February 2017 Public version

Field Studies

CusTomers referring CusTomers This report examines how Solaris Tanzania (branch of Solaris Offgrid) has used referral tactics to improve customer acquisition. It looks at the characteristics of the customers who refer the service, and explores what triggered them to do so.

Solaris Offgrid

Who we are

Field Studies

Solaris Offgrid designs and manufactures integrated solutions to foster an affordable and sustainable energy access in off-grid areas. We have been dedicating incredible efforts in R&D since 2014, and successfully experimented it with our last mile operator Solaris Tanzania. With Solaris Offgrid we scale up such impact by sharing this unique integrated solution to our local partners across developing countries.

We run our own field operations in the north of Tanzania

And share the recipe of success to our ambitious partners

POWERING V I L L A G E S Solaris Offgrid and Solaris Tanzania are trading brands of Eternum LTD

E M P O W E R I N G entrepreneurs

Solaris Offgrid

OuTlines

Field Studies

CrC Customers referring Customers

This report explores the findings of Solaris Tanzania. It examines the profiles of customers who refer our services to their friends or family, and the triggers for doing so.

Contents • • • • • • •

Pages 1-3: Introduction slides Page 4: Executive Summary Page 5: Methodology Pages 6-8: Profiling of the referrer Pages 9-12: Triggers to refer Pages xx-xx: Leveraging CrC CONFIDENTIAL Pages 13-15: Concluding slides

ExecuTive Summary

Solaris Offgrid Field Studies

What we believe are the main take-away of this study: • CrC can be up to 5 times cheaper than the average Customer Acquisition Cost. • There are 2 clear profiles of people that are likely to refer others: 1. Highly satisfied customers; 2. Business mind-set customers. • While most referrals come naturally, there are certain interactions that encourage them to happen (by reminding its existence); • While the reward seems a relevant trigger for referring, None of the customers we spoke to mentioned the reward as an incentive to do so; 4

Solaris Offgrid

MeThodology

Field Studies

Solaris Tanzania has been running an initiative to encourage customers to refer others to join Solaris, known as ‘customers referring customers’ (CrC). The customers are rewarded with free energy time. This is the only cost directly associated with this channel of customer acquisition, which proves to be much more resource efficient (about 5 times cheaper) than regular channels involving salesmen traveling in the bush, communication/representation expenses, etc. The task for this report was to analyse the data of our CrC flow, to better understand the profile of those who were recommending the service to others, and find ways to leverage the scheme further. We analysed 45 clients who had recommended the service to others, exploring the following areas: • • • •

Age Type of offer Activation ratio Income

• Location • Occupation • Triggers

We also then spoke to 10 customers who haven’t referred anyone to find out why not.

The highlights are examined over the next few slides.

5

Solaris Offgrid

Profiling

Field Studies

There are many attributes that affect the likelihood of referral. However there are two clear types of customer that are likely to refer:

Highly satisfied customers

95% Average activation ratio (payment on time) Finds the activation process simple to follow Motivated by satisfaction with service, not necessarily just the reward

Have fewer interactions with the after-sales services (as they suffer from fewer tech and activation issues)

Business mind-set customers Highest proportion of referrals (more than once) Make their living by selling/talking to people Typically have a device at their business – providing a demonstration for potential new Have a wide network as a customers result of their profession

Solaris Offgrid

Profiling

Field Studies

What do you use your Solaris system for?

“Lighting my home and phone charging” How has it changed the way you live? “It helps us to see after dark, which means I can work at night and my children can study. It also minimises the cost of living, as Kerosene (the alternative) is expensive ” What do you like about what Solaris has to offer?

“I like the aftersales service, if I have an issue I get a solution in good time. The staff are also very welcoming” Who did you refer, and how did you find a suitable person?

Name: Pius Kapupu Profession: Businessman and farmer Village: Kamanga Time spent with Solaris kit: 13 months

“I referred my friend. We spoke about it and I realised he was interested in the product that Solaris offers. Then I checked that he would have the ability to afford it, and when I had done that I called Solaris to refer him!” What encouraged you to refer him?

“The good service that you provide encouraged me to help my friends also receive it, and I knew someone that was interested!”

Solaris Offgrid

Profiling

Field Studies

We looked at the age of referrers : 35,00% 30,00%

Referrers Breakdown

This graph shows each age bracket as a percentage of the referrers (red). Representation of our total customer base (blue) has been deleted for confidential reasons.

