Testing…testing.
Before we begin, I’m going to be taking about Leaps & Grounds, the new social enterprise employability service we have been developing with and for refugee women in the UK. If you’re unfamiliar with this and curious about how we got to this point, check out these previous posts:
1. Introducing the Refugee Social Enterprise project (Sarah Bargiela)
2. Wrapping up discovery (Lucas Farthing)
3. Ideation Sessions (Lucas Farthing)
4. Supporting people into work through innovate social enterprise models (Alice Bardrick)
5. Validation bingo: testing big ideas bit by bit (Brid Brosnan)
As this series of blogs makes clear, there was a period of discovery, ideation, and testing and learning that took place before we began the Leaps & Grounds coffee cart pilot nine weeks ago. Every step taken by the team during this process, every assumption tested, and iteration made, was to ensure confidence in the model before we invested time and resources in launching a public pilot. Through this process, every piece of the puzzle that could be unpacked and explored behind closed doors had been. We were confident that this social enterprise was designed to meet an important and unmet need. Further we were confident that the offer was in line with consumer preferences. At this point, that there was nothing left to test that didn’t require taking the step outside and launching a full pilot.
Even with this confidence, we naturally limited risk in the pilot. Key to this was starting with our minimum viable product: we began by renting a coffee cart, not a brick and mortar store, and designed a simple but sufficient menu. We didn’t need to take something perfect and fully formed into the market, we needed to launch something simple, accessible and manageable, and go from there. The test and learn principle was not confined to the pre-pilot stage but shaped our approach throughout the pilot as well. Throughout this blog I will elaborate on this, and set out our approach to piloting: what we sought to learn, how we measured this, and the rationale for extending our pilot for an additional five weeks.
Pilot one, stage one.
In stage one of the pilot, our initial four weeks, we sought to test a number of assumptions to increase our confidence that the social enterprise was a. feasible and b. impactful in practice. Think of assumptions like hypotheses. Below are some examples of the assumptions that we needed to explore in the first Leaps & Grounds pilot:
a- We can produce a consistently tasty cup of whatever’s ordered.
a- We can find supportive and proactive suppliers.
a- We can sustain volunteer attendance.
b- The trainee barista’s grow in confidence and find the work experience empowering.
b- The trainee barista’s feel safe working on the coffee cart and supported in their employment.
b- The trainee baristas gain valuable skills and benefit from working with the barista volunteers.
On the 27th of September we released our first espressos into the wild and we have spent every moment since learning and reflecting. Throughout we have been paying close attention to the experience of the three key audiences we are engaging in this service: trainee baristas/ service users; volunteers; customers. Relevant to the final group, I’ll elaborate on one example of how we measured feasibility.
Assumption one: We can make consistently good coffee.
To test this: To measure the consistency of our products we needed to measure if we can build a regular customer base. To do this we produced and distributed loyalty cards, through which we can measure how many customers return for 5+ coffees during the pilot.
What would success look like? We set the goal of 20 full loyalty cards a week by the end of the four-week pilot.
What does the data show? Every week since week four has seen over 20 loyalty cards redeemed.
Validated? The data increases our confidence that we can sell a consistently good cup of coffee as we have reached our repeat customer targets.
We captured insight from our key audiences in various ways: individual daily diaries, the ‘coffee book’ (a notebook in which all are encouraged to jot down observations, quotes, hurdles and solutions, etc.), loyalty cards and their affiliated feedback form, sales data, pre-pilot and post-pilot participant interviews, customer research, to name a few. Our approach to learning and constantly recording insight has infected the barista’s too- twice on our last shift together, one of the trainee baristas turned to me after a conversation with a customer, asking where the coffee book is as “we need to write that down!”.
