Project Everest

Adopted Experiment

[Proposed Experiment]: Revenue Streams - Safety Nets - Fuel I Timor-Leste December 2019

Lean phase: 
Revenue streams

Assumption: 
Customers will be less likely to default where there is an incentive involved, in this case the extension of the warranty on the stove. 

Time box: 
Estimated time box until the end of February (2 months - 3 months dependent on plans sold)

As 7 plans were sold in Dec without warranty rough estimate 7-10 will be sold in Jan with warranty making the total sales to be compared approx. 14-17

Key metrics:
% of people defaulting with use of warranty 

Compared to 

% of people defaulting without warranty (previous months)
 

Success points: 
Green light, proceed
Proceed with the warranties on all credit plans

Success point
20% of sales with warranty default, compared to 40% of sales without warranty default 

Orange light, optimise
Proceed with warranty experiment further however re-evaluate strategy or terms of warranty  

Failure point
60% of sales with warranty default compared to 60% of sales without warranty default  

Red light failure
If 80% or over of all sales with warranties sold default, re-evaluate if warranties are a viable system, do they need to be less lenient. Explore other avenues. 

 

Experiment build:
1. Review credit plan sales from December without warranty.

2. Develop a warranty system to be implemented upon the first payment of the stove -    example (green plan = 5 year warranty up front, yellow plan = 2 year warranty first payment and 5 year warranty 2nd payment, and blue plan = 1 year warranty first payment 3 year warranty second payment and 5 year warranty final payment) Options for warranties and further information linked in document below decide from these for initial plans** 

3. Review contracts and add warranty information. Translate the contracts through university interns and print. 

4. Approach EOIs with the contracts and stoves and attempt to make sales, using the sales script. Team to decide what EOIs/Sales will be warranty ones, this will include deciding on the sample size for the success metrics and therefore will affect the time box. suggest using a number that is easily divided into a percentage to make the success metrics easier to deliberate. 

5. At the end of February, review default rates in comparison with previous months sales (without warranty). An effective warranty can be defined as being successful in mitigating the risk of default for all months of payment. 

6. Evaluate results of experiment and adjust system for minimising default risk accordingly. Refer to provided document from December. 

edited on 20th December 2019, 01:12 by Kate McKellar-Stewart

Lily Partridge 2 months ago

Status label added: Proposed Experiment

Reply 0

Lily Partridge 2 months ago

How many people are you expecting to test with throughout this time box period? Given the success of this month and following up for next month, can you give a rough estimate?

Please check your failure rates, you're quoting two different metrics here - which one will be your failure point?

Can you please elaborate in your experiment build with what you imagine to be an effective warranty and at what point in the payment plan this could be implemented? Alternatively if you have this as a doc you can attach it instead. You will also need to elaborate on what you mean by 'safety net' in this context.

Last thing is how will you decide which EOIs/sales will be warranty ones and which ones won't be? If this is something you've already considered, please include it, and if not perhaps add some suggestions on thoughts to develop it out.

Reply 1

Lily Partridge 2 months ago

Status label added: Adopted Experiment

Reply 0

Lily Partridge 2 months ago

Status label removed: Proposed Experiment

Reply 0