Title: Theory of Change
1Theory of Change
Get Grounded
Social Enterprise Design
2Is the idea a concept?
Social Enterprise
3Understand Nature of social problem
Needs/limitations of clients
4Where to begin
- Clarify your business and its goals
- Build scenarios
- Play it out your idea
- Identify deal breakers
- What will make or break your business
- Money, laws, partners, etc.
- Identify key design influencers
- Competitors, industry dynamics, regulatory
environment, demand, required resources - Reality Test
- Objective feedback
- Quick Market Test
- Benchmarks
5Pare it down
- Scope
- For most SEs scope is a practical issue of
- Location (other resources) haves have nots
- Time
- Strategy
- Low hanging fruit
- Window of opportunity
- Proof of concept/display
- Inflection point for impact
- Assumptions
- Informs market research
6Social EnterpriseBusiness Concept Discussion
7Best way to learn about markets?
- Start selling
- Test market
- Pilots
8Marketing Videos
9What is a Value Proposition?
- Identifies
- target market
- opportunity
- Explains
- cost and benefits
- how that combination is superior to other choices
- A value proposition is NOT
- a mission statement
- an elevator pitch
- A sales pitch Unique Selling Proposition
10Creating your Value Proposition
- For List target customers or beneficiaries.
Group them and ultimately define THE customer or
beneficiary. - Who Define the need or opportunity. What is
critical issue? - The Name your product, service or concept. Place
the product, service, or concept into a generally
understood category - That Quantify the benefits of the product,
service, or concept. Identify the single most
compelling benefit -
- Unlike List the competitors and competitive
alternatives - Our Differentiate the product, service, or
concept. Set it apart from the competition.
Asserts the VALUE of the offering
POSITIONS the value
11Example IDE India
For List target customers or beneficiaries. Who
Define the need or opportunity, i.e. what
critical issue for customer or beneficiary? The
Name the product or service or concept and place
the product, service, or concept into a generally
understood category. That Quantify the
benefits of the product, service, or concept.
Identify the single most compelling benefit
Unlike List the competitors and competitive
alternatives Our The primary differentiation of
the product, service, or concept.
- For small scale rural farmers using surface
irrigation - Who lose over 50 of usable water to surface
runoff annually - The IDE-India low-cost drip irrigation system
is an advanced irrigation device - That inexpensively and completely eliminates
water loss from surface irrigation - Unlike currently used, expensive and
- large-scale drip systems
- Our product is a customized, modular and
scalable system that consistently reduces water
loss and increases farmers yields
12Marketing Mix in SE Context
- Availability - Product
- Product/service does not exist
- Collateral free micro-loans
- Eyes on Four Paws
- Affordability Price
- Product/service exists but is too expensive
- moneylenders (interest can be 200 of loan)
- Aravind
13Marketing Mix in SE Context
- Access Distribution
- Product/service exists but customers do not have
access - Banks and formal financial markets
- NOTE access to markets or undeveloped markets
often major barrier for SE clients. - Vision Spring
- AWARENESS - Promotion
- Product/service exists but customers do not know
that it exists - Information on meetings in markets
- Kickstart
14SE Marketing Considerations
- Educational marketing
- Market development
- Undeveloped/fragmented markets, poor market
infrastructure - Barriers to reaching clients through traditional
marketing vehicles - Literacy, language, social physical isolation,
fear and distrust, etc.
15More
- Communications /PR efforts to educate SE
stakeholders - Community, donors, public, etc.
- Demand Imbalance
- Wants/inability to pay
- High costs
- Marketing cost/demand imbalance major reason for
private sector market failure - Cultural context
16Whats in a name?
17Your marketing message is not your mission
- Why will a customer buy your product or service
more than once?
18Baking with a difference
- All-natural bakery products from scratch. We
mix small batches of fresh, premium ingredients
and finish each product by hand to create
irresistible desserts. - Rubicon stands for more than fabulous desserts
we are part of a nonprofit organization, Rubicon
Programs, that helps individuals in the San
Francisco Bay Area overcome economic and social
hurdles. Rubicon provides training, housing,
employment and support services to people in
need. You can feel good about buying Rubicon
products because you in turn support your
community.
19Customers buy Benefits
TOLPA PB
Microfinance
Features Benefits Features Benefits
High in protein Good nutrition Working capital loans Vehicle to grow business
Slightly sweet flavor Kids love it easy for parents Weekly repayment Easy to pay back
100 natural Peace of mind Collateral free Access
Expiration date Guaranteed Freshness Solidarity groups Peer support
Plastic container Convenient reusable Short loan cycles Lower risk
Produced by low income Haitians Feels good make a difference Easy application Low stress
201 Marketing Vehicle
How to incite?
21Most common price strategy challenge for a social
enterprise?
Third party payer Payment plans
22Watch out for subsidies in price!
- Volunteer time
- ED time on SE
- Wage premium
- Wastage
- Lower employee productivity
- Time spent on employee personal problems/social
programs - Higher insurance rates
- Supervisory staff (i.e. job coaches)
- turn over
- Time for SE fundraising
23SE Distribution
- Distribution strategy is often a key for social
enterprises that serve clients with barriers to
ACCESS - Markets, Jobs, Information, public services
health, education, water, utility etc.
24Distribution - Eyeglasses
Method/market Rural poor Urban poor Factory Workers Chemist Partner NGOs
Mobile vans X X
Vision Guardians X X
Micro-entrepreneurs X X
Chemists X
Direct Sales Franchise partners X X X X X
25Distribution Channels
VE Channel
Wholesale Channel
Franchise Partner Channel
26SE Marketing Pitfalls
- Confuse marketing message and mission
- Confuse need and demand
- Assume customer loyalty can be built on social
good instead of quality - Build it and they will come failure to market
- Lack capacity/acumen - inability to deliver on
basics - Failure to listen to customers/watch the market
incorporate feedback - Inappropriate marketing vehicles for reaching
customers - Confuse payer user / clients customers
27SE Marketing Practice
- Creative/unconventional and traditional
marketing approaches - Take business to clients emphasis on
distribution - Price and payment of services based on clients
abilities to pay or third party payer - Quality, Consistency, Reliability are king
- Brand
- Market penetration is key - Test market new
products - Accurate price
- Flexibility and responsiveness
- Social benefit
- Mission leverage