SmartLife is a social enterprise that sells pure drinking water and wellness products in low-income communities of Nairobi, Kenya. This multifaceted project’s key components are: a strong brand identity, a viable business model, and a high-touch subscription service for clean water, hygiene, and nutrition products. Designed by IDEO.org and implemented by Water & Sanitation for the Urban Poor (WSUP), Unilever, and Global Alliance for Improved Nutrition (GAIN), SmartLife is a one-stop, market-based solution, which can swiftly scale to other communities worldwide that are facing water, hygiene, and nutrition crises.
Where the product/service is being used
SmartLife has launched in Pipeline and Ongata Rongai, two low-income neighborhoods of Nairobi.
The Problems it attempts to solve or address
The world is in the midst of water, hygiene, and nutrition crises: 3.5 million people die each year from water-borne illnesses, 1.7 million children under the age of five die from diarrheal disease, and one out of three people in developing countries have vitamin and nutrient deficiencies. For the many urban dwellers who do not have potable water piped into their homes, buying water from vendors is a daily, often laborious chore. Globally, there have been mixed results in tackling these challenges, often resulting in siloed approaches. IDEO.org, WSUP, Unilever, and GAIN, on the other hand, took a human-centered approach and developed an integrated, scalable, market-based solution.
As global as this water, hygiene, and nutrition crisis is, it is particularly evident in Nairobi, Kenya. In Kenya alone, only 61 percent of the population has access to clean water sources. Diarrheal diseases are among the top 10 causes of morbidity and mortality, and 84 percent of preschool-aged children have vitamin A deficiency. For this reason, we tailored our solution to the urban context of Nairobi.
IDEO.org’s process for innovation is called human-centered design. It is based on the fundamental belief that the best solutions directly address the needs, desires, and aspirations of their intended audience. We always start with understanding the people involved and the context of a problem before identifying concepts and opportunities for design. We then quickly move to building prototypes and testing our concepts in the community to receive feedback and iterate until we come to a solution.
Five key community-based insights guided our design process on the SmartLife project. To name just a few, we found that a strong brand identity and multiple customer-service touch points would be essential to gaining Kenyan consumers’ trust and loyalty. Furthermore, people understand and strongly value clean water, which reinforced our assumption that the core driver behind the service should be the provision of safe drinking water.
SmartLife has incorporated several innovative technologies into its service offering, including subscription and billing services and a new health information platform. As both an Alpha and Beta partner, SmartLife has helped to evolve Hummingbill, a subscription management tool, to efficiently serve customers. The Hummingbill platform is designed to register new members into a database and then automatically bill weekly and monthly subscribers via MPESA. Another technology, still in the planning stages, is a custom MAMA platform, called Toto Health. This platform will offer a robust heath information service and link members with clinics to build a two-sided referral pipeline. Beyond fulfilling the health information aspects of SmartLife, partnering with a service like Toto at scale could potentially offer two unanticipated revenue streams for SmartLife—clinic referral rewards and health messaging for a fee from partners like governments or clinics.
We are very interested in knowing more about how the product reaches the market place, and thus the business model that has been developed. This may be country or regionally specific, and may be affected by government or other institutional involvement. Describe too any partnerships or other collaborative engagements that help to deliver the product/service to the market. Include in this write-up information about the pricing model used and the method of financing (loans, pay-as-you-go etc.).
The SmartLife service design was carefully crafted with business sustainability in mind, and includes two different subscription offerings—Everyday Essentials, a more basic offering to meet household clean-water needs, and Aspirational Wellness, which includes more personal wellness products.
The major capital costs for SmartLife are a water center, water treatment, transportation, and initial collateral. The operational costs are a sales team, facility and delivery staff, and marketing. The revenues for both the utility-based side of business, Everyday Essentials, and the wellness product side, Aspirational Wellness, include: water sales through subscriptions, deliveries, and self-service locations; business-to-business sales; and on-demand product sales.
Financial analyses of these two service models determined that the Aspirational Wellness business would be profitable given a high number of subscriptions, a low volume of water, and a high margin of profit for products, whereas Everyday Essentials would be profitable given a low number of subscriptions, but a high water volume per order. A comparison of these two models has shown that the Aspirational Wellness sales will be twice as profitable and will reach ten times the number of families compared with the Everyday Essentials program. Offering business-to-business options for both models also boosts profitability in each case.
Describe how close it comes to achieving the overall goals, and what measurements are being used to assess performance. If the product is still in the early stages of implementation, then comment as best you can about its success to date and when the next measurement milestone is.
SmartLife now provides water subscriptions and/or wellness products to more than 4,200 customers in its first year after launch. Among these customers, families comprise 90 percent of sales with the other 10 percent attributed to businesses. To date, SmartLife has provided these families and businesses with more than 167,000 liters of clean water, with numbers rapidly climbing.
The Design Expo is about sharing experiences and knowledge. Mistakes are a vital part of creating success, so explaining these to the reader will potentially be very helpful to others who are in the development and/or implementation stages, or who are looking for different ideas and improvements over what they are currently doing. The lessons learned can be anything to do with the product/service, and at any stage of the development. In respect of the marketing itself, identify known blocks to expanding the distribution (cost, culture, distribution etc.)
One piece of the puzzle that SmartLife has found particularly challenging is the lack of certain existing ecosystems, including nutritional products and support for service providers. In Kenya, the nutritional product industry is nearly non-existent, with the exception of a few new entrants (i.e. a new line of vitamins GAIN is developing in partnership with Phillips Health East Africa), and consumers do not have much history purchasing these items. To create a winning product offering, we’ve learned that we need to consider partnering with more potential entrants and show them the value of using SmartLife as a channel to get them into the market. Equally as challenging, the service provider ecosystem is nearly non-existent, leaving few companies to help ease the time burden of staffing or management. Everything about sourcing the resources for building out stores is still a ‘one-off’ task.
More about the design process: http://www.ideo.org/projects/designing-scalable-water-and-hygiene-businesses/completed
More about the final service: