‘Eye-opening’ Impact Assessment: How Benchmarks Can Boost Social and Business Outcomes
Last month, Acumen launched our Energy Impact Report, a comprehensive look at our 10 years investing in off-grid energy. In the report, we shared the results of our work to measure the impact of off-grid energy access on end-users. Using Lean Data, our customer-centric, technology-based approach to impact measurement, we talked directly to thousands of customers who are using our investee companies’ improved cookstoves, mini-grid connections and solar home systems across the developing world. In this article, we go beyond talking about these results and discuss how they can be used, and are being used, for action.
We created our Impact Report at the resting point on our trek towards greater impact. We set out to learn, not just to celebrate the impact we’ve helped to create in the world – though that happened too, of course! That means we didn’t just measure impact and we weren’t focusing on proving impact. Rather, we were focusing on understanding and improving our impact by listening to customer voices to inform and guide us. We asked questions about challenges customers faced using their energy products, and how satisfied they were – all with the aim to do better and create more positive impact.
While the customer-centric data within the report is providing Acumen, businesses and the broader sector with details on the lives of off-grid families that we didn’t have before, what’s exciting is that the work has enabled us to create a social performance benchmark for the off-grid energy sector as a whole. Most importantly, we have now started to use this benchmark to inform decisions and maximise impact for more effective pro-poor business models. And we hope others across the sector will follow suit.
By creating standardised question sets, we, as a sector, can compare and contrast the impact that companies are having with like-for-like indicators. We can discern which business models create more impact for their customers, which products or services are better able to reach the poor, and even how impact levels differ depending on the country. We answered some of these questions through our core indicators, which focus on the income profile of the customer and assess whether we are actually reaching lower-income families. These indicators look at customer satisfaction, including ease of use – an important factor in challenging environments with sometimes low literacy rates. They also consider quality of life improvements – how important or valuable is the product for a family? – along with many other factors.
Using the benchmark – the average performance of the companies included – helps to identify which companies are underperforming relative to their peers. We can look at which specific strategies, processes or financing models the high-performing companies have. What are they doing differently that is working for their customers? We can then use this information to provide ideas for action for those companies that are not performing well.
Companies armed with their own personalised benchmark report can start to focus on whichever areas of impact could do with a little more attention. For example, some of our investee companies were reaching poor customers less effectively than expected. In response to the results of the Lean Data work, they have begun looking at ways to increase affordability and better reach lower-income households.
For other companies, focusing on reducing customer challenges and improving ease of use became a real focus, after the results showcased what an issue this was. This promises to be a win-win for improving impact and business outcomes. After all, customers who struggle to use their new energy product or service are less likely to purchase it again, upgrade it, or recommend it to their friends. And from an impact perspective, customers cannot experience the maximum impact if they can’t use their home system or cookstove effectively.
Getting down to the business of improving, we learned a thing or two from SolarNow, a solar home system company in Uganda. SolarNow is outperforming our benchmark in ease of use, customer satisfaction (measured through the Net Promoter Score®), and customer effort (ie: how easy it is to get an issue resolved). But this wasn’t always the case. When we first started working with SolarNow to understand its clients, we found a somewhat dissatisfied set of customers facing some real challenges using their home systems. Willem Nolens, SolarNow’s CEO and founder said at the time, “This data was a real eye-opener. I was shocked by some of the nightmares we made our clients go through.” In response to the results, the SolarNow team rolled up its sleeves and has spent the last year or two building a comprehensive process for training sales staff, equipping them to do their job effectively, providing a great installation service at their customers’ homes, and conducting check-in calls regularly from their customer service centre. They also have a free customer care line that clients are told about at installation and on check-in calls, and reminded of with a sticker on their system. SolarNow has shown its customers it cares about their experience, and it has built a system to deliver on that.
For investors or donors, there’s an opportunity to use social impact performance benchmarks to identify where capital or funding can be most effectively deployed to maximize impact for end-users or customers. At Acumen, early last year we started using Lean Data in our due diligence process when looking at potential investees, and we now benchmark the impact performance of companies we’re considering investing in. This allows us to look for opportunities and challenges and ensures that we’re using our money in the most informed and effective way possible, considering both financial opportunity and impact potential.
The hope is that we can all hold ourselves more accountable to a benchmark of success that is based on the impact we’re creating in the world, rather than simply on sales volumes and revenue. The dream? That the benchmark keeps moving up and we all do better at creating meaningful impact for those we seek to serve. After seeing the effort Acumen’s investee companies have put into doing better by their customers, I think this dream is eminently achievable.
Read more about the Acumen Energy Impact Series here.
Kat Harrison is impact associate director at Acumen.
Top/homepage image courtesy of Acumen.