Project Everest

Adopted Experiment

[Adopted Experiment]: Fuel I Timor-Leste July 2019 - Payment Plans

Lean Phase:

Channels and Revenue Streams


People within our customer segment have previous knowledge of payment plans.

People within our customer segment are willing to use a payment plan to purchase a stove.

Time Box:

Two weeks.  

Key Metrics:

Percentage (%) of people who have previously heard of or used a payment plan.

Success Points

Green Light Proceed:

Proceed to develop a payment plan and price test options. Consider how these payment plans could be implemented long term and while teams are not in country.

Success Point:

70% of people in our customer segment have heard of or used a payment plan previously.

Orange Light Optimise:

Empathise with customers to determine if they would be willing to use a payment plan and if they have previously had to the opportunity to use a payment plan, why they chose not to do so.

Empathise with customers to determine how they usually make large purchases.

Failure Point:

Less than 30% of people in our customer segment know what a payment plan is.

Red Light Failure:

Conduct research into other methods to make the stove more affordable for low income families and give the stove a wider reach.

Investigate other ways customers typically make a large purchase (e.g. how to they usually purchase a motorbike or materials for a house).

Experiment Build:

  1. Write a survey to identify peoples previous experience with payment plans. Include question accurately assessing their demographic/appropriateness as part of our customer segment.
  2. Approach 50 people within our customer segment to conduct interviews.
  3. Interpret results to determine pass/fail and any alternate methods customers use to make large purchases. Ensure people interviewed match customer segment.

Survey Questions

The following survey questions are not intended to be asked with exactly this wording. The intention of this questions is for our records only. All questions will be weaved into a natural conversation style type interview with care taken to always ask open ended questions. All questions asked will be framed in a way to be as non-leading as possible to prevent bias entering data.

  • How do you usually pay for expensive items?
  • How would you prefer to pay for a $75 stove?
  • Are you aware of what a payment plan is and have you used one before?
  • If yes to using payment plan, which stores are you aware of which offer payment plans?
  • If yes to using payment plan, how did you make payment?
  • If yes to using payment plan, over what period of time did you pay off the item/s?
  • If yes to using payment plan, how often did you make payment?
  • If yes to using payment plan, how have payment plans been enforced?
  • If no to using payment plan, what has stopped you from using a payment plan?
  • Would you prefer to purchase a stove for $75 outright, or would you prefer to pay $35 for a deposit and the rest (+ delivery) when the stove is delivered?

Guide to Running Payment Plans (open to ideation).

Before payment plans are established first ensure that PEV bank account is able to take invoice payments, as well as to whether they are possible. See experiment here

For an initial basic payment plan, a potential way to run it is as follows. Engage with the customer to determine payment amounts and timings that are preferable to them. For example $10 every two weeks, or $15 every month. Customers are to select a payment amount and frequency that works for them in the short term for testing purposes, however it is intended to set 2 or 3 payment options to simplify process on our end in the long term.

Send the electronic invoices that the customer can then take to the bank to pay the instalment, ideally in the timeframe given by us, however it would be acceptable if payment was made even it was late. (As this is a self-administered payment plan the responsibility to manage the payment plan would be on the customer, PEV would not have to chase payments).

When payments are due, send a reminder message through their chosen communication channel i.e. WhatsApp/email/text. Should be more of a friendly low-pressure reminder as this is a self-managed payment plan method and we wish to minimise impact on customers monthly income.

After final payment has been made, ensure that the stove will be delivered within an established period of time (i.e. 3 days dependant on how distribution is working at that stage of the project).

Making it clear to the customer that they will not receive their stove until payment is made in full. Customers will be given the option to receive a certain percentage of their payment back if they decide to back out at any point, however it will be made clear that once payment begins, they will not receive their full money back and must commit to the sale

NOTE: This is only an initial brainstorm on how this could work in the short term. With the lack of a microfinance project in Timor-Leste it is difficult to integrate a proper payment plan. We would love to hear anyone’s input on this process and any flaws they can see.

edited on 23rd July 2019, 04:07 by Lucy Preiss

Alexander Teicher Feb 27, 2019

With the self administered payment plan, as the customer would not receive the stove until the end, what value does this serve other than locking them in to a sale months before they receive the product, and then forcing said customer to save regularly to then complete their payments.

I think payment plans in Timor will be necessary for such a large purchase, but I don't think this will be highly effective as it is more so a forced savings plan with little incentive.

We could look at a kickback model similar to what was in place in Fiji where if payments are received on time then there is a discount (or rather no additional fee). Enforcement/collection however always becomes the issue so I understand the attraction of the customer led method.

Were you looking at having the same price for outright purchase and payment plan or would there be a difference in price?

Would appreciate input on this especially how payments have been going in Fiji.

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Thomas de Heus Feb 27, 2019

This is still a very tentative experiment and we are very open for how to actually run a payment plan. It's the enforcement and collection in Timor that's the problem as you said, and without a microfinance project here we want to be careful about overcomplicating fuel with a finance side in such an early stage of the business.

I like the incentivised discount idea, that would encourage customers to make payments on time. As far as the increase in price, this depends on the level of risk we bear for making a sale through a payment plan. If it's self administered and they don't recieve the product til the end there's little risk, but if they recieve the product immediately and pay it off then the idea would be to charge more.

Would love to hear more about how Fiji is making it work, as making the stove more accessible to lower income families is currently the biggest block with this business. I'll update this experiment with a better method if there is one we can easily implement.

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Andrew Vild 10 months ago

Status label added: Experiment adopted

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Lucy Preiss 9 months ago

Status label added: Proposed Experiment

Status label removed: Adopted Experiment

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Lucy Preiss 8 months ago

This looks great! Let me know when the survey is posted and I will adopt it!

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Lucy Preiss 7 months ago

Status label removed: Proposed Experiment

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Lucy Preiss 7 months ago

Status label added: Adopted Experiment

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