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10 creative ways to encounter the problem of customer’s limited ability to pay for services

Thinking that your customer’s  and beneficiaries don’t have possiblity to pay for your services might seem like a problem that can’t be overcome.  But, here are some things you can do to approach this problem.  As this article by AcumenPlus shows, the solution might lie in addressing the customer’s ability to pay, shifting the company’s revenue model, or a combination.

Opening up to creative ideas

The basic idea around tackling the problem is getting creative with what you offer, who pays for it, when they pay, where you focus in the value chain, and how you decide to grow. It takes some rethinking, adjusting and trying to find ways to generate money-flows from a variety of sources. Here are some tips for how to do that.

Rethinking your offering

If you feel that your product or service  is useful, needed, and desired by your target customers, but they still are not paying for it, you need to design the solution in a more economical way. This means basically finding a creative way to deliver the same outcomes for your customers in a less complicated, and therefore less costly, way. This is usually done by product or process design, so be ready to question what you have and go for alternative solutions

Cross-subsidising the offers

Is there a way that you could be using profits generated from one product line to subsidize another?  Some products or services might be more lucrative or have broader appeal than other products that will never be profitable, even if they have powerful social impact. Use the former to pay for the latter.

Adjusting the cost model

You may have to redesign your product or service in order to cut costs, allowing you to lower the price. Here, the consideration is made on the relative costs of each of the key activities, key resources, and assets that are essential to produce or deliver the  product or service. Recognize the most costly ones, and consider consider if there is another path you can take to achieve the desired goal.

Cross-subsidising customer segments

Purchases from one customer segment who has a higher ability to pay can be used to subsidize or fund access to a lower-income customer segment. Serving both customer segments with a very similar offer is key for this approach to work. This means that ideally the same core technology and core competencies are leveraged when delivering value to both customer segments.

Generating value for a 3rd party

Sometimes it could be that a third party would be interested in paying on behalf of a group of customers. This could be a government or another business purchasing a product or service and passing it onto the end user, who does not pay.  As this approach might seem somewhat counter-intuitive, there are several ways it can really be a win-win-win way of working. The 3rd party might for example have a social mission that they want to take part to; they might want to improve their work or efficiency; or they might want to access your customers channels or to advertise to your customers.

Offering flexible payments

Sometimes people are ready to pay, but they need some flexibility to when to pay. Could you then be flexible and let them pay in parts, or with a longer payment schedule?

Providing pay-as-you-go -option

Pay-as-you-go model is a financing solution that allows customers to rent a product, while they make incremental payments until they eventually achieve ownership. Would this suit your product or service business?

Providing financing

Providing direct financing options can be an effective way to help customers bridge the gap between the price point and their ability to pay.  Here the key is in partnering with a local lending institutions that provide financing services.

Moving along the value chain

Operating businesses at multiple stages of the value chain provides another unique opportunity for cross-subsidization. At some points in the value chain, the business may have larger profit margins that can then be used to subsidize other areas of the value chain which generate social impact, but might not be profitable. Parts of the value chain are for example manufacturing, sales, delivery, and after-sales service.

Adjust your scaling strategy

Scaling your business – investments into growing the team, improving infrastructure, or purchasing new products to make the business more efficient –  may not need to be funded through profits alone (However it is usually the best way). Considering to seek alternative capital like philanthropic donations or grants might be sometimes a smart approach.

 

Read the AcumenPlus’ full article about these 10 ways to adress affordability, with excellent case examples here. 

 

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Freedcamp – A free project management tool

Freedcamp is a great option for your collaborative project management. We use it, and here’s why – and how.

 

Free to use

Freedcamp basic features are free to use. Just register, and start creating your project flows and content. Of course paid plans with extra features are available. However, experience has shown that free tools are quite enough for most projects.

 

A nice variety of tools for an effective project flow

Freedcamp tells customer that they have “all the tools you need to be successful, in one place”. This is not far from the truth. Things get done with features such as task lists, subtasks lists, Kanban board and Gantt chart (Gantt is not available in the free version). And if you like, task lists or parts of them can be kept private for certain users. Important things are featured in your project homepage, from which it’s easy to navigate to different projects, and features of a certain project.

Freedcamp tasks Picture: Freedcamp.com

Project managers are able to assign tasks to named people. The system also sends reminders to your e-mail if needed. An aspect that is very nice especially if you are working with multiple projects at the same time – as we often do.

Planning and discussion is possible with the calendar, milestones, discussions, wiki and other handy features that bring the more social and sharing aspect into projects. Recent activity -function let’s you see what has been done since you last time visited the project.

Freecamp planning Picture: Freedcamp.com

There are also extra possiblities to make working more efficient and safe. You can for example set passwords, take backups, store files, create project templates and integrate 3rd party services (such as Google Drive, Dropbox, OneDrive).

How we use it – an example of a multi-national collaboration project

As we are – in the Social Enterprise Support Network of the Baltic Sea Region -project – working from many countries and organizations over a 3-year long period of time, it’s been necessary for project management and efficient follow-up of tasks to have a common tool / place for collaboration. Freedcamp was found to serve us very well.

This is how we use it currently:

  • We keep files stored in the system – organized by country and theme. Project documents, travel documents, presentations, photos, meetings minutes etc.
  • Project tasks  are listed and assigned to respective employee, with e-mail reminders. As the tasks always have a due date, they can be seen also in the calendar. Progress on a certain task is used to monitor if the task is in progress, or ready. All previous tasks are also visible in the list after they’re done, which makes it very easy for a project manager to see the full picture of how things have been done, and if they’ve been done in time.
  • Discussion tool is used for keeping discussion on important project decisions away from fully packed e-mails – so everyone can easily refer to the discussion also later on.

With already these basic features, the workflow can be nicely managed, and everyone kept informed of what’s going on right now, and what is there to be done the next. So we haven’t found it necessary to use any of the paid features.

Try it yourself – maybe it can work for you too, and your money is used for something else – preferably for creating some positive social impact !

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Measuring the Good – Developing Impact Measurement in Finland.

(NOTE: The links from this article refer to pages that are currently only available in Finnish)

Finnish association for social enterprises ARVO has partnered during the recent years partnered with a range of high-profile impact investing and developing partners –  such as ME-Säätiö –  in an impact measurement development project called Hyvän Mitta (Measure for Good). The project has had an ambitious aim: to develop common tools for impact measurement to be used by the impact ecosystem in Finland.

Measuring Good since 2016

Since 2016, the project has done systematic work on this theme. The results of the development phase 1 are already visible. On top of the 12 case organizations’ impact assessment reports, an outline of the work done and findings of the impact assessments can be found now in the project’s materials.

Phase 2 of the development work is still ongoing. There are new pilot organizations involved, and more defined work done in their impact measurement. As the first phase introduced a new impact modelling tool, the Impact Chain, work is now being done to put this model into action.

 

Impact Chain – a model for systematic impact work

Impact Chain is a systematic framework for measuring impact. As it defines the society’s NEED and an organizations VISION and GOAL on how to meet this need, takes into account the RESOURCES and ACTIONS of an organization, and goes on the follow up on the RESULTS and IMPACT, all the way back comparing these to the original need – it gives an interesting, comprehensive yet quite simple-to-use basis for impact work.

Impact Chain

The tool is described in more detail here, with instructions on where to start with your impact work. For some great tips on how to use the tool, check also this blog post.

 

From data chains to impact stories

The beauty and potential of this kind of systematic framework, if used as an everyday tool in leading for impact, is the way it may help an organization to streamline their data. As data is gathered from each part of the chain, and organized in a systematic manner, it eventually forms a data chain.

There’s naturally a lot of work behind all this impact modelling and data gathering. But when done in an careful manner, prizes might make them well worth it.  Better decisions can be made, based on measured facts, on how to use the organizations resources and what kind of actions to take to make the impact even wider.  And not only that. Impact communication – telling your own story of change, the logic of how the impact is achieved – becomes much easier. Data chains can be turned into stories of impact.

 

Communicating impact

After the good has been measured, it’s time to tell the impact stories. In an engaging and informative way, by using modern media. The latest work package of Hyvän Mitta project, Vaikuttavuusvideo – Impact Video –  was launched in June 2019, to do just that. Here, research is done on how and where the Finnish impact producers are communicating their impact.  Impact producer’s capabilities to communicate their impact is developed, and piloting will be done on how to – in a most impactful way – communicate social impact on video. A short overview of the project aims can be found in English from the producer’s website, and more info in campaign site vaikuttavuusvideo.fi.

 

Measuring the Good

In short, measuring the good is all about cooperation, systematic leadership and modelling of impact, gathering relevant data, and eventually telling the impact story. For impact investors, customers, employees, partners and audiences of difference kinds, it’s ultimately about getting to know what kind of social change is really taking place and where.

Keep your hearts and minds open – proven impact coming up!

Success story: Stagecast

“All of a sudden it was not only us, three KTH students who were secretly working upon an idea, but a whole eco system who believed in us and were willing to support us to make it happen”

Name: Hedvig Ahlgren
Title: COO and Co-founder of Stagecast

What is your connection to SSES, and how has it influenced or affected your journey?

Me, Jonas and Markus applied to be part of the SSES pre-incubator program already after 3-4 months of working on our business idea. Once we got in, I remember we all felt that “wow, it’s starting now”. Being provided with a cool co-working space, having a coach to meet on a regular basis and also being around other people working on their own ideas for the first time gave a completely new dimension on entrepreneurship to us. All of a sudden it was not only us, three KTH students who were secretly working upon an idea, but a whole eco system who believed in us and were willing to support us to make it happen. That was really cool, and I believe it is of extreme importance to have this kind of networks around you when you are about to start your project. So, thanks SSES for believing in us so early on!

How would you define success?

I believe your own definition of success will always change as an entrepreneur. For example, l could actually say now that we have reached a level of success: having a great team, being engaged, working on our product and having fun while doing so. Now we are of course looking much further than that, but to be frank that has been a big milestone for me – so I guess that is success! The definition for me would then be: continuing to reach important milestones and having (mostly) fun in the meantime!

Do you enjoy working in interdisciplinary groups? If so, what are the benefits?

My master at KTH was called “Integrated Product Design”, where we thought a lot of how to work in cross-functional team. I definitely enjoy it, but I also believe that is extremely crucial for the innovations coming up in the future. There are no longer (well, at least very few) individual geniuses who can come up, develop and also commercialize an idea of their own, today we need and should to collaborate in order to make this happen!

Source: https://www.sses.se/stories/stagecast/

More: : https://www.stagecast.io/

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Dar kartą apie socialinį verslą – 7 socialinio verslo principus

Socialinis verslumas yra palyginti naujas terminas. Jis buvo pradėtas naudoti vos prieš kelis dešimtmečius. Tačiau šio termino vartojimą galima rasti per visą istoriją. Devynioliktame ir dvidešimtajame amžiuose buvo verslininkų, kurie stengėsi panaikinti socialines blogybes.

Be to, yra daugybė visuomenių ir organizacijų, kurios veikia vaikų teisių srityje, , tausoja aplinką, tvarko atliekas ir tt. Be socialinių problemų, socialinis verslumas taip pat apima ekologinių aplinkos problemų sprendimą. Dabar socialinio verslumo sąvoka yra plačiai vartojama, be to, ir įvairiomis formomis.

Reiktų paminėti, kad šiuo metu socialinio verslumo koncepcija kai kuriose kolegijose ir universitetuose  įtraukta kaip atskira vadybos kurso dalis.

Šiuolaikinis jaunimas supranta socialinių inovacijų naudą ir pasinaudodami savanorystės galimybėmis siūlo   puikias idėjas bei paslaugas, kad per socialinį verslumą greičiau galėtų  atnešti socialinius pokyčius.

Tai kas yra tas socialinis verslininkas? Tai pilietis, kuris susisurdamas su aktualia socialine problema,  imasi ją spręsti naudodamas novatoriškus sprendimus. Socialiniai verslininkai siekia pakeisti visuomenės veidą. Ar tai būtų sveikata, sanitarija, švietimas, aplinkosauga,  jų yra visur.

Todėl prieš pradedant veikti, visada reiktų prisiminti 7 socialinio verslo principus išdėstytus Nobelio premijos laureato Dr. Muhammad Yunu :

  1. Socialinio verslo misijayra išspręsti tam tikrą socialinę problemą visuomenėje (per socialinę inovaciją arba sėkmingų praktikų pritaikymą).
  1. Socialinis verslas yra finansiškai tvarus, turi gyvybingą verslo modelį.
  1. Socialinis verslas nemoka dividendų investuotojams– jo tikslas nėra akcininkų kapitalo maksimizavimas.
  1. Pelnas eina socialinei problemai spręstiarba yra reinvestuojamas į socialinio verslo plėtrą.
  1. Socialinis verslas veikia darnoje su aplinka.
  1. Darbuotojai gauna rinkos lygio arba aukštesnius atlyginimus, jų darbo sąlygos yra geresnės nei vidutinėje įmonėje.
  1. Kurk su džiaugsmu!

