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Life Force Kiosks customer raffle

Life Force Kiosks customer raffle

Every Sunday, Life Force Kiosks is in the community conducting our raffles.  For anyone new to this blog, I’ll provide a quick overview.  Whenever a customer buys either a water treatment top-up or a jerry can washing from Life Force Kiosks, their sales receipt doubles as a raffle ticket.  This has two substantial benefits.

1.  Raffles are a great demand generation tool, especially here in Kenya.  People just love them here.  So while reducing the risk of waterborne disease might not compelling enough on its own, throwing in the chance to win some fun prizes helps push people over the edge.  Sales shot up dramatically once we implemented our raffles.  This promotion both rewards customers to increase loyalty and creates product awareness and demand among non-users.

2.  The raffles provide motivation for customers to demand a receipt.  This allows us to accurately track sales and collect the appropriate amount from our vendors.   

If you’d like to see Steve in action, below is a video clip capturing a couple of minutes from one of our raffles.  Additional pictures are also available at https://lifeforcekiosks.org/Photo_Album.php or by clicking on the Flickr section on the right side of the page at www.CleanWaterForAll.net

Enjoy!

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I spent a few days this week in rural Kenya working on a sanitation project so I wasn’t able to announce a huge milestone.  Life Force Kiosks recently purified our 10,000th liter of drinking water in Kibera.  Actually, we’re already at over 11,000 liters purified.  We’ve also cleaned about 200 water storage containers. 

As expected, sales were initially low, but we’ve seen steady growth and have purified over 1,000 liters per day for the past couple of days.  I attribute the growth to two main activities.

  1. Vendor improvements – Our management team has done a great job of making improvements with our vendor network.  In many cases, we used a three-day training approach where Steve spent two days running a kiosk with the vendor by his side watching.  On the third day, Steve was still at the same kiosk all day but the vendor did all the work and Steve observed.  This allowed Steve, who is charismatic and trained in community development, to give our sales pitch to every customer who approached the water tap and generate consumer demand for two consecutive days.  It also allowed the vendor to see firsthand what an effective sales pitch looks like, including overcoming objections.  Lastly, it let the vendors get over their nervousness about the new service and see that the community is responding positively and they really can make more money by working with us.  In some extreme cases, we removed vendors who were not performing and replaced them with vendors who had greater interest.
  2. Community Raffle – The cornerstone of our marketing program is our weekly raffles.  The biggest problem with most health promotions is that they don’t focus on the real things that motivate people.  Look at any gym commercial in the United States.  You don’t see a doctor explaining how exercise reduces the risk of heart disease.  You see beautiful, toned people glistening with sweat in very little clothing because people want to look like that so they can date other people who look like that.  Our raffles motivate our customers by giving them a chance to win something they really want like household wares they couldn’t otherwise afford or cell phone credit.  I wish that reducing the risk of waterborne disease was motivation enough, but it’s just not and never will be.  We had our first round of weekly raffles over the weekend and as expected, they attracted large crowds.  Everyone wanted to know how they could participate in the raffle and several asked if they could buy our services right then and there.  As we do more and more of these raffles, I expect every member of the community to eventually hear about and at least consider utilizing the services of Life Force Kiosks.  I don’t know too many marketers who would say they see that kind of impact from a billboard, brochure, or direct mail campaign.

The entire team is incredibly excited at the positive reaction we’ve seen in the community.  Even more exciting is that there’s still a huge amount of potential for growth.  We’re just three weeks old and haven’t even started our community presentations at women’s groups, schools, etc.  Stay tuned for future updates.  We’re just warming up!

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Life Force KiosksIt’s with great excitement that I announce that Life Force Kiosks began operations in the Gatwekera village of Kibera today.  We launched this morning with an incredibly successful community event.  The band and Emcee did a fantastic job of gathering and entertaining crowds of people who sat in our tents and lined the street to hear about Life Force Kiosks. 

