It is not a secret anymore that BoP consumers are willing to pay for affordable, accessible, and aspirational products and services. Social enterprises globally, and particularly in India have substantiated this time and again through scalable models across multiple sectors like nutrition, energy, financial services, drinking water, etc.

Still, when it comes to community and public toilets many market-based solutions fail. This is in spite of the fact that more than 25% of the population in India continue to defecate in the open and there is a large market waiting to be tapped.

A 2019 Report by STeP outlines three fundamental causal factors – absence of accountability between service providers and users, insufficient planning for long term service provision, and lack of financial sustainability. When we draw inspiration from successful social enterprises and synthesise them with the fundamental causal factors above, the insights can be distilled into three key success factors to design a sustainable Shared Toilet Business Model for the BoP consumers in India.

01 Identify the Right Value Proposition

BoP consumers specifically in India are a dynamic subset of the population with widely distinct behaviour, purchasing power, and socio-cultural norms. Hence, a one-size-fits all approach in providing a market-based shared toilet solution does not work. The success mantra here is to conduct an in-depth needs assessment of the targeted micro-market through field research, co-creative sessions with the intended user group, and testing the model before scaling up. This uncovers key inputs to design a sustainable business model like – unique needs, price sensitiveness, and desired expectations. Additionally, the needs assessment also helps to design value propositions for customers beyond toilet users, e.g. advertisers, faecal sludge buyers etc.

For example, since its inception in 2016 CAYA Constructs have integrated identifying the right value proposition as a part of their business model. To execute this, CAYA’s community engagement teams hold regular discussions with the community members throughout the entire process of design to implementation. Their toilets are customized and designed according to the needs and budgets of customers. The designs are aspirational and appropriate for all climates, settings including slums, and mass use. They are well-ventilated to remain comfortable during extreme heat, compact yet spacious, and easy to clean. Today, CAYA has reached out to 2 million people, installing 20,000+ toilets across 200+ cities.

02 Engage Customers by Building Strong Relationships

Building a functional, affordable toilet does not guarantee usage. For instance, in a slum colony in Delhi’s Bawana, residents continue to defecate in the near canals that carry water from Haryana to a treatment plant. Locals complained of a lack of adequate community toilets for the population and the unusable state of the existing ones. Some said they could not afford usage charge of INR 5 for men and INR 2 for women. Hence, to drive usage sustainably successful organizations in this sector take up innovative customer engagement interventions – ranging from training, awareness and education through community-based teams to behaviour change campaigns, and value-added services beyond sanitation.

One such innovative customer engagement model is led by Samagra, the first for-profit sanitation social enterprise dedicated solely for community toilet facilities for the urban slum-dwelling consumers. Samagra’s model aims to create behaviour change at 2 levels: a) Converting non-users to non-paying users & b) Converting non-payers to payers. To implement this, Samagra allows all community members to use Samagra operated toilet blocks free of cost, but only those who pay get access to their LooRewards programs that provides value added services as digital goods, bill payments, banking, health and e-commerce services etc. To convert non-users to users, Samagra transforms ULB operated underserved community toilets into well-designed, clean and hygienic toilet blocks motivating non-users to start using the toilets. To convert non-payers to payers, Samagra uses their loyalty programme LooRewards – changing the social norm to Community Toilets as a paid Public Utility. The delivery of all value added services under LooRewards are led by community based women called “Loopreneurs” – which enable building strong relationships with the customers. As a result, it led to 10,000+ daily users with 600% increase in users paying for toilets.

03 Rationalize Cost Structures and Diversify Revenue Streams

Many shared toilet business model initiatives have failed not able to strike the right profit equation. This was because either they have not been able to rationalize the cost structures or expand revenue streams beyond the pay per use model.

There are 04 ways by which organizations have been able to make their shared toilet business model commercially feasible

• Reduce CAPEX by low-cost manufacturing and installation: Successful social enterprises have explored innovative ways to implement affordable yet durable solutions to bring down the capital expenditure required to build toilets. For example, 3S Saraplast has developed a portable modular toilet that can be easily installed, dismantled, and moved to a different location. This brought down the manufacturing and installation costs and rationalized the cost structures.

• Diversify Revenue to cover Operations and Maintenance: Operational expenditures like routine services, cleaning, breakdowns can be covered through diversified revenue streams. For example, GARV toilets has come up with WASH hubs offering a suite of complementary solutions like laundry, shower, water ATMs etc. covering their OPEX. Additionally, they also over real estate to advertisers which forms another source of revenue beyond pay per use.

• Explore business models beyond BoP to support low cost solutions: Social enterprises like 3S Saraplast have toilet leasing models targeted towards Government or Large Private Sector firms as a high margin revenue stream. This helps them cross-subsidize sanitation solutions for low income consumers. Similarly, Eram Scientific’s export revenues from e-toilets help them support the solutions targeted towards BoP segments. Additionally, franchise model is also gradually picking up. For example, GARV Toilets is testing local franchise models where local entrepreneurs operate the WaSH Hubs and revenue sharing is done in partnership.

• Integrate Faecal Sludge Management to expand beyond core Sanitation Value Chain: Faecal Sludge Management initiatives by the Government at central and state levels in India has prompted many social enterprises to integrate FSM a business proposition. For instance, Eram Scientific is experimenting with partners to create an integrated eToilet with an embedded FSM system. The closed loop system will enable resources such as water to be captured and reused and waste to be treated onsite.