 

References:

Engaging citizens in the social innovation

When launching a social business or a social innovation project, there are several different aspects that should be taken into consideration. Among various practical things such as the right time, location and funding, the social innovator should always seek for another very important aspect – participation and engagement of the community. Social business or other social innovation ideas are usually born when facing a certain societal issue or challenge, therefore engaging the local community in different phases of the business or social project is not only important – it is crucial.

A European research report “Engaging Citizens in Social Innovation: A short guide to the research for policymakers and practitioners” suggests different ways how to engage citizens in social innovation. At the first stages of the innovation or launching of the business, citizen involvement can be very valuable for the purposes of “informing about the present states” – providing information regarding their needs and challenges that they are experiencing at the moment. This information and opinion gathering can take different forms – research and consultations, practical workshops or online activities. The opinions and experiences of the community members can be very valuable also when developing future solutions – through such activities as idea camps or competitions people can help to create better solutions for social innovation projects or social businesses.

The research report indicates three main ways of how citizens can be engaged in social innovation processes. Providing information and resources is one of those approaches. As previously stated, the opinions and experiences of the citizens are very important throughout all the phases of social innovation projects – either by helping to define the main challenges and needs or in later phases when evaluation and feedback of the involved people is of very high importance. This category also involves providing resources – not only time but also money. Local people can get engaged in the social innovation projects by volunteering or donations –  therefore providing very practical support for social innovation. The second way how to engage the local community is through problem-solving which essentially means engaging groups of people in the development processes. Involving people with different backgrounds can be very beneficial to a social initiative as it helps to make it valuable and useful for a variety of social groups in the local community. Engaging in the problem solving also means involving people who are facing specific challenges that the social initiative or business is trying to tackle – when those initiatives are not done for the people but are done with the people. The third approach to engage citizens in social innovation is through taking and influencing decisions. This form of engagement is more consistent and requires continuous involvement and cooperation with the people rather than just taking part in events or workshops. Through this approach, the community is given quite a significant power in decision making. A very good example of this approach is participatory budgeting when the local community is given the power to decide on the spending of a certain part of the municipal budget.

There are many reasons why to strive to engage the community in the social innovation processes. First of all, sometimes the people who are planning to launch the business or the social initiative are not very well informed about the actual desires and needs in society. Asking them to engage and share their thoughts and actual every-day challenges may render the social initiative a lot more useful, valuable and legitimate. Moreover, engaging citizens through workshops and competitions can lead to new innovative ideas as often the local people themselves are full of genius ideas on how to solve the challenges that the community is facing. Involving community members often means cooperating and finding common solutions with people with completely different opinions, experiences, and viewpoints. This diversity of approaches can help to develop the social business or social initiative further and make it more appealing to various groups of society.

Read the full research and also a few interesting case studies here: https://youngfoundation.org/wp-content/uploads/2013/11/Engagign-citizens-in-social-inno.pdf

 

 

 

(Davies, A and Simon, J, (2013). Engaging Citizens in Social Innovation: A short guide to the research for policy makers and practitioners. A deliverable of the project: “The theoretical, empirical and policy foundations for building social innovation in Europe” (TEPSIE), European Commission – 7 th Framework Programme, Brussels: European Commission, DG Research.)

Wildhearts

WildHearts is a social enterprise in Glasgow, Scotland, that sells office supplies and document management services to large companies. WildHearts use the profits to offer entrepreneurial education and micro-finance for young people in the UK and in the rest of the world.

WildHearts is based on a simple business idea – “social innovation and social change can be created through a paper clip”.

Mick Jackson, who is behind WildHearts, got the idea for the company in 2006, when he was employed as a manager in a large traditional company. Here had seen that many large companies buy for billions of pounds so-called “invisible” goods such as. paper clips, pens, toner for printers, paper, uniforms, furniture etc.. At the same time, the companies are often more or less indifferent to where they get the goods from. Mick Jackson therefore asked his business contacts: “If I can offer these products at a competitive price, if the service is good and where 100% of the profits will go towards creating social change in Scotland and the rest of the world, would you buy from my business?”. The answer he received was a resounding YES.
This was the starting point and since then, it has been the foundation of WildHearts, which today has some of the world’s largest companies as customers.

WildHearts is one of the UK’s leading B2B companies in terms of creating social impact. The company makes it possible for its large customers such as Johnson & Johnson, Zurich, Delloitte, Amey and Serco – to create positive social impact simply by purchasing their office supplies and other services at WildHearts.

