We find it's easier to market and reach more people after having conducted impact research specifically as we're able to understand what are the most significant benefits to the customer, not to us. So as Mark says, carbon-offsetting is not really a priority for a customer in their everyday lives (though the outcome of that might be), but instead they talk of the benefits of saving money and having a safer light (with a solar light) - that's then what we emphasize when we talk to new customers because we know that's what matters most to their peers.
This is great, Kelley. How did you go about this? Focus group discussion/interviews/surveys?
I really don't know the answer to changing policymaker/investor attitudes towards capturing less quantifiable impact areas. I think unfortunately this is an age-old challenge that has become even harder in recent years given the rise of interest in RCTs. Perhaps a more important question is how to get this same stakeholder group to see that RCTs are not always appropriate for market-driven initiatives that need to be primarily responsive to the market, as opposed to a predetermined research design, and build consensus around alternate methodologies. This gets back a bit to Giles Crosse's original comment re: benchmarking/metrics criteria. I of course agree that consensus around metrics is valuable and am excited to work on this within GOGLA but also think there are broader questions for the "business fights poverty" type community at large to work on with regards to acceptable methodologies to get at these metrics. For example, do we need at least quasi-experimental methods with statistically valid sample sizes, or is it acceptable to survey conceptually random and representative groups to capture directional info?
Picking up the point of avoiding prior assumptions, Kat you asked earlier how an organisation can truly act on strategic market research, yet avoid drifting off a predetermined mission. Perhaps the answer is that no mission should be immutable forever; and that if the mission has been accomplished or is no longer relevant, an organisation should reinvent itself or wind itself up. Perhaps a less drastic example would be if your enterprise is dedicated to expanding the market in a country for solar lights or efficient cookstoves, the market will eventually mature to a point where your enterprise's growth is coming more from capturing market share than market expansion. At what point do you withdraw and set up in the next country instead? Not an easy question if you have a successful operation generating revenue with loyal staff.
Our business model starts with building the market for solar lights through large scale promotions of study lights... when we go back to areas where we have done these promotions, customers have been clear: they want the options to upgrade to bigger lights and they want our business, SunnyMoney, to be permanently in their areas... I spent all Weds afternoon this week in a workshop with colleagues planning how we will deliver this.
Customers have also driven our understanding of what products they prefer... which we have fed back to the manufacturers in a number of ways.
We tested 4 hypothetical markets: urban, peri-urban, rural sedentary and rural pastoral. Using the baseline study and market analysis we selected 4 lamps and 3 pico home kits. We selected 10 households for each market and for each type of product (lamps or pico home kits). We then gave a lamp to each household for one week at the end of which we presented a questionnaire about that specific product. We then exchanged the lamp for a different one and repeated the process. At the end of the test we added a questionnaire comparing all the lamps against each other. We carried out a focus group discussion and ended it by auctioning off one model of each product in each targeted market.
Yes, because we often think that we know what the customers want, but unless we have spent a night in pitch darkness, in a refugee camp or in a mud hut, where you need a task light to make sure that there are no insects in your bed, or a torch to walk to the toilet at night, or an ambient light to remain on through the night to keep an eye on your young children, it is hard to imagine what features are important and why.
This sounds great Kelley. I imagine there are more enterprises wanting to test this type of thing - do you have a ballpark for how much that kind of thing would cost to test in the field? That way some of those engaging here can understand the (necessary) investment potentially required.
We have to understand that not all markets are the same even within a country. What urban customers want may not be the same as what rural customers want. Businesses also have to consider not only what customers want but what they can afford.
Thank you everyone - very stimulating conversation! Although we have reached the end of our live session, we'll leave the discussion open - so please do continue to post your comments!
Thanks so much to our great panel!
Great questions: I think that is, in some senses, where the risks lie with having common metrics because unless you have some kind of standardisation or overview of quality of research/data then how do we know if we're comparing accurately or whether we're comparing a rigorous study with x results with a poorly designed and executed study with y results?
However, I agree that having shared metrics might be the way to educate people (donors) that this is a better way of sharing impact results and lead them away from the RCT for all idea.
