Marketing in the poop business
When running a business, having a product or service to offer isn’t enough — You need to make it known too, but how do you market services of the dirtiest job in the world?
In business, finding effective ways to open the door to awareness is crucial. In most cases, once a product or a service is established, companies pursue their marketing journey by starting an online presence (website, social media, etc), using mass media branding, and hope to attract customers. Although this constitutes the starting point, understanding the proportion of sales from each marketing channel and setting strategies to optimize the most efficient channels can make your marketing efforts much more effective.
Pit Vidura — a fecal sludge collection and transportation service provider that is focused on serving low-income households in Kigali, Rwanda — is translating these marketing principles to make their business viable. To reach its goal of serving 1200 households per year, Pit Vidura needs to increase the demand for emptying services. But how do you market the dirtiest job in the world at a low cost?
From 2019 to 2020, the team conducted a pilot to increase marketing efforts through different channels. The channels included the use of sales agents, duka shops (local vending stores), website, radio ads, employee referrals, posters, and flyers. We leveraged routine data that the team collects on potential customers seeking our services through our toll-free call center. Some of the information collected here includes customer contact information, work orders, and how the prospective customer heard about our services. Altogether, this information was used to assess the performance of each sales channel.
At the end of 2020, we recorded a 67% increase in customers served per year. The proportion of sales acquired through each marketing channel is shown in figure 1 below. The analysis showed that 70% of all acquired customers came from 3 marketing channels: sales agents, repeat customers, and customer referral.
Fig 1. Leads generated by sales channels (%)
The cost of acquiring a customer differed from channel to channel (Figure 2). To assess the Customer Acquisition Cost (CAC) for each channel, we divided the total marketing campaign costs of each channel by the total number of customers acquired through it. Other costs such as overhead, communication (through our toll-free line), and job assessments were considered similar to each customer acquired regardless of the acquisition channel. Therefore they were not included in the calculation.
Fig.2 Customer acquisition cost per channel (USD/Customer acquired)
Here is what we learned from each sales channel:
Sales Agents involve door-to-door marketing using trained sales agents. The sales agents earn a commission for each customer referred. They are assigned to specific areas and provided marketing materials such as branded t-shirts, a sales binder, a product catalog, flyers. This channel can have a wide reach, is easy to track, generates potential leads, and increases clustering opportunities as the sales agents can easily identify potential clusters in their assigned zone. On the other hand, it requires regular sales agents’ supervisory check-in, training, and motivation as well spending on marketing materials like flyers, t-shirts. From our assessment, we found that the performance of sales agents dropped by 35% between 2019 and 2020. We attribute this largely to limited door-to-door movements permissible due to Covid-19 lockdown measures.
Sales agent explaining Pit Vidura services to a business owner.
Targeting Repeat Customers and Customer Referral system: For years, these channels have proven to be one of the most powerful forms of advertising over other media. As this channel grows with the number of customers served, building customer loyalty and satisfaction pay up. Some of the ways Pit Vidura does this include: a) conducting a customer satisfaction survey to understand the customer’s needs and gauge satisfaction with our services, b) leveraging customer relationship management tools to collect information about how often toilets fill up so that we can follow up when it is about to be full by sending an SMS. Through these strategies, the number of customers from these channels tripled within the test period. Since we used the simple CAC calculation method, the cost of this channel was null. However, in the complex CAC method: overhead, communication, and pit assessment costs would make it not free.
Pit Vidura Employee Referral: Until recently, pit emptiers are only paid for fecal sludge collection and transportation tasks executed (as written in their job description). However, we have now given a monetary incentive to pit emptiers to market the service while they are in the field. During and after pit emptying, the team distributes flyers to raise awareness in the neighborhood. Offering a monetary incentive to employees who successfully refer a customer has increased the percentage of customers acquired through this channel by 77%. Before giving the incentives, only 4% of the total customers came from this channel, but with the incentive, 18% of the total number of customers acquired per year come from employees’ referrals.
Radio: We ran advertisements on local and national radio stations which air on residential channels as well as in buses. Although this channel has a wide reach, the number of potential leads generated is comparingly low. Some prospective customers reached through this platform only called to make preliminary inquiries, many were located outside our area of operation (outside Kigali), and others were prank calls and/or spammers. In addition, the cost of advertising through this channel is relatively high. In the future, we hope to employ strategies that use integrated voice response (IVR) to make processing received calls more efficient and effective.
Truck Branding: All trucks that provide fecal sludge services can be recognized by their distinct branding, but does the branding return the investment? Although this channel increases the brand visibility as the truck moves around, only 5% of all sales came from this channel during this study period. The advantage of this channel is that the customer acquisition cost reduces over time since the branding is a one-time investment over a long period.
Pit Vidura’s branded exhauster truck (20m3).
Duka shops: These are local stores and kiosks that sell day-to-day household items. Pit Vidura partnered with duka shop owners to brand them with Pit Vidura brand colors and logo to market our services. Each duka owner earns a commission per customer referred. The purpose of using dukas was to market our services and at the same time help in clustering as the duka’s customers usually live near the shop. However, dukas did not perform as expected which raised the cost of acquisition through this channel. One of the main reasons is that the dukas owners were busy with their business to spend time marketing our services or collecting lead information. Also, the majority of the leads acquired through this channel were just interested in preliminary inquiries.
Left to right: Branded Dukas, Shop owner being trained on Pit Vidura’s services.
Other: In addition to those mentioned above, we advertised on platforms such as the company website, social media channels, local government offices, community meetings, and various posters distributed throughout the city. Although these channels’ performance was not high compared to those mentioned above, we anticipate that they have the potential to generate demand with more investment in these channels.
As the collection and transportation of fecal sludge mostly rely on private companies, increasing demand for services through effective and efficient sales channels can keep the business viable.
A common factor among the top 4 successful channels that generated 80% of all acquired customers — namely sales agents, repeat customers, customer referral, and employee referral — is the way they appeal to customers’ loyalty and foster trust. This showed that people will most likely request emptying services if informed about the services in person or by a trusted source. However, sales agents and employee referrals channels require an incentive and marketing materials to make them more efficient.
As in any business, the success of marketing campaigns depends on the quality of the service delivered. We strive to continue offering high-quality services and staying in tune with our customers’ needs and desires.