Behind a Great Toilet Business, a Great Woman
Beyond the profit motive
Since 1983, Lay Hengheng has owned and managed a construction material company on the main road in Prey Chhor district, Kampong Cham province. Over this time, she has seen it grow from a small road-side shop to one of the biggest wholesale and retail construction companies in the district. In addition to raw materials like sand, rock and cement, Heng estimates she was able to sell about 30 toilets per month to customers who came directly to her shop, but toilets were never part of her core business.
In January 2011, some WASH-M project staff came to visit Heng to see if she would be interested in retail sales of a new low-cost toilet product. It took only a couple of days for her to consider and agree to get involved in the project. Heng insists that the profit motive was not the main driver for her. ‘My first priority is to help people. But also the profit, even though the profit is not very big. I don’t want to see people run to the rice field and use the rice field there.’
Reaching a new market segment
Driven by a kind of ‘corporate social responsibility’, Heng agreed to drop the price for one shelter-less toilet ‘set’ from her previous price of USD 65 (without transport or bricks for the toilet chamber), to around 40 USD, including transport and a pre-cast concrete ‘chamber box’. The introduction of the new pre-cast chamber box would allow customers to install the latrine set by themselves, without the need for additional brick and masonry work. The lower cost and home delivery would target a busier and lower-income market segment. Heng knew that no other business in the area would be able to compete on price, and no one else offered the home delivery service.
In her first few months, Heng has more than doubled her toilet sales to nearly 60 toilets per month. She started out with 4 ring molds, but has now invested in an additional 8 ring molds and 4 new ‘chamber box’ molds. To keep up with the growing demand, she has brought on an additional 4 staff as laborers and delivery drivers, and added two more moto-romocks (a motorbike with a small carriage) for toilet deliveries. With her investments in production and transport capacity, Heng can now produce 10 latrine sets per day and deliver up to 15 sets per day. She estimates that total revenue from latrine sales has increased from 10% to about 20% of her overall business since she began selling the new low-cost product.
The power of direct sales
This is Heng’s first experience with using sales agents to promote her products: In the past, she waited for customers to come to her. Heng believes that the new sales techniques are really helping. She currently has 7 sales agents working across 7 communes. Reflecting on this new style of promotions, she says, ‘It is a good idea. They know me more, especially in the far away villages and communes.’ While paying a commission on sales decreases her profit per latrine, the sales agents have helped her dramatically increase her sales volume.
In addition to the sales agent training provided by the WASH-M team, Heng has devised her own sales strategies for her agents. For instance, when she first began selling the new product through her agents, she offered consumer credit for a ‘promotional period’ to help get the word out. ‘The first month, we thought that we just started…we just let them buy on credit to show our product. Also to let them know that [the WASH-M project] has arrived in their village.’ Heng still offers some extended credit, but only to about 10% of her customers. The rest pay on delivery or within one or 2 weeks of delivery.
The sales agents also help her other business lines by ‘upselling’, or offering other products and services bundled together with the toilet. Heng estimates that about 10% of customers purchasing a toilet set will also buy other materials like rock, sand and cement for their toilet structure when they make their purchase.
Doing good deeds
Heng acknowledges that working with the WASH-M project has increased her business network and her relationships with local government. She feels that toilet sales have helped to elevate her status and image as a good citizen and community member, and this links to Cambodia’s Buddhist faith and culture: ‘People know me more. It is contributing to promote people’s hygiene and sanitation. In Cambodia, we say it is a ‘good deed’.
Heng says that if the WASH-M project leaves the area, she will continue to work with her sales agent and invest in making copies of the toilet brochure for distribution. As long as there is demand, she will continue to supply. While she has no plans yet to expand into other communes, Heng says that she would be interested in adding new products, like water filters, to her product line.
For a large-scale business like Heng’s, it is not likely that toilet sales will be a major part of her ‘core business’. But with her capacity to reach a wide sales area with good quality products delivered on time, and her willingness to invest her own time and resources, Heng is one of the best and most efficient enterprises engaged with the WASH-M project. Keep watching to see how Heng’s toilet business evolves…