Getting poor customers to bundle themselves

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The McKinsey Quarterly's recent article, A Grassroots Approach to Emerging-Market Customers, introduced me to the Manila Water story. This public-private partnership has taken the brave, and often necessary, step in serving low-income consumers: changing their existing business model. From the article (free registration required):

In the Philippines, Manila Water relies on collective billing to ensure the timely payment of bills, employs small-scale entrepreneurs as couriers and pipeline contractors, supports microlending, and brings affordable water to schools and hospitals....

Manila Water devised a game-changing scheme: letting communities themselves decide if they want individual or collective installation, metering, and billing. The company offers three options: one meter per household, one meter for 3 or 4 households, and a bulk meter for 40 to 50 households. Where households band together, the connection fee (ordinarily 7,000 pesos a household) can fall by as much as 60 percent.

The McKinsey piece also describes Globe Telecom, Cemex's Patrimonio Hoy program, and Hindustan Lever's Shakti. A couple of other blogosphere reactions to the piece here and here.

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