Jeremy Farkas speaking at the Life Force Kiosks launch event

Photo by Tobin Jones

A community leader opened the meeting with some rousing remarks before handing things over to our General Manager, Steve, who then gave a detailed presentation of our services.  I spoke next and outlined some of the key benefits of Life Force Kiosks.  I explained how our service offers the unique combination of affordability, convenience, effectiveness, and no impact on taste & smell.  I also reiterated the details of our weekly raffle.  We had two guest speakers who also made presentations.  Professor Karama from the Kenya Medical Research Institute (KEMRI) and Mr. Wanjohi from the Ministry of Public Health and Sanitation (MoPHS) both gave presentations discussing the health benefits of the Life Force Kiosks model.  I am extremely thankful that our two guest speakers were able to attend.  Showing the community that both KEMRI and the MoPHS support Life Force Kiosks gives us instant credibility and should help accelerate adoption. 

Crowd attending the Life Force Kiosks launch in KiberaAfter the conclusion of the presentations, the band continued to entertain the community as we passed out more leaflets and gave free samples of Life Force Kiosks treated water.  The afternoon was spent setting up the kiosks so we could immediately start selling our services and improving the water quality and storage conditions in Kibera.  Over the coming days and months I look forward to giving you regular updates on how things are going.  I’ll also be sharing both our success stories and any lessons learned. 

Dancers on stage in KiberaIn addition to the pictures in this post, I encourage you to check out our Flickr account for additional photos at http://www.flickr.com/photos/33468302@N02/.  I’d like to thank Tobin Jones, a good friend and professional photographer who volunteered his time today to take some great pictures.  Over the next few days I’ll post additional pictures to the Flickr account and on our website at www.LifeForceKiosks.org

I want to thank all of you who have been following our story for over a year.  But this is just the beginning.  The exciting part starts now!

Life Force Kiosks Management Team

Photo by Tobin Jones

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Yesterday I conducted my last set of field interviews in the Kitale region.  This time I spoke with several people in one of the slums right outside Kitale.  While the living conditions are quite poor, the level of sanitation is fortunately far better than Kibera.  In the Kitale slums, most people are getting their drinking water from a tapped stream, which costs 1 shilling per 20 liters.

Kitale slum water

Kitale slum water

Interestingly, many of the residents here do boil their water at an average cost of 50 shillings per 20 liters.  Once I heard that, I had little doubt that people in this area would be interested in the water kiosk model.  This was confirmed with the overwhelmingly positive response to the idea by the majority of the residents.  Several tried to haggle on the price of the water, which I said would be 10 shillings per 20 liters.  I was actually quite excited to see them trying to negotiate the price, as I don’t think they would have spent the time and energy to do so if they weren’t legitimately interested in the idea.  In reality, I hope to charge closer to 5 shillings per 20 liters, but it would be nice to be able to charge up to 10 if needed for financial viability.  Of course the goal is to charge as low a rate as possible while operating profitably.

Kitale interviews

Kitale interviews

I still have additional interviews to conduct in Kibera, but it looks promising that the kiosk model may work in poor, urban areas where people already pay for water and treatment.  The next step is to determine the best business model for the kiosk.  My original thought was that that each kiosk owner would get a micro-finance loan and operate fairly independently.  When I had difficulty getting in touch with MFI to help with a pilot, it made my consider alternatives which may be even better.  My revised concept is more of a franchise model, where a centralized management team would be responsible for purchasing equipment in bulk, conducting community marketing, and providing training and quality control for the kiosk operators.  Rather than paying interest to an MFI, they would instead make payments back to the company that would be used to pay the overhead costs.

Kitale interviews

Kitale interviews

I see multiple advantages to the franchise model.  If kiosk owners all worked independently, nobody’s profit would be large enough to invest in things like marketing.  Together, they can raise awareness that benefits the whole kiosk network and the community in general.  Further, most kiosk owners don’t have the business training to properly perform activities like marketing, process improvements, and new product development.  They also don’t have enough power as individuals to get advantageous terms for funding and purchasing.  A centralized management structure can also help ensure that kiosk operators don’t run scams and sell untreated water through random water testing and process audits.  Lastly, instead of leaking a relatively large percentage of the profits to an MFI, it is  reinvested in the business which promotes growth. Obviously not every person has the skill set and motivation to be the CEO of a company, but in Kenya that is often your only choice if you want to work.  This model properly aligns different skill sets with the work that needs to be done.

