Across the developing world, retailers are selling solar-powered portable lamps that can meet basic lighting demands, reduce dependence on expensive and inefficient kerosene lighting, and contribute to important development goals like energy access and improved literacy rates.
Solar portable lamp companies must find innovative ways of restoring consumer confidence in their products after a flood of cheap, faulty models created a distrust of the technology (Source: OneDegreeSolar).
Small solar portable lamp companies are learning how to navigate the relatively unstructured business environments of developing countries, but a lack of consumer confidence in the unfamiliar technology is a serious deterrent to scalability. Confidence has been eroded further by the presence of low-quality lamps that mimic higher-quality products. To increase sales and improve both the social and environmental impact of solar portable lamps, companies must develop a dependable product and brand that is appealing to customers both familiar and unfamiliar with solar technology.
Gaurav Manchanda, an Indian-born entrepreneur and founder of One Degree Solar, found a new way to restore consumer confidence in a low-cost lamp that meets the standards of the Lighting Africa project. He developed a short messaging service (SMS) technology that both provides customer service and allows the company to monitor the social and environmental impacts of every lamp sold.
The use of mobile phone technology has skyrocketed in East Africa, and Manchanda’s development of a customer service practice that utilizes this unique market characteristic allows his product to penetrate markets previously characterized by uncertainty. Manchanda’s interest in tracking the social and environmental impact is based on his background in development work, but is also reflective of this market as a whole. Companies that operate in the solar portable lamp market are typically social enterprises interested in the triple bottom line of economic profit, social impact, and environmental health.
Manchanda realized that high-quality customer service is a competitive advantage and a way to generate confidence in relatively new and unfamiliar products among customers with very little purchasing power. With the help of an in-country partner, he developed an SMS platform hosted by Safaricom and Airtel that allows his company to send bulk text messages to purchasers of One Degree Solar products.
Retailers and resellers are trained to collect the serial and phone numbers of a customer’s mobile device, which are automatically transmitted to the One Degree Solar headquarters in Nairobi. One Degree Solar sends out SMS surveys on the first day of purchase and one month later, asking questions such as, “Do you need any help with your product?” and “How much money did you spend on kerosene last week?” The high-quality customer service improves consumer confidence and sales for several reasons: 1) the connection to manufacturers and repair persons in regions otherwise characterized by isolation is invaluable, 2) the reliability and benefits of the SMS service spreads by word of mouth, and 3) the service provides an assurance of the product’s dependability and long-term performance.
Manchanda’s prior work experiences with the Clinton Foundation and the Ministry of Health in Liberia involved the use of Palm Pilots to collect data from rural health clinics and hospitals. The project revealed to him the importance of data collection, as well as the relationship between data quality and the quality of the reporter. He explained:
“There are going to be situations where respondents have an inclination to give an answer you want to hear, and this can be the case in aid and development projects, especially when leading questions are asked. We’re getting our responses from a paying customer and not a beneficiary or recipient, and we think our numbers are going to be more accurate as a result. That sense of ownership is critical for us and for development as a whole.”
For solar portable companies to grow, it is essential that they share information with private and public investors to demonstrate their social impact and the potential returns on investment. Although it’s easy for solar portable lamp companies to say that their products have impact— decreased expenditure on kerosene lighting, improved literacy rates and productivity due to increased hours of lighting, and health benefits—it can be more difficult to quantify and prove that impact.
One Degree Solar’s customer service SMSs allow the company to communicate directly with customers. For example, the company can ask how the product is being used and monitor kerosene usage and expenditures over time (and then calculate subsequent health improvements attributed to decreased kerosene usage).
In addition to tracking kerosene expenditure over time, Manchanda anticipates further survey questions that investigate improved literacy rates:
“We imagine that a few months after customers buy the system, we’ll start asking questions about whether they have any children and what the children are reading. We’re hoping that with the data we collect, we can approach an Education Minister and say, ‘We have all of these families with lighting at home in x regions who have children in a given age group, and they don’t have anything to read at home.’ Sharing that information with NGOs that give books would make the work we all do more cost effective and impactful.”
Even though information sharing is a priority, One Degree Solar is still a business striving to out-do competitors. One Degree Solar provides a high-quality customer service because it’s good for business.
Manchanda says, “We do pay money per message, we do pay for staff time for developing the service, for training our resellers, and those expenses could be seen as money we could save and put to something else, but we’re spending the money and resources on developing customer service that we would appreciate in the West.”
One Degree Solar’s investment in developing an innovative customer service practice provides the foundation for the company’s scalability by 1) generating information and data for future investors, and 2) improving the marketability of a solar portable lamp in a young consumer product market.
Over the next few years, consumer product markets are expected to evolve rapidly in developing countries. Energy customers will develop higher demands, and companies will compete to provide higher-quality products and services for less, improving energy access and meeting development goals.
Do you know of other social entrepreneurs who have changed market landscapes in developing countries through innovative business models? Please feel free to share in the comments section below!
Claire Remington is an intern with the Climate & Energy program at Worldwatch Institute.