Thursday
July 1
2010

Rishabh Kaul

Stories from Sarvajal’s Turf

This summer I have been working in Sarvajal’s franchise business development (FBD) team. Sarvajal, as we have mentioned numerous times on this blog before, is an enterprise that establishes water franchisees that provides clean water to India’s rural community at a rate that is ultra affordable (0.005 cents/Liter) and in turn also fosters entrepreneurship. They were also recently awarded the Sankalp Award for Emerging Enterprise in the Water, Health and Sanitation category.

On my first day at the job, Anand Shah (be sure to read his blog on Social Edge), the CEO of Sarvajal, explained to me how FBD was possibly the most exciting as well as critical department of Sarvajal. FBD has a long term as well as a short term motive. In the short term, the FBD team is directly involved in increasing the company’s (as well as the Franchise’s) revenue through door to door marketing, through public electrolysis demonstrations, by introducing various flexible schemes that promote multilevel as well as word of mouth marketing, all with the motive of increasing the number of current customers and by providing a boost to the sales.

However, in the long term the FBD team is strengthening Sarvajal’s brand presence. It’s making sure that every time someone saw a blue drop somewhere they’d know exactly what to expect: quality of the highest order at the most affordable rate.

But what it is really doing is creating soft Intellectual Property. IP about how to sell directly to the rural poor and develop not only a set of best practices, but also next practices. As Jay, the CFO at Sarvajal, reminded me, “Almost all the literature on rural marketing focuses on the rural market as a whole, there’s is no talk about individual households, about what each of them think when you go and try to sell them something.”

And once you know that, you can extend this model to other services and products. Companies all over the world are trying to figure out how to sell in rural India, this information is gold to them.

So for the next one month I was on my own working with various franchisees. My journeys took me to remotest corners of Gujarat, where I traveled extensively in the outback and lived with the franchisee as a member of his family. It was an incredible experience, for me, but also for the company because I brought back valuable information about the business conditions in each location, about the potential consumers’ spending pattern, about the competition, and this would help Sarvajal enhance the value proposition they deliver to our franchise as well as end users. Be it by introducing new schemes for public schools, or sponsoring cricket tournaments for the local school, or even working on new referral schmes and so on.

Apart from that I helped one of the franchise owner with his operations, and another one in maintaining his daily accounts (he was losing way too many bottles) as well as evangelize Sarvajal for his and the nearby community.

And before I knew it, little by little I could feel the franchisee being more connected to the Sarvajal brand, truly believing in the power of social entrepreneurship and understanding that low margin high volume businesses can work in these corners. Of course this isn’t a case of romanticizing social entrepreneurship, what we’re doing is merely scratching the surface. This method of handholding where I went and stayed with the franchise in his home, experiencing the problems he was facing (be it the mosquitoes biting in the night or the issue of cartels in the nearby area) also improves franchise relations with the company drastically.

So some of the interesting things I found out were:

  • Most people look at water as a free good, an essential commodity. They haven’t paid for it in years, so why now? They would rather spend Rs 5 on tea every day and much more on tobacco (Gujarat loves its tobacco) than Rs 5 on a bottle of water. They need to be explained about how water levels years ago have gone deeper. Most of the times, what finally works are things they can see. We use a host of instruments to show them the real contamination in their water.
  • For any business, especially social enterprises, cartels pose a serious threat because they engage in price fixing, which creates a lot of dead weight loss. For example RO water in heavily industrialized South Gujarat is sold at a minimum of Rs 25 per 20 Liters and this is where Sarvajal’s 5 Rs per 25 Liters completely destroys the cartels’ business. In a small village where people don’t want to spoil their relations with other town folk, marketing becomes a challenging task, hence one has to gain the trust of the franchise first and then ask him for possible solutions and areas where what kind of marketing would work.
  • Businesses are run differently in different parts of India. In the less industrialized Northern Gujarat, where disposable income is less but so are other daily costs, the major problem is to convince people to drink healthy water and referrals and word of mouth work wonders here. However in South Gujarat, the challenges are different, which include price control, and greater emphasis on maintenance since the raw water used in the machine are generally of a higher TDS value.
  • It seems like an oft repeated thing, but India is a very diverse country. Different places have different customs and traditions. While I could enter any rural Gujarati household with ease while on our door to door marketing rounds, I would probably have to be much more careful while doing it in Rajasthan where a lot of families still follow the Purdah system.
  • Gujarat is an amazing place to run such an enterprise primarily because of the Jyoti Gram scheme of the Modi Government under which every single village in the state has 3 phase, 24 hours unlimited electric supply (since our machines require electricity).

Technology is of course an integral part of their model. Much has happened since they spoke of their work on their two new technologies here. They have already started using the wonderful remote controller for their machines and are applying finishing touches to their point of sale dispensing service (which works like an ATM but for water).

The company looks at these systems as more of a governance tool than a compliance one. So they would know when something would happen to the machine even before franchisee would know it, and by the time they would report it to the HQ, the maintenance folks would’ve already gone there to fix it. That’s the sort of service Sarvajal provides for its franchisees.

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