Rwanda | May – October 2024 | Case Study
The Opportunity
Revolutionizing Power Supply Ownership
The Battery-as-a-Service (BaaS) industry is revolutionizing the way we own and maintain electric vehicle (EV) batteries. This novel approach is gaining traction, particularly in industrial and telecom sectors, addressing challenges related to power supplies, cost efficiency, and charging infrastructure. The BaaS market is projected to grow from USD 1.37 billion in 2023 to USD 5.30 billion by 2030, a Compound Annual Growth Rate (CAGR) of 21.4%. This significant growth potential could reduce energy prices by 20-30%, making supply more affordable, especially in urban areas where on-grid power supply and price stability may be challenging.
Despite the promising growth, many companies struggle to scale their offerings in this rapidly expanding market. They grapple with identifying and conceptualizing pricing strategies that are neither too generic nor too detailed to manage. The lack of price transparency and varying definitions of a fair price further complicate the process.
Our client, a manufacturer of battery packs, recognized the need for a more sophisticated approach to access different market segments. While their product offered power backup and cost savings through peak shaving and load-shifting applications, their approach on pricing was unstructured, causing income casualties. They sought to ensure the affordability and accessibility of their battery solutions without compromising on the quality of their products.
The Solution
A Comprehensive Pricing Strategy
Over four months, we at Stepchange Africa collaborated with our client to refine their financial structure and develop a comprehensive pricing strategy. This included evaluating costs and revenue streams, pricing decisions-, objectives- and policies made, such as reviewing their value proposition and reflecting if the current pricing strategy captures the benefits offered to existing and prospective customers, and how they translate into value that can be monetized through pricing.
The work centered on establishing our client as a service provider, that brings along not only sophisticated technological capabilities from its product, but also a financial pricing framework, allowing them to focus on scaling their business, without having to reinvent the pricing wheel for every single client engagement.
Priorities to get there included coming up with an approach, to understanding our clients’ initial standing, identifying market developments, and conceptualizing pricing standards, and vetting those attributes that drive value to customers and that will affect their price-sensitivity, and finally navigating the shifting landscape of risks that drive client acquisition and retention.
The Impact
Accelerating Product Time-to-Market via Streamlined Pricing
Together with Stepchange Africa, our client accelerated their product time-to-market and improved customer acquisition and retention, to fully leverage its product and service value. In addition to managing the specifics of the client’s value proposition, Stepchange Africa outlined an actionable approach to refine the pricing strategy, and provided new insights to the company’s financial health, identifying not only potential risks and opportunities, but also informed strategic decision-making, to increase profitability and investor attractiveness, via focused revenue streams, cost-out programs, and forecasted figures that undermine the client’s growth ambitions.
The BaaS industry presents significant opportunities for growth and innovation. With a refined pricing strategy and a clear understanding of their value proposition, our client is well positioned to capitalize on these opportunities and drive their business forward. We at Stepchange Africa look forward to supporting their continued success in this exciting industry.
