Consulting and support for social enterprise in Canada

Chatbots in social enterprise

August 3, 2021 / jonathanawade / Comments Off

Some estimates state that 80% of all companies will use chatbots to generate leads or build customer loyalty in the next few years. How does this, and how should this, affect social enterprises?

First, what is a chatbot? It is an automated “instant message” discussion that “pops up” on a website or social media platform to engage the potential customer with either a text or voice conversation. The goal of a chatbot is to mimic genuine human interaction through clever writing and the use of artificial intelligence. In some cases sophisticated algorithms combined with user data ensure the outputs are as personalized as possible, only more efficient.

Chatbots typically start with an open question, such as “How can I help you today?” Users who choose to engage will often ask a question that can be answered by one of perhaps hundreds of pre-programmed responses (Chatbots, then become a customer service robot that can access an almost infinite number of responses in a Frequently Asked Questions database). As the “conversation” proceeds, the bot typically will request a prospect/customer’s name and email address and remarkably, statistics show that the majority of site visitors will actually provide that information (which is very hard to get via other customer development tools and activities).

Chatbots are counter intuitive to many marketing professionals, and to social change entrepreneurs. They challenge the notion that personal interaction is one of the most effective ways to generate leads, build loyalty, and engage customers. The thought that artificial intelligence can do this work for social enterprise may feel, somehow…wrong. Duplicitous even.

However, chatbots are tireless workers who never need time off, can respond to thousands of interactions simultaneously, and can create new leads from browsing users, effectively deliver key messages or marketing promotions, and can, in fact, answer the majority of basic questions. Websites are static, whereas chatbots create the illusion of dynamic interaction. If a user wants to find out the store’s opening hours on the long weekend, they can choose to find that information on what might be thousands of pages on the website…or they can simply ask the chatbot and have a response in seconds. However, it is important to recognize that chatbots should not compensate for bad web design, they should augment an easily navigated website.

There are some downsides, of course. Estimates suggest that the programming and technology required to create an effective chatbot can cost $20-$30K. This is a lot for an early stage business, and it may be difficult to justify without concrete proof that it will help bolster sales and the customer relationship. Investing in a chatbot, fundamentally requires a leap of faith, and it can also diminish (or deplete) available funds for other forms of marketing. It is not surprising that the relatively simple-to-use chatbot plugin for Facebook has become common. From the 2016 launch to mid-2018, there were over 300,000 active chatbots on Facebook.

Also, chatbots need to be able to pass the (prospective) customer to a live agent if the customer becomes frustrated, or if they are not getting the information they need. It is often difficult for small businesses to make this transition from bot to human interaction seamless. A bot can book an appointment with a customer representative, but there is often a few hours delay (or more) and this means that the “lead” might grow cold or even find an alternative product online.

So, is a chatbot the right thing for a social enterprise? In truth, chatbots are becoming the norm on many commercial websites, and in the last few years, online users appear to be embracing them as useful tools to help them access information on a company or its products. However, chatbots are most useful only if your customers embrace them and only if they work well. They can be particularly effective for businesses that have high web traffic, and in cases were simple responses are all that is needed in most circumstances. If your business sells a toy that has specifications that are important to share (are they recyclable, for example) that is an easy question to answer. However, if your business is selling facilitation services, then answering a prospective client in person might be a better way to convey your value.

Social Delta has been surprised at the statistics on the effectiveness of chatbots, and therefore advises that they not be dismissed as a tool in the marketing toolbox; however, as with all marketing tools, chatbots should be evaluated by the social entrepreneur by considering their value to the business. They should strategically employ the technology if there is an expectation of benefit (financial or mission impact) that exceeds the cost (money or time or reputation).

However, social entrepreneurs should not presume the tool to be invasive or annoying; somewhat remarkably, the studies show chatbots to be a strong customer cultivation tool in many cases.

Remembering Barb McInnis

July 5, 2021 / jonathanawade / Comments Off

I have just learned that Barbara McInnis, the social justice visionary and advocate we all aspire to be, passed away last Friday in Ottawa. My condolences go to her family and to our whole social change community, which has lost a champion.

Barb–everybody called her by her first name–was friendly to a fault, convincing without being pushy, a diligent and humble citizen, and a woman of conviction and purpose. She was easy to approach, always willing to offer advice, guidance, information and support for any idea that might benefit our community, both locally and beyond. Many of her achievements, including the co-founding of the Ottawa Community Foundation, have been chronicled in her obituary, and in the many tributes to her.

However, it was not only her many achievements that will be her legacy; Barb was a leader without hierarchy. Much is said of the value and aspiration to create egalitarian structures in our society, but she lived this ideal in practice, as a person in a position of power and influence, and yet still accessible, personable, and genuinely interested in the lives of all she met.

Barb, in my mind, had mastered that elusive form of leadership, where people–people like me–felt compelled to follow her because she was one of us, yet she had clarity of purpose. She was magnetic. Her achievements are simply a testament to her magnetism. They are the outcomes, the signposts, of a life well lived, with fairness, firmness and commitment.

