Project Everest

Experiment Results

[Experiment Results]: Revenue Streams - Payment Plans - Fuel I Timor-Leste July 2019

by
RickM
+1
Submitted by
RickM | 3 months ago | in Sustainable Fuel Consulting - Timor-Leste

Experiment Design Post: https://projecteverest.crowdicity.com/post/1027960

 

Lean Phase: Channels and Revenue Streams

 

Assumptions: 

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.

 

Results: 

The success points for this experiment were:

  • Green: 70% of people in our customer segment have heard of or used a payment plan previously.
  • Red: Less than 30% of people in our customer segment know what a payment plan is.

Based on the survey data collected from 50 individuals in Dili, Dare and Hera within our customer segment, we can ascertain that 58.3% of people knew what a payment plan was, with 32.1% of these people having used one before. These results indicate an “orange light”, suggesting that optimisation is necessary. The optimisation strategies as outlined in the experiment proposal are given as follows:

  • Empathise with customers to determine if they would be willing to use a payment plan and if they have previously had 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.

In order to save time on future empathising, these questions were built into the payment plan survey. Asking these questions before the fact would allow us to immediately gauge the steps that would need to be taken to determine the suitability of payment plans for potential customers.

The following graphs depict the results of the survey questions and are accompanied by both quantitative and qualitative analysis.

Figure 1

This graph illustrates that of the 47 people who responded to this question, there were 46 responses for cash upfront. This indicates that there is both a strong preference for paying upfront with cash, and that this is the most established method of payment.

 

Figure 2

This graph illustrates that of the 42 people who responded to this question, 23 people (54.8% of people) would prefer to pay upfront, 18 people (42.9% of people) would prefer to use a payment plan, and the remainder would prefer to pay via invoice to a bank. With respect to figure 1, this indicates that despite people usually paying for items with cash upfront, there is a sizeable proportion of people (42.2% of people) whose preference is to pay using alternative methods. What this suggests is not all people are satisfied with their current options for making payments.

 

Figure 3

This graph illustrates that of the 48 people who responded to this question, 28 people (58.3% of people) knew what a payment plan was, and 20 people (41.7% of people) did not. This indicates that there is a good knowledge of payment plans among the general population. Of those who did know what a payment plan was, 9 people (18.8% of total, 32.1% of those that knew) had used one before, and 19 people (39.6% of total, 67.8% of those who knew) had not used one before. This indicates that while most people have heard of payment plans, roughly two thirds of those people had not used one for one reason or another.

 

Figure 4

This graph indicates that of the 19 people with whom this question was asked, 14 people (53.8% of responses) had not used a payment plan because paying upfront was seen as an easier alternative. Moreover, 7 people (26.9% of responses) responded that they had not used a payment plan because the option did not exist for the product they wished to purchase. 

Figure 5

The graph illustrates that of the 40 people who responded to this question, 25 people (62.5% of people) would prefer to pay outright, versus 11 people (27.5% of people) preferring to pay over two installments, the first being an initial deposit and the second being at delivery of the product. What these results suggest, particularly in reference to figure 2, is that while a sizeable proportion of people would prefer to pay using a payment plan, paying over two deposits and/or receiving the product until after the final payment were not seen as preferable outcomes.

 

Validated Learning: 

The results of the survey support both assumptions made by the previous team that people within our customer segment have previous knowledge of payment plans (58.3% of people) and are willing to use a payment plan to purchase a stove (42.9% of people).

Having surveyed 50 people, it can be said with reasonable confidence that the results obtained are representative of a broader population. As such, the results being well above the failure point is a clear enough indication that the experiment was successful.

Data was obtained from Dili and two of the surrounding areas, Dare and Hera, in an effort to provide a wide pool of data to infer results from. However, due to time constraints and transportation costs, much more data was collected in Dili (34 surveys) than in Dare (9 surveys) and Hera (7 surveys). Consequently, should there exist any trends in the Dili population which differ from those in the Dare and Hera populations, these would have a strong influence on the trends of the overall data i.e. skewness. Moreover, as not all questions in the survey were asked to each surveyee, not all questions that were asked were responded to, and that follow up questions divided an already small data pool of 50 into smaller and thus less reliable pools, there is some uncertainty in the data. Despite these biases and errors, inherent or otherwise, it is reasonable to assume with the data gathered that payment plans will provide members of the local community with an alternative that is more affordable to them.

There is enough evidence to support that people are aware of what payment plans are, and that people would be willing to use payment plans to purchase the stove. Therefore there is little need to further investigate the viability of payment plans.

 

Next Move: 

Given that the experiment passed the failure hurdle, and that questions pertaining to the orange optimisation stage were worked into our surveying, we will proceed with the payment plan option. As such, future experiments will need to be conducted by the December team to follow up on actioning payment plans. These experiments will involve trialing payment plans, discerning which are the most commonly adopted plans, and obtaining feedback regarding what works and is affordable to customers and what isn’t working and needs to be revised. As the proposed payment plans operate over a number of months, this will require the involvement of many future groups across a continuum.

Another experiment which the December team should focus on is to follow up with the previously obtained EOIs. This will help inform the next team on sales and assist in them finding out if the customers are still interested in payment plans, or whether they would just prefer to pay upfront.

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edited on 24th July 2019, 04:07 by RickM

Lucy Preiss 3 months ago

Status label added: Experiment Results

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