A sweeping sales strategy

Summary

• Market-based approaches are not necessarily incentivized to reach the poorest.
• iDE aims to be poor-inclusive, avoid distorting the market, and achieve maximum efficiency of resource allocation by implementing a three sweeps approach.
• Sales agents learn that door-to-door visits can yield more sales than group presentations.

To generate demand for latrines, iDE coaches sales agents to speak with households about their sanitation needs. iDE provides these agents professional sales training, as well as ongoing support and coaching. Sales agent commissions are built into the selling price of the product, making the model sustainable for businesses and sales agents alike. iDE also identifies and trains local entrepreneurs to meet this new demand for sanitation products.

iDE recognizes that market actors are not always necessarily incentivized to reach the poorest. However, reaching the poor is central to iDE’s mission; we operate with the goal of supporting an equitable market that works for everyone. As such, iDE strives to be poor-inclusive; that is, the percentage of poor households reached is, at the very least, reflective of the distribution of poor households across the general population. To this end, iDE thinks about implementing sanitation marketing in three “sweeps.” While this approach does not target the poorest at the outset, it does aim to achieve maximum efficiency of resource allocation by first targeting those who are most willing and able to purchase a toilet, and then ensuring that financial resources such as financing and subsidies go to the people who really need them—the poorest of the poor.

The following is an overview of the sweeps model:

1. In the first sweep, sales agents target those who are willing and able to pay on cash—early adopters and some of the early majority market segment. This primarily includes households that have enough available cash and are willing to invest in a relatively new and unfamiliar product.
2. The second sweep focuses on reaching the early and late majority households, including poorer households, through targeted marketing, professionalized sales, product innovations, and the use of sanitation financing. This wave of purchasers includes households that have less cash on hand and/or a greater need to see their neighbors using a product before they are willing to invest themselves.
3. Sweep three targets the remaining “late majority” and “laggard” households without latrines (presumed to include the poorest households) through targeted subsidies and low-burden financing mechanisms like interest-free payment installment plans. Subsidies are “targeted” when they minimize negative distortions in the market that would result from an artificial price decrease of a product. By effectively targeting households that are poor and living in areas of high market saturation, subsidies can equitably improve standards of living for the poorest without damaging the sustainability of the market.

The Three Sweeps model is not indicative of the amount of times that a sales agent will visit a village. Sales agents revisit a village approximately every three to six months, following up with prospective clients in the intermediate. The Three Sweeps are a conceptualization of market segments with different needs and characteristics. Sweeps are not discrete, clearly defined thresholds for strategy, but better articulated as a spectrum. By identifying roughly where on this spectrum our operating area lies, we can more clearly direct our strategies towards meeting the needs of the current “sweep.” It is important to note that these sweeps are not exclusive rules for who to engage, but guidelines for how iDE structures, equips, and trains its sales team. As such, poor people are reached in the first sweep, and likewise, non-poor people are reached in the third sweep.

In the first years of iDE’s sanitation program in Cambodia, during the conduct of “Sweep 1,” sanitation coverage was around 30% in our operating areas. The market for selling latrines was wide open. Group sales presentations provided an efficient means for promoting a latrine product to the large amount of people who had not yet invested in one. Afterwards, iDE sales agents would comb the village with door-to-door sales presentations to engage those who did not participate in the group sale. Both methods had their advantages, but as the market matured, the effectiveness of group sales presentations decreased. As more and more people became toilet owners, the size of the group that a sales agent could gather for a presentation became smaller and smaller. The meetings were consistently attended by the same individuals who participated last time, often the elderly parents of homeowners who work outside of the village.

When the majority of the market reached the “Sweep 2” phase, direct door-to-door presentations were the exclusive means by which iDE sales agents was selling toilets. This necessitated deeper training and professionalization of sales staff to conduct consultative door-to-door sales presentations. Additionally, sales agents were equipped with referral information for households looking for financing for their purchases.

As the market moves into “Sweep 3,” iDE continues to make strategic changes to meet the needs of a generally poorer, reluctant market. We have developed new products to supplement the Easy Latrine, including three shelter models and a latrine pit upgrade product. In order to sell these products, we’ve invested in further training and professionalizing our sales agents to conduct presentations in a way that identifies and addresses the increasingly specific needs of a mature market. We’ve piloted and initiated a scale-up process to sell toilets to poor households with targeted subsidies in addition to supporting businesses to offer low-cost payment instalment plans for sanitation products.

At iDE, our clients are our lifeblood. As the sanitation market matures, iDE will continue to adapt our approach to the needs and constraints of those we are here to serve.