acquisition is not the path.

In short, it is nearly impossible, using today’s data, for First Bank to execute this target. The total number of unique Nigerian bank customers is less than 30 million. (It could have gone up, but not certainly more than 40 million.) Yet, a bank CEO will tell the world that it can get 30 million customers. If you subtract the 14 million customers First Bank currently has, what will remain is 16 million customers. Simply, if First Bank should succeed, on this target, it does imply that every Nigerian bank customer must have an account with it.

It is estimated that the Bank Verification Number exercise which links customers with their biometric data like facial features and fingerprints generated about 25 million unique customers in Nigeria. Those 25 million customers accounted for about 45 million bank accounts in Nigeria.

The numbers are relatively poor for a country of more than 180 million people. For the banks to get their next 30 million customers, they need to improve their games

We need to become a country that is more fact-based and common sense-driven, especially in an industry that holds the economy. Banks must speak with common sense. They are not political parties. In U.S., analysts would have challenged First Bank to show how it will get to this huge customer base. But in Nigeria, no one cares. The press just reported it and moved on.

Of course, I concede that the digital marketing can target more than 80 million Nigerian adults who are not yet in the banking sector. That is mathematically possible. Yet, I do not know how many of those 80 million people anyone can reach digitally within three years. But First Bank may have its strategy in the vault; 2021 will tell us how solid it is. But for today, I find it incredulous because the basic elements of the markets do not support such level of growth.

Apple transformed the mobile telephony consumer market by changing the basis of competition. Through the new basis of competition which elevated the industry, Blackberry and Nokia were destroyed. Apple became the industry category-king and the world’s most valued company.

Apple did that through pioneering innovations via products like iPod, iPhone and iPad. The world responded. Apple saw glory and triumphed. The stock price went through the sky. Legends were made. Steve Jobs became a demi-god with disciples from the Himalayas to the Kilimanjaro, and from the Mississippi to the Shinano.

Then Apple started incremental innovation. The bold disruption is gone. When that happens, we can return to agriculture, picking a lesson from the law of diminishing returns:

In economics, diminishing returns is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.

The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant (“ceteris paribus“), will at some point yield lower incremental per-unit returns

In most agricultural science examples in Nigerian secondary schools, fertilizer was always what was to be added while the land was always held constant. What the law means there is that there is a limit that adding more fertilizer to a piece of land can continue to improve your farm yield, In other words, after a time, despite adding more fertilizers, the yield impact will be negligible.

For Apple, adding more of incremental features on iPhone will get to a level where the impact will be negligible in the stock price. The incremental feature is the fertilizer here and wowing users is the land. The output is the stock performance. (There is a negative return in Apple stock over the last few weeks, and not just flat. When the law of diminishing returns is extended for a long period, the marginal output is always low. But again, negative return over a short time does not say a lot of things. For Apple, it is negligible). Fortune Newsletter has a good summary on this:

Shares in Apple hit an eight-week low after a report suggesting weak initial demand for the iPhone X. Fortune‘s Don Reisinger dissected that specific story skeptically, but market sentiment has clearly turned cautious since the launch of the X and iPhone 8, amid fears that they will cannibalize each other’s sales and, more specifically, that the X’s $999 price tag is too ambitious. At a little over 17 times trailing 12-month earnings, the stock has a curiously old-economy feel to it all of a sudden

But do not bet against Apple yet, it has a record of turning this diminishing return into an abundant return.

In the end, the iPhone 7 turned out to be a big seller, and Apple ordered the remaining supplies a couple of months later.

In other words, Apple’s iPhone X component strategy, as reported by Digitimes, wouldn’t be unique. It could merely be a strategy that it has followed in the past, and that Apple just wants to avoid forking out too much money for parts

We do hope for iPhone X to find success. iPhone 8 has been unable to start the carnivals for the Apple fans. Where iPhone X also fails, then you can be talking of a diminishing returns.