I think we did the entire study for around $7,500 but I need to double check.
I agree Mark, no mission should be immovable, but I think change can be a real challenge for some organisations - not to say it shouldn't happen, but I wonder how it can be supported/encouraged more? Some of this is around dialogue around failure too - we need to get better at celebrating and sharing our failures as that's how we learn and adapt and get better.
I think that's a great question about when do you know when to withdraw and move on because you've 'built' that market. I think this is an interesting debate that SolarAid/SunnyMoney will hopefully have to have in the not too distant future. Perhaps it's not about moving on if you're generating revenue but more about moving to a more open market structure i.e. becoming a limited company that doesn't require any grant-funding....
Thanks all for your valuable, interesting and thought-provoking comments/questions. Please do continue on here if you'd like to discuss further, even though the hour is up. Thanks to BFP for hosting this too - a great discussion topic.
Great discussion. Are we suggesting a clear division between NGOs and social enterprises? The reality is far more nuanced - when especially today one can register (in the UK) as both. But in relation to the international development context, NGOs dedicate funds to work with, and support the initiation of social enterprises - this includes assisting with research & development, and putting in place (social) impact measurement tools. Furthermore, a pure business model may have little interest in protecting ie: ecosystem services if simply motivated by profit - and so might miss some important tricks (LED lights vs cheaper kerosene lanterns is a lovely example). Whereas NGOs can advise a social enterprise in how to create multiple and interdisciplinary gains from wide experience of working in different contexts. This is of course not to say that market research shouldn't be a key driver - but that value chains can be developed and adapted depending on the product and wider enabling (or disabling) environment.
This said - I tend to agree that NGOs themselves rarely make good social enterprises. We seem to be ill equipped to think in this way - but can contribute to more integrated thinking.
Kat has laid out a very important set of questions for us. I would like to hear from others here about one particular strand in this tapestry: the potential impacts of green & sustainable innovation on livelihoods.
I’ve recently been asked to explore this topic for UNEP’s en.lighten program, which aims to help in the transition from fuel-based lighting to solar-powered alternatives. While it is true and easy to argue that existing livelihoods will be enhanced by new and innovative technologies--and that new jobs will be created as well—it is also the case that there may be disruption to existing employment. I have to say that it has been quite disconcerting not to be able to find a single in-depth treatment of this latter downside, e.g., the effect of concerted programs to displace fuel-based lighting (even electrification more broadly) on the livelihoods of microenterprises selling kerosene.
Agreed it would have been futile to worry that the advent of the car would put horse-poop-shovelers out of work... Yet, I think it is incumbent on those of us working in development to define such potential dislocation and tailor our programs and business models to minimize it. There are many ways to do so, and I am confident that technologies such as solar lighting systems will indeed continue to displace lighting fuels. Best practices in social enterprise and public policy require that we make a far more concerted effort to ask these tough, and direct some of our market research efforts at quantifying these challenges and monitoring these sorts of potential impacts.
I'm sure we can cushion these kinds of impacts, but not without the proper up-front market and impact research!
Great discussion. I'd just like to point out that people can follow Kat's blog to keep up-to-date with her research work for SolarAid http://sunrisekat.tumblr.com/, or follow Kat on twitter: @Sunrise_Kat
We did the work on a shoestring, but that was because two wonderful grad students volunteered their time! I do think that coordinating with educational institutions is a winning strategy in this respect, BUT it certainly requires particularly close and active supervision and interaction of professional project managers.
Suggesting that 'school fees' might be a more appropriate one for quoting to the funder or donor!
Yes indeed - we have found the same with organic market development in Zimbabwe. Fully certified produce is destined for urban, status markets, while also providing for local/rural markets who are increasingly demanding healthy (chemical free in-conversion) produce & products. It an excellent solution to ensuring that niche markets can also be ethical in providing cost-effective & diverse foods to those who cannot afford the premium (while also stimulating a shift in ecological production by farmers in those areas who see that markets exist beyond those which they had previously been aware of).