Toilet Teachings: Toilet Ventures that highlight strategies for success in inclusive business

Written by Caroline Ashley | Originally Published by Business Fights Poverty in partnership with Business Innovation Facility

 

I’ve leant more than I ever expected about toilets the past 6 months. But understanding toilet ventures has taught me a lot about how inclusive business works. In fact, the challenges and innovations that we can see in two sanitation projects in slums of Kenya and India illustrate typical issues for businesses that are solving a ‘problem’ and meeting a ‘need’ in a market where this is not yet expressed as ‘demand’.

 

3S Shramik is working in Pune and other cities in India, supported by the Business Innovation Facility, and Sanergy is in Nairobi slums, supported by Innovations Against Poverty. Both ventures are developing business models for private provision of sanitation in slums, covering everything from careful toilet design to evacuation of waste.

 

The current health affects of poor sanitation are clear and huge. But slum dwellers are used to open defecation or low quality public/community toilet blocks, both usually free. Current provision is inadequate but it’s not customary to pay fees to use toilets. So what are they doing to build demand, change attitudes and habits, and find a revenue-cost model that will be sustainable?

 

Here are 6 of their strategies for success.

 

1. Educating consumers and finding the right selling points  

As Rajeev Kher, CEO of Saraplast, the company behind 3S Shramik explains in his  video interview, they do NOT just tell slum residents that using toilets prevents disease. Messages focus on dignity, safety, cleanliness, and good parenting. Educating the children as a means to change long-term attitudes is key.

 

Most sanitation programs heavily invest a lot of money and effort in providing infrastructure for sanitation and little effort in education and awareness. Most of these programs fail after some time because the intended target of such efforts do not value or know the importance of such facilities and majority of them ignore them or do not properly use and maintain them. Behavioral change is one of the hindrances and yet a potential tool to spearhead change in this sector.” (Blog by Rajeev on Impact in Sanitation)

 

2. Building a brand

Sanergy toilets are bold bright and blue.  As Sanergy co-Founder, Ani Vallabheni explains in a recent blog, the name ‘Sanergy’ works for investors, but it took effort to find the right brand name for users:  Eventually, we settled on “Fresh Life” for its aspirational tone, nod to cleanliness, and its staying power (a lifetime of clean, rather than just a moment)

 

3 Enthusiastic entrepreneurs

At Sanergy,  the Sanpreneur is critical:  there are now 96 Fresh Life Operators:  these local entrepreneurs do not only mange the toilets but promote them too.   In India, people’s perceptions of the low status of cleaners have been a disincentive for 3S staff, who are particularly reluctant to work in their home area.

 

Sanergy invests strongly in the Operator network, providing business training, a ‘business in a box’ kit, and encouraging a fun and competitive team spirit among them.   I enjoyed a recent post from Nicole Parisi-Smith at Sanergy, sharing their lessons on which entrepreneurs do best.

 

4. Focus on women

One of the findings reported by Nicole is that women Fresh Life Operators do better than men.   And over in India, in a blog on feedback from Dhattawadi school  last October, Rajeev pointed out that the boys were content but the girls had ‘a lot more to say’ on how toilets could be improved for them.  This is a business where women have a key role, as users and service suppliers, so their views and energy count for a lot.

 

‘Our female Fresh Life Operators have 25% more users per day than our male Fresh Life Operators. This isn’t too surprising to us – we know that women are incredibly powerful advocates for improved health in their community and therefore much more likely to urge their neighbors and families to use hygienic sanitation’. (Makings of a Sanergy Superstar)

 

5. Willingness to pay is complex

A Market Landscape assessment, conducted for 3S Shramik and published by BIF today, found that willingness to pay varies by city, and was not well correlated with ability to pay. It  varies by custom,  payment system, and availability of free alternatives.  And what people said in surveys does not always get translated into practice.

 

6. Focus on quality improves product differentiation and willingness to pay

Designing the right product is key, and both companies are paying attention to this.  But the maintenance and cleaning is even more critical because it helps customers to differentiate the new product and boosts willingness to pay.

 

In market research for 3S, 86% of interviewees said they would be willing to use mobile toilets if they are cleaner than brick and mortar ones, despite being  further away.  (Market Landscape assessment)

 

7. Revenue can be driven from multiple sources

Even as demand grows, slum dwellers will have limited spend on toilet use.  Market research in Indian cities suggests current fees in place are around 1-3 Rupees (about 2-6 cents US$) for single use (not dissimilar to Sanergy fees in Nairobi), or 20-50 Rupees ( (40cents – US$1) for a monthly pass; passes are common in Pune, but rarer in Bangalore and Delhi.

 

User fees may eventually offset operating costs, but for businesses to grow and sustain toilet provision, other sources of revenue  are needed.   For Sanergy, sale of fertiliser is an important part of the overall revenue model.   3S  Shramik are finding that willingness to pay is higher for water, soap, and paper towels, and are exploring a range of revenue options.  Implicit subsidies, particularly for provision of sites or water, play a critical role in determining the revenue model.

 

8. Understanding consumers

Collecting feedback from users is essential to understand their habits, usage, likes and dislikes. It helps the company improve the service and assess impact.  I enjoyed many of Rajeev’s early blogs on the Hub in 2012, in which he shared feedback from the kids at Dhattawadi School, in Pune.

 

So many of these lessons apply to other inclusive businesses, whether in nutrition, renewable energy, or healthcare.  Do they resonate with you?

 

Connect with other entrepreneurs on the Ennovent Network to understand what strategies they are using to succeed in their inclusive businesses.

 

 

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