Women getting water in Kitale slum

Women getting water in Kitale slum

There are a few distinct disadvantages of the franchise model compared to operating independently.  The largest by far is the involvement of the Kenyan government.  It’s relatively easy to sell fruit (or water) out of your home or in a small individual kiosk.  When you’re talking about a larger company, suddenly you have to factor in government approvals and “fees”.  The second problem is that the margins in this business are necessarily slim, and therefore a large network of kiosks must be established before the overhead costs of management salaries can be supported.  Even paying for just one Kenyan manager, which is what I would anticipate in the early stages, would be nearly impossible without initial subsidies.  The third problem is regarding capital.  We would need some.  For the model to have any chance at success, initial capital will likely have to come in the form of donations since there wouldn’t be enough profit to cover overhead expenses plus principle and interest payments.  Fortunately I don’t think the business would need a huge amount to get off the ground.  It depends largely on the size of the community and how many kiosk partners we take on initially.  My estimates show a cost of about $120 per vendor for equipment, $2,400 for the manager’s annual salary, plus unexpected costs such as government fees and other random start-up expenses.  I’m sure there are other costs I haven’t yet thought of as well.

Steve Mumbwani

Steve Mumbwani

I’m very happy to have met a potential candidate to serve as the manager of the clean water kiosk franchise.  Steve Mumbwani is one of several college students that has been interning here at Common Ground with a focus on community development.  After Steve finished high school, he worked for six years to save up enough money to put himself through college.  I’ve found him to be charismatic, intelligent, and a strong leader.  Steve was one of my interpreters in the field interviews, and it was always fun to watch him convince people on the need for clean water after the interviews were completed.  On multiple occasions, people that previously had never treated their water asked if they could buy a filter right then and there after speaking with Steve.

Stay tuned for further updates as we hash out the kiosk model.  As always, I welcome your feedback and suggestions.

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Trying to craft an advertising strategy has been an interesting experience in Kenya.  The marketing channels are far more limited than in the US.  E-mail, direct mail, search engine marketing, magazine ads, and event sponsorship are all unavailable.  Television ads are both prohibitively expensive and not terribly useful to reach a large population that doesn’t own a television (or certainly doesn’t watch it as much as Americans).  After spending a lot of time observing what works in Kenya, it seems one of our best options is plastering the area with signs.

We’ll likely use a combination of large road side signs placed on the main road, along with hundreds of small signs that we’ll provide to shops that sell our filters.  Here are some mock ups of potential road side signs.  If they seem very simplistic, it’s because they are.  Advertising here is generally very basic and to the point.  In fact, the most common way to produce a sign around Kiminini / Kitale is to have it painted by hand.

Road side sign 1

Road side sign 1

Of course, like all marketing, a single channel is not nearly as effective as an integrated multi-channel campaign, so these signs will reinforce the messages we’re promoting through live market demonstrations, community group presentations, educational fliers, and more.

Road side sign 2

Road side sign 2

Road side sign 3

Road side sign 3

Road side sign 4

Road side sign 4

Road side sign 5

Road side sign 5

Road side sign 6

Road side sign 6

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The interviews are just about done.  The competitive research is complete, as is an assessment of viable marketing and distribution options.  After several weeks in Africa and many weeks of research ahead of time, I’ve put together a 2.5 page document outlining the key findings and recommendations for the water filter marketing strategy.  I’ve previously posted several key findings and won’t repeat them now.  Instead, I’ll just include an excerpt of the recommendations.  If you’d like to see the full document, just let me know and I’ll be more than happy to send it your way.  I’d love to hear your comments on the recommendations below.  Tomorrow I’ll post the sample road side signs.  Also note that new pictures are available through the Flickr link on the right.