These varied data sources are instrumental in contributing to validating or questioning our main assumptions. Such evidence supports the above conclusion regarding loyalty cards and feasibility. We have more regular customers than this data shows, as we have found that many customers choose not to take loyalty cards as they always lose them, or they do not want to take a free coffee from a good cause. We also learn from the loyalty card data that, by only a slim margin, we have more external regulars, than internal regulars (50.5%:49.5%). In this pilot, its disproportionality been external customers that do not want a loyalty card, so the margin is likely larger than this. Together, this data will be valuable when we are considering where to test the social enterprise next. Alongside the quantitative loyalty card data, these insights have been instrumental in increasing our confidence that we can consistently serve high quality products, which is foundational to the feasibility of this social enterprise. This data doesn’t exclusivity relate to feasibility though, as it also increases our confidence in the desirability of the products. We have regulars that fill up their loyalty cards and give their free coffee to a colleague. Not only is the coffee good enough to keep them coming back, but it’s also so good that they’re taking action to help spread the word.
The data that we compiled in the first four weeks of the pilot built a strong case that Leaps & Grounds was feasible and impactful, and we learnt more about the desirability through this process. We passed our initial tests and felt confident with the results. Whilst the foundations of the coffee cart had been proven solid in this four-week pilot, there were still lots of questions to ask before we could form a clear picture of the model beyond the pilot stage.
Our team would not normally extend a pilot and would step back and reflect on our learning at that stage. But with a business like this, where sales grew organically, through word-of-mouth referrals, foot traffic and curiosity, the momentum and customer base we had built in stage one was a very valuable asset for us to continue our testing and learning. We had increased our daily sales by 52% between week one and week three, and by continuing to learn in an extended pilot, we would not need to repeat the work required to build a regular base. Further the relationships built with suppliers, trainee baristas, volunteers, and the endlessly helpful facilities team at UKO put us in a great position to keep testing. We were so enthused by the confidence we had built regarding the feasibility and impact of the model in just four weeks, we couldn’t resist the opportunity to get stuck in to understanding the viability of Leaps & Grounds.
Pilot one, stage two.
So, we decided to trade for a further five weeks, taking us through to the end of November. When we launched stage two of the pilot we shifted focus onto c. viability, and prioritised tested one key assumption here:
c- If we sell more than just coffee we can increase our revenue.
We were driven by customer insight from stage one when pivoting in the second stage, and I’ll set out one aspect of this below:
Assumption two: People want to buy snacks.
To test this: We placed an order with Breadwinners to sell their pastries from the cart. We liaised with facilities and the City of London Environmental Health team, and conducted rapid research in the area and priced our products accordingly.
Why pastries? During weeks three and four of the first stage of the pilot, we witnessed at least two customer a day purchase coffee from the cart in the morning while holding food items from elsewhere. Most of the time, they had purchased pastries. In these conversations, and documenting their frequency, we captured valuable insight to shape a new assumption for stage two: if we stock pastries, customers will buy them, and our revenue will grow.
What would success look like? The marker of success when testing a new product is to turn a profit and understand more about consumer preferences.
What does the data show so far? We stocked these products for two weeks and made a profit. We have been having conversations with the public about the quality of these products, allowing us to continuously improve through customer feedback.
This example allowed us to build confidence in the viability of the social enterprise, as a quick, early test in diversifying our revenue streams was successful in turning a profit.
What next?
Over the nine weeks of this pilot our confidence regarding the impact, feasibility and viability of the model has grown significantly. So has our confidence in desirability as a result of these tests. We are therefore comfortable investing further resources into developing Leaps & Grounds beyond this point. Currently we are considering what we would need to launch a full three-month program in 2022 and hope to test further locations and product lines.
The experience of the trainee barista’s this service has been designed to benefit will remain at the heart of the decision making and development of Leaps & Grounds. Data from both stages of the first pilot has significantly increased our confidence in the assumption that Leaps & Grounds can have a massive impact for participating women. Now we have built further confidence that participation is impactful, and the social enterprise is both feasible and viable, we can commit to designing a full programme and understanding more about maximising individual impact. This will certainly be more of a focus in future blogs.
For now, I hope this post serves as a good launch pad for all the other stories that contribute to the big picture of Leaps & Grounds, and brings everyone up to speed on our pilot journey so far.
Comment or email me (lizzieosullivan@redcross.org.uk) if you have any questions!
