Article by Allegra Fisher, originally published as a Member Spotlight for the Energy Access Practitioner Network.
Energy access for those living off-grid is a pressing concern. The UN’s Sustainable Development Goal #7 states that in 13 short years, by 2030, there should be universal access to affordable, reliable, and modern energy services. Universal energy access is an important goal, but energy services must go above and beyond the basic requirements of the SDG. For people earning $2 to $10 per day, who make up 56% of the global population, energy products need to provide outstanding value. For families to survive on such low budgets, each purchase must be carefully considered. Cost is an obvious and immediate concern, but so too is quality. Ultra-cheap products can create market spoilage, as customers buy products only to have them rapidly break, and families can ill afford repeat purchases.
For customers to switch to clean energy products and continue using them – instead of reverting to kerosene lamps or candles – businesses must focus not only on the physical products but also on providing an exceptional customer experience. Fenix International was founded with a mission to provide transformative energy and financial services to off-grid customers, with customer experience at the core of our mission. This customer experience includes several key components:
As a vertically-integrated energy and financial services company, Fenix designs and manufactures ReadyPay solar home systems and sells them directly to last-mile customers. All our product managers (and over 95% of our team) are based in Uganda and spend significant time in the field to ensure that our hardware engineering team, based in Silicon Valley, designs products that meet the precise needs of our customers. By following human-centered design principles, listening to customer feedback, and implementing these requests in future product iterations, we more closely meet customers’ evolving requirements.
Fenix has implemented numerous customer-requested changes throughout the history of our business. Many customers asked for additional light points for the multiple rooms in their homes, and so we’ve expanded our SHS offerings to include a variety of kit sizes, some with up to 6 LED lights. TVs are incredibly popular, and so we’ve sourced an ultra-efficient LED TV, with a screen approximately the size of a laptop, and work with content providers to make sure customers who purchase a TV have programs to watch even in remote locations. Families also want to be able to upgrade their kit, so we sell additional solar panels paired with appliances (either a radio or a lantern) to increase kit size without having to purchase a whole new SHS.
Durability of off-grid energy products is also paramount. Fenix conducts rigorous testing at both the factory and the kitting facility in Uganda to ensure that ReadyPay power systems will work as intended throughout their lifespan. With a three-year warranty, families are assured that any technical problems will be addressed should they arise.
Appropriate Business Models
For the vast majority of off-grid customers, the cash price of SHS is too great for them to afford. Consumer financing is essential to reaching these households, so Fenix sells ReadyPay solar home systems on a lease-to-own basis. Customers put down a small deposit, take home and self-install the SHS, and then pay off the remainder of the cost over 18 to 30 months via Mobile Money payments. Our smallest SHS has a daily rate of $0.20, making it one of the most affordable lease-to-own kits in Uganda. After each payment, customers receive a code that unlocks their kit for the amount of time paid. The lease-to-own model not only allows customers to afford the SHS, but also helps customers begin to create a credit score as they repay their loan. Fenix first launched in Uganda with a cash sales model, and sold 5,000 kits in two years; since switching to a lease-to-own basis, we have sold over 100,000 kits in three years.
Last-Mile Sales and Distribution
Fenix partners with MTN, the largest telco in Africa and Uganda, to drive SHS adoption and benefit both companies. Fenix attracts customers who may be skeptical of solar (due to market spoilage or concerns about new technology) with the the visibility and reputation of the trusted MTN brand. MTN builds increased loyalty and improved relationships with customers through offering high-quality ReadyPay solar, and extensively emphasizes this benefit and partnership in its branding. MTN also increases mobile money penetration in rural areas.
The Fenix-MTN partnership helps reach last-mile customers who may not be able to afford travel. Based out of 90 Fenix points of sale, many co-located with MTN shops, our commissioned sales representatives reach far into the most rural parts of Uganda. Representatives travel long distances on motorbikes and put on market-based events to reach off-grid communities with SHS. Sales representatives demonstrate kits, answer questions, and help customers choose the most appropriate kit for their needs.
After-Sales Customer Experience
While being able to reach customers across a wide geography is key, building relationships with customers is also paramount. Satisfied customers are better paying customers and refer still more customers, leading to increased adoption of energy products. To ensure a stellar customer experience, Fenix runs a call center where representatives speaking over 25 languages follow up with each customer after the sale. Call center associates also handle inbound calls from customers who have questions about their systems or technical issues to address. If a customer has a technical issue and needs to bring the SHS in for service, he or she is directed to the nearest of 20 Fenix service centers across Uganda, where repairs under warranty are completed for free. If a customer has a problem that can’t be addressed at one the service center, he will be offered an immediate swap so he can continue using the SHS right away instead of waiting for a repair.
Off-grid customers deserve high-quality, long-lasting energy products and incredible customer service, and the long-term success of the energy access industry depends on creating a positive experience for families. By putting the customer experience at the heart of our business, Fenix has reached over 100,000 customers in Uganda to date. We will continue to expand our product line and reach new geographies in 2017 to bring energy access, an exceptional experience, and better lives to even more families in the future.