Percentage

25,00% 20,00% 15,00% 10,00% 5,00% 0,00% 25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-65

Age bracket

• Older customers from 50 years old (part of village elderly) are over represented compared to the total customer portfolio age breakdown. We assume it is due to the respect they benefit from their community; • Although, those aged 35-39 are the most common referrers. If we look at the wider bracket of 35-44, it accounts for 47% of referrals, over-represented among both the referrers and the total customer portfolio age breakdown.

Profiling

Solaris Offgrid Field Studies

We also looked at their income: • Our referrers had an average weekly income of 106,000 Tsh – approximately $47. • When we took the size of their households into account, this CONFIDENTIAL averaged to 16,000 Tsh per person – approximately $7. • Across our total client base, the average weekly income per family member is 25,000 Tsh – approximately $11. • So the referrers are typically earning less than average customer base (revenue per household member). It might be assumed from this that the financial reward, which will be more valuable to these customers, is a reason for their referring. We explore this theory further on page 11 where we look at the reasons for referring.

Solaris Offgrid

Triggers

Field Studies

We examined any interactions with Solaris Tanzania in the week before their referral, to see if it might have triggered them to refer:

33 clients had no recent interaction

73%

Conclusions: • The majority come naturally. But still 12 clients came from visits or calls – roughly 1 in 4. • They come from a broad range of interactions, so all staff should all be encouraged to mentioned the referral scheme in every interaction with clients.

11% 7% 7% 2%

5 clients were visited 1 or 2 days prior to a referral, in which CrC was mentioned. 3 clients had a friendly visit on the day of referral in which CrC was mentioned. 3 clients had been installed in the previous 2 days, and the installer mentioned CrC. 1 client had a phone call reminder the day before in which CrC was mentioned.

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Triggers

Field Studies

We interviewed 10 clients who had referred someone previously

“What incentivised you to refer someone?”

0

Mentioned the reward as the reason for referring.

“Did you feel you were well rewarded?”

10

Said they felt well rewarded*, despite this not being their main reason for referring. *It is worth noting that general politeness in Tanzania means people may be more likely to say yes to this question.

10

Said they referred because of satisfaction with the services of Solaris Tanzania.

“Is there a reason you haven’t referred any more people?”

5

Said the season was the reason for not referring more – it’s a difficult time as farmers are investing in their farms. 11

Solaris Offgrid

Triggers

Field Studies

We interviewed 10 clients who had not referred someone previously

“Are you aware of the referring scheme?”

9

Said they were aware of the scheme

“Do you know anyone suitable for referring?

4

Said their reason for not referring was seasonal, their friends were investing in their farms

4

Said they just didn’t know anyone who would be suitable

Conclusions: • Success in this channel can’t be forced; satisfaction with the products/services seems to be a bigger trigger for referring than the reward alone – even though our referrers have lower income than the average of our customer base. • There will be reasons that people don’t refer which can’t be controlled, such as not having the appropriate network or the seasons. Keeping customers educated about the channel will mean they refer when they are connecting with the right person at the right time.

Solaris Offgrid

Conclusion

Field Studies

• When used effectively, the CrC channel can be a powerful method of attracting new customers. It is significantly cheaper than traditional pitching/sales methods; • Aftersales performance is key; a happy customer is a referring customer; Business people, with their wide network, can be good sources of referrals; • Despite the fact the reward offered is never claimed as being the main incentive, most referring customers are below the income average of our customers’ portfolio; Author: D.Henry

Solaris Offgrid

Our inTegraTed SoluTion

The 4 crucial componenTs of a susTainable & profiTable business model

HARD

W A R E

SOFT

W A R E

EMPOWER M E N T

FINANCE P U S H

Field Studies

T h e

3

m a i n

m o d e l s

o f

T E C H N O L O G Y I N T E G R A T I O N INTO

Y O U R

A P P R O A C H

SMART & MODULAR charging controller including PAYG technologies

CUTTING EDGE CRM enhancing customers and resources performance monitoring

STRATEGIC & TECH expertise in running a Solaris business is shared from day one

MA T C H F U N D I N G can be provided to cover post pilot capital expenditure effort

FULL HOME SYSTEM Be exclusively dedicated to this range of technical solution and replicate our successful Tanzanian model, partially or totally

WITH APPLIANCES

Our solution will allow you to extend your range of products from entry level powercapacitiestoaTV-friendlysize in order to follow your customers’ needs

WITH MINI-GRID Our solution will give you a flexible and cost efficient way to extend the reach of your grid to un-served customers while relying on a CRM to manage them all

Field Studies

www.solarisoffgrid.com www.facebook.com/solarisoffgrid @solarisoffgrid [email protected]