Last Mile Learning: How local assistance and trust motivate last-mile customers
MIT CITE research finds that Solar Sister’s model built on social networks and women entrepreneurs is reaching last-mile consumers. Research also shows that last-mile consumers place considerable importance on local after-sales services and purchasing from people they know and trust when it comes to solar energy.
Everyone should have access to power — no matter how remote your home or how small your income. But a critical obstacle to universal energy access is bridging the gap between product manufacturing and distribution to the last-mile. Solar Sister and others in the sector were created to tackle this exact challenge: to maximize impact by deliberately targeting last-mile communities. According to Sustainable Energy For All, “under-served ‘last-mile’ populations removed from electric grids can benefit most from off-grid solar and other decentralized offerings, which can be installed more quickly and at less cost than traditional electric grid approaches.” This prompts key questions: what do we mean by “last-mile?” And how do purchasing preferences and demands change when servicing last-mile customers with modern energy solutions?
In 2017, with the support of the US State Department’s wPOWER program, Solar Sister partnered with MIT’s Comprehensive Initiative on Technology Evaluation to study last-mile customer preferences and evaluate the reach of Solar Sister’s women-centered distribution chain. MIT conducted over 600 interviews in Tanzania with both Solar Sister customers and non-customers, resulting in the report, “Reaching the Last-Mile: Women’s Social and Sustainable Energy Entrepreneurship.”
Read on to learn more about the core findings. And find the full report and summary here.
Defining and Mapping Last Mile
The study created a customized framework to evaluate the “last-mileness” of interviewees. MIT combined poverty level, grid access and remoteness to form a Last Mile Index (LMI). Defining a methodology to evaluate last-mileness is critical to ensuring that energy sector players are reaching the consumer segments they aim to reach, maximizing impact and ensuring that models are not leaving anyone behind.
Based on interviews with Solar Sister customers in Tanzania researchers mapped LMI scores as visualized in the graph below. The data shows that customers reached by Solar Sister are more last-mile than not (values closer to 1 indicate more last-mile). The study also asked customers about access to other energy companies or sources of solar light and found that “Solar Sister women entrepreneurs are penetrating into last-mile markets and communities that have few alternatives for reliable and affordable clean lighting products.”
“Solar Sister women entrepreneurs are penetrating into last-mile markets and communities that have few alternatives for reliable and affordable clean lighting products.”
Last-mile is all about local service and trust
MIT also took a creative approach to mapping out the consumer preferences of last-mile customers. They interviewed 350 non-Solar Sister customers to ascertain what motivates people to purchase solar, looking at local assistance, trust/familiarity, payment structures and a salesperson’s gender. Those interviewed were provided with visual representations of these preferences and asked to choose between hypothetical profiles with randomly varying characteristics.
“Rural customers appear to place considerable importance on the social aspects of a purchase, such as whether local after-sales service is available and whether a salesperson is someone familiar and trusted. This preference far exceeded even the financial consideration of paying for a product in installments, validating Solar Sister’s approach to champion locally-embedded entrepreneurs.”
The results of the survey show that local assistance and trust/familiarity were given more importance than payment structures and gender. This is interesting as there is a low value given to the gender of a salesperson but high value given to the characteristics Solar Sister sees as typically associated with female sellers — local presence and high trust networks.
Evidence for last-mile models
Last-mile distribution is critical to reducing poverty and ensuring everyone has access to clean power. This study presents both a methodology for fellow practitioners to better evaluate the last-mile reach of current energy approaches and also empirical evidence on the relationship between gender and clean energy promotion in developing contexts. By better understanding where the gaps are and how to fill them, the energy sector can hold ourselves accountable and ensure that we are truly reaching the base of the market pyramid and those that need energy solutions the most.
Last Mile Learning is a monthly blog series by Grants and Impact Manager, Abby Mackey. The series shares Solar Sister’s experiences, data and learning from our work with women-run renewable energy businesses in Nigeria, Tanzania and Uganda.