WildHearts Office offers more than 35,000 products at competitive prices and at the same time has a good customer service.

Besides office supplies, WildHearts also offers furniture and interiors, printer services, working clothes, data archiving and document management (from transporting documents to storage and labeling). With its many products and services, WildHearts´ many companies allow customers to purchase their office supplies and office services from one provider. This helps make it simple and cost-effective for businesses.

All revenue helps fund the work of the WildHearts Foundation, a registered charity. (Registered Charity SC037072). The Foundation is committed to combating economic inequality and helping vulnerable people in the UK and in the rest of the world.

Basically, WildHearts believes that by supporting the creativity, that many people have, the company can enable them to manage their own lives and become more resilient to the challenges they face. The idea is reflected in all social initiatives of the Foundation ranging from helping female entrepreneurs in Malawi in difficult situations to strengthening young people affected by social immobility in the UK.

WildHeart supports these people through various forms of micro-investment, so they get the chance to become entrepreneurs and start their own small business that can make them self-sufficient.

For example, WildHearts is trying to combat gender inequality, which is a major problem globally, through their StartHer Strategy. WildHearts ‘StartHer’ Strategy supports women and girls in the developing countries through three initiatives: incubation, education and health.

First of all, WildHearts gives them access to finance. 75% of women in the world do not have access to any kind of funding. This is, in fact, an unparalleled gender discrimination. So in this regard WildHearts’ micro investments makes a huge difference.
Next, WildHearts’ education program gives the women and girls access to tools and the learning they need.

Finally, WildHearts health program ensures that the girls have access to menstrual products and are taught how to use them,  so the girls do not leave school because of problems and shame about menstruation, which is a general problem in many developing countries.

Micro-Tyco

To support entrepreneurship and entrepreneurial thinking, WildHearts has developed the Micro-Tyco program. Micro-Tyco is a month-long entrepreneurial education program that enables participants to practice and practice business at a very basic level and in a safe ‘micro’ environment. Teams from schools, universities and businesses get one pound in initial capital and then get a month to make it grow as much as possible.

The Micro-Tyco program helps to unleash the participants’ latent talents, as well as promoting entrepreneurial thinking, improve skills and teamwork.

Participants in the program are also taught basic business skills by world-class Micro-Tyco mentors, such as Josh Bayliss, director of the Virgin Group and Thérèse Rein, contractor and former First Lady in Australia. They also get access to the ‘Micro-Tyco Method’ an eBook with entrepreneurial guidance.

One of the most creative ideas that Mick Jackson has experienced through the programme was a boy who exchanged his one pound to a 100 shilling pieces, after which he got the local priest to bless them. The blessed shilling piece he then sold for 1 pound each and thus ended up growing his one pound to 100 pounds.

To recognize the participants for their entrepreneurial qualities, wildHearts has created the “Micro-Tyco Excellence Award”, in collaboration with The Social Innovation Lab at Babson College, the world’s leading entrepreneurial school. Micro-Tycos also have the opportunity to further expand their network on Future Talent Forums, Micro-Tyco Master Classes and WildHearts GEL Summits.

All the money created by Micro-Tyco participants is investing by WildHearts in micro loans for poor entrepreneurs in developing countries. In this way the participants in the program experience, that they become entrepreneurs in order to fund another entrepreneur who needs it.

By linking business practices with social impact, the Micro-Tyco program also aims to inspire a new and future kind of leaders that our world needs and deserves.

WildHearts runs the Micro-Tyco program for free for both schools, colleges, universities, community groups.

In relation to companies, Micro-Tyco has proven to be successful in identifying and developing talent, and the programe is now used by the world’s leading companies, such as Deloitte, Johnson and Johnson and Barclays as part of their recruiting and employee development strategies.

 WildHearts´ Impact

WildHearts has created great positive social changes through its work since the start in 2006.
– 45,000 people in 25 countries worldwide have participated in the Micro-Tyco program.
– Positive life changes have been created for 300,000 people
– 7 million pounds have been invested in positive social change.

You can read more about company’s impact here

In addition, WildHearts also works extensively with the UN’s world goals and specifically addresses approx. half of the goals. You can see a more detailed description of WildHearts work with the UN’s world goal here

More about WildHearts at: www.wildheartsgroup.com

Watch interview with WildHearts founder Mick Jackson from TEDx in Glasgow 2016 here