Parsing all of this information, the researchers found that when the average wait time for technical support to Ugandan households in the test area increased, the subsequent adoption rate in the area was significantly impacted. Delaying the average customer service wait time at a branch by just 24 hours saw adoption drop by around 1%. When customer service suffered a delay of more than a week, adoption plummeted by up to 32.4%. Impact on adoption rate was greatest when existing customers had service cases that were long pending, due to waiting for repair at the workshop.
“What we observed here was a direct link between delays in getting technicians out to homes to resolve problems and purchasing decision-making by first-time adopters,” says Dr Kundu. “In other words, the timeliness or quality of post-sales care as experienced or perceived by existing customers was either encouraging or discouraging new customers from purchasing the product – most likely because of word-of-mouth feedback in the community.”
To test the power of the word-of-mouth effect, the researchers surveyed around 1,000 of the company’s existing customers, asking them how likely they would be to refer the solar home system to other families. Again, they found a strong, direct correlation between the willingness to recommend the product – and the number of customers acquired through referrals – and the referring customer’s service wait time; despite the fact that households could claim cash for referrals.
“In the last six months of our study our partner company started a formal referral programme. Every month existing customers were gifted USh30,000 (£7.00) for each customer acquired through their referral,” says Professor Ramdas. Nonetheless, for each additional day of waiting for technical support, the study found a concomitant drop off in referrals of more than 5%.
The findings should provide food for thought for technology firms and investors looking to implement effective customer-acquisition strategies and increase technology adoption in emerging markets, says Dr Kundu. For companies offering tech-based solutions in these regions, a key area of resource allocation should be increasing capacity in workshops and repair centres to reduce operational backlogs that lead to long wait times.
Implications for policy-makers
“Another important aspect of our study is that we provide direct evidence on the role of word of mouth in customer acquisition,” Dr Kundu points out. “To reduce negative word of mouth resulting from long wait times, therefore, solar providers and others really need to look at fortifying their service teams or even partnering with value-chain specialists that can bridge the gaps in repair work and customer care post-sale.”
The researchers also suggest that policy-makers take note of the findings and think about ways to incentivise companies to invest in after-sale services as they make efforts to improve infrastructure – especially roads – to provide better access for rural communities in emerging markets.
Capitalising on the promise of new technologies to improve the lot of millions of lives around the world could be accelerated by these measures. Professor Ramdas says, “Around 14% of the world’s population does not have access to electricity. Ninety-five percent of this unserved population lives in sub-Saharan Africa and Asia. So, reduced adoption of solar technology due to long service wait times has a direct cost on the socioeconomic development of these communities.”