Entrepreneurship Venture: Trove
We’ve successfully launched a lander and continue to add retailers to our list of partners. We look forward to launching an MVP soon.
For retailers we continued to test the hypothesis that we would be able to acquire 2 out of every 5 retailers we interviewed. We continued surveying restaurants and coffee shops near campus by speaking in person with 7 establishments. We were able to acquire 1 restaurant as a partner, which is in addition to the 1 partner we had from last week. Additionally, we were able to gain 3 guaranteed partners through a contact in Penn Student Agencies, bringing our total retail partners up to 5. We think we were able to gain these partners because we made the shift towards smaller stores, rather than big chains.
Though this results in an acquisition rate of 29%, which is less than 40%, we are hoping to bring up the number by following up with retailers who referred us to higher up managers. Based on the positive reception from Penn Student Agencies from the brief pitch we gave of our idea, we are confident managers from restaurants that have already expressed interest would want to become partners.
We did reach out to one non-restaurant / non-coffee shop this week — we interviewed the manager of a barber shop. Our rationale was that barber shops try hard for their customers to return, and we assumed they’d want to be involved with a loyalty program. However, the manager rejected our idea because “he was not a technology person at all.” We learned that for now, restaurants and coffee shops may be the best places to go as they already have a technology backbone by having profiles on yelp and enabling check-ins via Facebook. Places that do not have a technology presence may not be receptive to our loyalty app. Moving forward, we will only be interviewing retailers that have an established online presence so that they will be more willing to try our app.
We’ve also began considering a monetization strategy by looking at the competitive landscape of the loyalty app industry. Based on preliminary analysis we’ve reached a price point of $75 per month per retail location. Thus, our profit formula is as follows:
Retailers * $75 Monthly Fee = $Total Revenue
We were able to achieve an opt-in rate of roughly 40% of those we surveyed. Our next hypothesis which will help to address our demand assumption is that we will able to generate a 2% conversion rate on our landing page, a sample is provided below
In order to perform a more realistic demand test we’ve set up a landing page which we will use to “convert” our visitors. We will measure a conversion each time someone clicks the “download” button on our site. However, since we do not yet have a functioning MVP we will direct them to a form from which they can sign up to receive updates about our product’s development. We will drive traffic to our lander by advertising via “dot stickers” with our website and logo at the Bridge Cafe (example below).
The manager of Bridge Cafe informed us that each day they serve 900 coffees so within the next five days we should be able to garner 1,000 impressions for roughly $60 (the cost of the stickers) which brings our CPI (cost per impression) to ~$0.06.