May we all aspire to be like Barb, and work tirelessly, and with meaningful human interactions that include people on the journey to social improvement.

I, like so many others, are fortunate to have called Barb our friend and I will miss her influence, her ideas, her support and her bubbly, smiling, personality.

Plastic Bricks. Of course.

February 10, 2021 / jonathanawade / Comments Off

Every once and a while a story crosses our desk that makes us wonder why nobody had done that sooner.

Nzambi Matee is a social entrepreneur in Kenya who is making construction-grade bricks out of plastic that are purportedly 7 times stronger than concrete.

We always hear that plastics take generations to decompose and break down, and yet few of us might have asked ourselves the question: “In what circumstances do we specifically need something that will never deteriorate?”

The answer is blindingly obvious: buildings, walls and walkways.

We celebrate the longevity of Roman roads, medieval castles, the pyramids, Angkor Wat, and the crypts beneath Paris’s streets. We have been (over) building with concrete for decades to create edifices–from dams to skycrapers–that we hope will stand the test of time.

At the same time we are producing plastic waste that is clogging our waterways and burdening our landfills.

Matee is an engineer who has designed a heat and pressure process to combine plastic waste (of various grades) with sand to create strong and colorful building bricks. A sort of lifesize Lego. She designed and built the machines necessary, and since 2017 her company, Gjenge Makers, has repurposed 20 tons of plastic waste. The factory now creates 1500 bricks a day.

The social benefit of Matee’s work goes beyond environmental sustainability. She is also proactively creating employment for women and youth in Nairobi, including jobs for “pickers” who are often facing significant barriers to employment. Click here for more information, and to view a video celebrating this incredible business venture.

Social Delta celebrates the social entrepreneurs like Nzambi Matee who take equal parts dissatisfaction, conviction, ingenuity, skill and savvy to solve a social problem and meet a market need at the same time.

We are inspired. We hope you are too.

The Ottawa Tool Library needs your help

November 30, 2020 / jonathanawade / Comments Off

The Ottawa Tool Library, one of Ottawa’s leading social enterprises, has been evicted from their current location. Their landlord has failed to provide the required notice, and the entire lending library must leave their location at 250 City Centre in Ottawa by December 9, 2020.

On behalf of the Ottawa Tool Library, Social Delta is sharing their press release here.

The tool library is seeking public support to find a new location on the West Side of Ottawa. All lending of tools has now been suspended, but through the generosity of several community partners offering short term workshop space, several previously scheduled workshops will take place in alternate locations in the coming weeks.

The tool library is accepting donations of money to support the emergency move at their website, www.ottawatoollibrary.com , and to help pay for the transport and storage of the 2100 tools in their lending library until a new location can be confirmed. They are unable to accept any tool donations until a new location is found.

This has been a difficult year for many businesses. The Ottawa Tool Library has worked diligently to remain open, operating safely within public health guidelines, and providing tools, advice and support to home do-it-yourselfers, low income residents, and other in the community. This surprise eviction is a significant challenge. They are calling upon the community for help in order to weather the storm and to reopen again in the new year.

Any suggestions of a new location, available secure low cost storage options, or ways to support the continued success of the Ottawa Tool Library should be emailed to the OTL Executive Director, Bettina Vollmerhausen

Good pricing practices for Social Enterprise

November 27, 2020 / jonathanawade / Comments Off

Perhaps one of the most common question social entrepreneurs have is how to set prices for their goods or services.

Pricing is a particular challenge for mission-based social entrepreneurs; in a mission-based social enterprise, the consumer is the beneficiary. For example, the product they sell (whether a good or a service)—such as environmentally friendly paints–is serving the social enterprise’s environmental mission directly. For them, good business means not only maximizing net revenue (using a higher price), but also maximizing the number of rainbarrels sold to mitigate water run-off. (using a lower price)

This can be a real conundrum.

However, pricing is not a guessing game, and need not be feared. Here are six basic principles for the new social entrepreneur to keep in mind when setting prices:

