Observations For Mini-grid Developers

By March 2020, there were 5,544 active mini-grid projects in Sub-Saharan Africa, Asia, Latin America and small island nations as identified through the Mini-Grids Partnership report. While this is promising and numbers have grown since, thousands more are needed to serve the millions still without electricity. This will “require capital investment of USD 128 billion, 78 percent higher than the estimated capital investment in a business-as-usual scenario.”

To unlock this capital, mini-grid developers will need to prove impact (current and future) but also deliver solid and sustainable financials. To that end, from a sales point of view, mini-grid developers have two priorities:

1. Increase the number of connections per village
2. Increase the sales per connection

Both can be achieved in multiple ways, some of which we have observed and share below.

A Sales Funnel starts at the Site Selection

“The brutal fact is the number one reason for failure in sales is an empty pipe, and, the root cause of an empty pipeline is the failure to prospect.” — Jeb Blount

The mechanics of increasing a mini-grid developer’s “penetration” per village begins in the initial phases, even before the site has been chosen.

During the site selection process, desktop research will be looking at secondary data such as population and settlement density, distance to the national distribution grid or other mini-grids or proximity to other sites for the purposes of clustering, to mention a few. Most of the primary data will be collected in the field, looking to cross-check/validate secondary data, identify suitable communication channels and assess general need/demand for a mini-grid.

As field personnel interacts with households and businesses, they must collect vital “lead” information: name, address, phone number but also, through a series of well thought out surveys, the leads’ willingness and ability to connect and possibly purchase other products. Not only will the data be critical to assess the potential numbers of connections per village, but it will cover some of the necessary groundwork to follow-up on the most promising leads.

Image taken from data-axel: 5 Essential Steps in the Sales Leads Follow Up Process

As a site is confirmed, and the mini-grid is well underway, sales leaders need to ensure that their agents revisit leads, confirm interests, and ultimately close the sales.

Improving the End-User Experience

“Customer experiences that eliminate confusion, uncertainty and anxiety reap the rewards, generating a competitive advantage, loyalty and a peerless brand image.” — Matt Watkinson

We all have fallen victim to a lack of clarity in a transaction — whether it’s not really understanding what we are paying for or, in the case of a subscription service, not remembering we had to pay or being surprised as we receive the bill.

We found the same to be true with many end-users in rural areas that purchase PAYGO deals or connect to mini-grids. While we should remain realistic to how great a mini-grid developer can improve the user-experience of its customers, this isn’t always their focus. Yet, understanding its importance will ultimately allow for better repayments, but will also improve their reputation, resulting in word of mouth referrals and ultimately more connections. Here are a few examples of what can be done:

1. Automated SMS messaging — is the simplest (must have) way to communicate with end-users to confirm a pending or processed payment or a reminder to pay. You can connect your CRM software to a bulk SMS provider like Africa’s Talking and automate the process based on MoMo payments received, or balance due etc.
2. USSD menu — similar to automated SMS but with a better user experience and more possibilities to effectively communicate to end-users their balance, usage, future payments and more if needed. Many utility companies already use USSD with their customers however not all CRM providers have this feature in their system — due diligence will be required when choosing the CRM provider since this process must be connected to your standard sales activity and customer information.
3. End-User App — With the increasing penetration of smartphones in rural areas, there are a growing number of opportunities to considerably improve the user-experience of mini-grid customers. A well-built end-user app allows mini-grid customers to effectively see their balance, their payments due and their next payment; share images of consumption, deliver promotions, educate, provide other services or products effectively and even put in place an incentive based referral program.

Sample screens of the Upya Wingu App — for end-users

Increasing the ARPU

“Higher daytime utilization of solar hybrids leads to better economic returns” — AMDA

All mini-grids developers will define success through their social impact as well as by looking at metrics such as Average Revenue Per User (ARPU).

As shown through studies by the AMDA, the clear path to improved ARPU is to increase the utilization rate of end-users, which can be achieved by making the following strategic decisions:

1. Form partnerships with other companies selling electrical products: Through sharing of pertinent and specific customer information with partners, a mini-grid developer can considerably decrease the cost of acquisition of a distributor while ensuring that ultimately the mini-grid end-user has access to more products, increasing his or her clean energy consumption (hence ARPU) and ultimately living conditions.
2. Become a distributor of products/assets: A more ambitious approach would be for the mini-grid developer to directly distribute relevant products to its end-customers. This approach needs to be analyzed carefully since it implies creating a completely new revenue stream + business model: building relationships with manufacturers, or wholesalers; training agents, following stock and ensuring after sales support to mention a few. However, if properly set-up, the reward is greater as not only would the developer increase consumption per connection but also add an additional revenue stream per user.

Clearly, mini-grid developers have a lot to manage, from finding the right site, to setting-up the mini-grid and running it while ensuring maximum return and impact. At Upya Technologies, we are here to help. We work with mini-grid developers to continuously improve their sales operations and customer relationship by providing them with a CRM that is integrated to metering devices, allows for the sale of any product, automates communication to end-users through SMS or USSD or through our end-user App Wingu. Through Wingu, our partners can also set-up a shop, implement referral schemes and effectively communicate promotional campaigns with their end-users.

Learn more by viewing our short demo video here

A view of the Upya solution to support mini-grid developers.