Homie’s Pay-Per-Use model: washing less and at lower temperatures
June 4, 2021
– By Nancy Bocken, Co-Founder of Homie and Professor in Sustainable Business Models
HOMIE’s business model is a ‘pay per use’ business model, where customers are also charged less for the most sustainable option (e.g., a low temperature wash). Pay per use means that customers pay for the access and use of a washing machine or other home appliance but not for the machine itself. The idea is that you have access to a quality, durable appliance and any service that comes with it. The pay per use business model can be more flexible, affordable and sustainable than alternatives such as buying a new washing machine. In this blog we specifically focus on the evidence we found on ‘sustainability’.
In 2018, HOMIE was part of an in-depth study asking whether people’s behavior becomes more sustainable after becoming a HOMIE customer. The focus was specifically on laundry behavior. The quick answer to this question was: Yes, HOMIE customers are more sustainable: they wash less and at lower temperatures!
So, what did we study and how? We interviewed new customers about how often they typically do the laundry: at which temperatures and how often. We offered them a free month of washing when becoming a HOMIE customer. After this free month, these customers would start paying per use as normal customers. We measured what happened with the laundry temperatures and number of washes per month.
And the results were as follows. We saw the average number of laundry cycles dropped after introducing ‘pay per use’ from about 15 for the free month to 12 a month for the paid one and remained stable at about 12 washes a month over time – a reduction of 20%! So, of course people have a minimum number of laundry-cycles a month to keep things clean, but through HOMIE they become more conscious about filling up the machine and perhaps doing a ‘sniff test’ to see whether something needs a thorough wash or just some airing.
The average washing temperature also dropped from 40.2°C to 38.1°C. As more and more laundry brands are effective at low temperatures and in some countries like Australia washing at cold temperatures is the default, HOMIE’s model helped people further in the right direction. The group who previously washed at the highest temperatures lowered their laundry temperature the most (from 46.2°C to 40.4°C). On average the HOMIE customer also washes at lower temperatures than the European customer. Colder washes also help make your clothes and colors last longer.
All in all, the pay per use model seems to pay off for the customer and environment – helping to save money, energy and making clothes last longer!