Determine your pricing strategy: Are you trying to attract customers in a crowded market? Are you trying to maximize profits to fund social programs? Are you trying to get rid of excess inventory? Are you trying to maximize sales while covering costs? Each of these goals will inform your pricing strategy. Market penetration might require a loss leader, where your selling price is lower than the competion, but also may be below your cost. Freemium pricing allows you to give excess product away if another product is purchased at regular price. Value-based pricing will set a price based upon a consumers perceived value of your product, and will typically maximize profits, but this often requires strong marketing.
Know your costs. No matter what pricing strategy you employ, you will need to know your unit cost. This is calculated by adding the fixed costs (overhead) to the variable costs (typically input costs of goods sold) and dividing by the volume produced. Generally speaking, prices that are lower than unit costs are unsustainable over time (loss leaders, door crashers, freemiums), prices at unit costs (absorption pricing) will sustainably maximize sales, and pricing above unit costs will endeavor to maximize profit (cost-plus, value, or premium pricing). An entrepreneur will always know and understand the unit cost of their products, and their pricing will invariably orbit around those costs depending on their marketing goals.
Understand your competition. If others are selling something comparable to your product, know their prices, and take time to understand their value proposition. Their packaging, their branding and their public outreach will likely be designed to allow them to increase their prices based upon perceived value. If you know your costs, and you have a strong value proposition to compete with them, you can set your price closer to theirs (or above, see next point) in order to maximize revenue, or closer to cost to maximize market penetration.
Be bold. Trust that your product is as good (or better) as any competor. Design it to be both needed and wanted by consumers. Don’t lower your prices out of humility. (only lower prices if it is jeopardizing your marketing strategy goals)
Be flexible. If you lower your prices to below cost, do so with a limited time horizon. You may need to reduce prices if the market changes. Conversely, if demand is stong, you may want to incrementally nudge your product up to increase net revenues.
Follow proven practices. Be aware of the value paradox, where consumers will not see your product as having any value if the price is too low (or free). Consumers see rock bottom prices as an indicator of poor quality or flawed goods. Try some pricing tricks like bundling (where multiple products are sold together), nudging, or decoy pricing. (read this great article on the decoy effect). There are many proven approaches to pricing and researching which best practices can be applied to your business is time well spent.

A word on sliding scales…many social enterprises express an interest in setting prices based upon the consumer’s ability to pay. They often ask about sliding scales or occasionally “pay-what-you-can” options. Although this approach may be seen as a way to promote equitable access to your product, it is a very difficult way to maintain a business, because input and overhead costs rarely are set on a sliding scale.

However, there are approaches that are more sustainable, while still being inclusive. Tiered pricing (also known as price discrimination) allows for a series of stepped prices based upon proven criteria: tiered prices can be set by age, by income level, by profession (like current preferred pricing for front-line pandemic workers), or by services offered (first class, box seats, etc). Social Delta frequently recommends setting the price, and then offering discounts or bursaries to those who qualify. In this approach, the perceived market value of your product is clearly associated with a specific price (which would cover costs), but your business is willing to sacrifice revenue to ensure that it is responding to the needs of excluded customers.

Setting a price for your product requires a clear understanding of your business goals, a rock solid knowledge of your business costs, and an awareness of your competition. There are no rules to setting the right price, and if there were rules, there would be many exceptions to each rule. However, setting price is not a guess, nor is it magic. Setting prices is 90% diligence and 10% good fortune

Social Delta can help you with determine which pricing strategies and approaches to consider to meet your goals.

Build Back Better

October 27, 2020 / jonathanawade / Comments Off

These are times when starting or expanding a social enterprise is either a fantastic opportunity or an impossible folly.

There are unquestionably many challenges facing people and communities locally, nationally and globally as a result of the COVID-19 pandemic. At the same time, and perhaps not entirely by coincidence, we see cracks and fissures appear in the social fabric: polarized and angry democracies, growing income disparities, wildly unsustainable consumerism, incredibly potent and punishing environmental changes, more xenophobia and irrational fear of “others,” increasing intolerance and racism, and a sincere lack of resources as our economies are (and have been) shown to be fragile constructs.

If social action is borne of injustice and and fomenting of the desire for positive change, then surely we must look at new ways of creating a just and sustainable society. Social enterprise is potential tool to make that happen, although starting any sort of business in a pandemic is risky; fantastic or folly, indeed.

I have many thoughts on how we can redesign business and movements and individual actions and responsibilities. However, I believe that my colleague and friend Vinod Rajesekaran, of Future of Good, expressed it brilliantly in his recent article “Stop idolizing your sector and demonizing another.” I quote from him directly:

Let’s build back better by asking different questions. When an organization or a project inspires you, don’t ask about their legal structure. Instead, look deeper and ask about their values, intentions, and actions. Look at the ratio between the highest and lowest paid workers, look at their carbon footprint, look at how diverse their leadership teams and boards are, look at how they act on reconciliation everyday, look at how well they include and give voice to their stakeholders, and follow the money — look at where they save and what they invest their money in.

One of the first questions I get from aspiring social entrepreneurs is about how (and when) they should incorporate. I always tell them “form follows function” and that they should wait as long as possible before they formalize their social purpose in an organizational structure. Only once they’ve identified and lived by their values, intentions and actions (ie determined their function) will they know the best structure to support their work. In fact, once they’ve started their work in earnest, the form of their business is almost always determined for them.

We are, regrettably, stuck with largely antiquated legislation that enshrines for profit, co-operative, or non-profit structures, myths, and expections. However, we can–and must–push the parameters of each of these structures to create businesses that measurably improve social conditions, justice, fairness and protection of the environment.

In the coming years, we can, person by person, build back better.

social delta