Key Recommendations

Promotion – Overall the biggest barrier to mass adoption will be lack of awareness, which can be overcome with continuous marketing efforts

1. Traditional advertising

  • Roadside signs
  • In-store signs (similar to Safaricom’s “Top up here”)
  • Flyers / brochures
  • Joshua’s radio program

2. Community presentation

  • Community / Women’s groups
  • Churches
  • Schools

3. Market demonstrations (live performances / demos)

  • Kiminini Market
  • Kitale

Distribution – A broad distribution network is required to reach a relatively disbursed population, especially given the need to pay in installment

  1. Dukas in Kiminini, Kitale, and in villages will likely be the primary distribution channel given the quantity of dukas and their ability to sell in installments given their personal relationship with customers
  2. Direct sales – We can hire and train commission-based salespeople to sell the filters directly to individuals.  These people can also give community group presentations and market demonstrations.
  3. Allow doctors and health offices to sell the filters.  In addition, if allowed by law, it would be great to check with the medical community to see where cases of typhoid are being reported so we can quickly target those communities (legitimate fear of typhoid is a huge and valid motivator)
  4. KCP could sell directly, but I recommend against undercutting the market on price.  We can set the price we would like to see in the market, but undercutting dukas jeopardizes those relationships and will drastically reduce coverage.
  5. Community groups can help members purchase filters in two ways
    1. Groups can establish a filter merry-go-round fund where x members contribute Price/x shillings every 2-4 weeks to purchase a filter for one member.  The process is repeated until all members have a filter.
    2. KCP can sell filters to the community group either for cash or on credit, and the group can sell to its members using whatever terms they prefer.  Selling to a community group on credit is less risk for KCP due to the social pressure to repay, potential joint liability, and greater ability to find and repossess filters from people who default.

Price

  1. We should sell the filters at the lowest price that allows KCP to operate at a minimum of break even plus profit used to invest in plant maintenance, financial reserves, and fair employee compensation.
  2. If KCP sells directly to individuals, we can set a fair price but should not undercut the 10-15% markup required by our distribution partners.  The 10-15% amount was obtained from Khetia’s (largest store in Kitale) staff, but should be validated with the duka network.
  3. It will be critical for us to be able to advertise that the filters are available for purchase in installments.  As such, dukas selling the filter should be told of this expectation, and we should consider not using dukas who refuse these terms.  Exceptions should be made for larger stores like Khetia’s and Subiri supermarket.

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Today we reached a key milestone towards the successful distribution of the water filters.  Along with one of the factory staff members, I went to speak with several shop owners in Kiminini market to gauge their interest in selling the filters.  Not only were they very excited about selling them, but they also said that selling them in installments would be no problem at all.  The installments are a critical component, as most villagers said they wouldn’t be able to (or wouldn’t want to) pay 1,000 – 1,500 shillings all at once.  Putting up signs and posters in their shops is fine as well.

Kiminini, Kenya Supermarket

Kiminini Supermarket

I have the say that while there may be a lot of problems with business in Kenya, I do love the lack of bureaucracy (so long as the government isn’t involved).  We were able to speak directly to the shop owner (often the only person working in the shop).  At the end of the conversation, several owners asked if they could have some now so they could start selling them.  No checking with procurement, legal, and a host of VPs all with their own agendas.  They just thought it was a good product that their customers would like and they were ready to go.  Very refreshing.

We spoke with the largest pharmacy and the largest supermarket, as well as several smaller shops.  The more shops we can get into, the better.  This will keep the pricing competitive, increase our brand awareness, and help ensure that most people can get the filter with a shop keeper they know and trust.

Kiminini, Kenya Pharmacy

Kiminini Pharmacy

Based on the initial reactions of both the local residents and the shop owners, I’m far more optimistic that we’ll not only be able to launch the filters successfully in Kiminini and Kitale, but eventually roll out the filters to other areas such as Eldoret, Kisumu, and Nairobi.  Overall, a good day.

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