In the Months After INVANTI, Lizzie Merrill Remains in South Bend Building EllaFund

Her new venture aims to use grocery discounts and coupons to change the way people save money.

It’s been five months since Cohort 1 wrapped up. Lizzie Merrill, along with the four other INVANTIpreneurs, worked to tackle issues affecting the financial health of Americans. Her startup venture, Ellafund, helps users to create an emergency fund by transferring grocery store loyalty savings into a rainy day emergency fund.

What’s been happening with Ellafund since finishing Cohort 1?

Almost nothing changed. I still do the exact thing every day. I’m still trying to get Ellafund off the ground, I still chat with Dustin + Maria when I’m stuck on a problem.

The concept for Ellafund is that it will help people build a savings account by automatically transferring all discounts and coupons that they get shopping for groceries.

Getting market validation from consumers.

I’ve just finished my first beta trial — I wanted to see if I could get people to sign up for this, even though the platform isn’t built yet. Then I could show that people were interested in the idea, even though right now it’s a very arduous process:

1. Sign up for Ellafund.

2. Open a savings account.

3. Send Ellafund pictures of every grocery receipt.

4. Transfer savings into savings account.

Because there were many gates to the beta, I was able to see, do people sign up? Do they open a bank account? Do they send receipts? At the beginning, we had about three people sign up a week and no one opened a bank account, they just signed up.

The next phase, I set up a match on savings — so every single time you send us a receipt, we’ll match the savings 50%. And that seriously increased the signups, we hit about twenty in a week. But no one has actually sent me their receipts! They signed up and made a bank account, but didn’t actually follow through.

Now, I’m modifying the trial again because from what we learned on the first two attempts, people are interested, I’m just putting up 900 barriers to actually get them to sign up. Instead, I’m going to change the landing page of the beta so that users will be able to express their interest in the program and choose which store they’d like to use Ellafund with. We’ll have a list of 4–5 nationwide grocery stores and also allow users to enter new stores. When they fill out the form, the grocery store will receive a direct email from that user that says, I want Ellafund at your store. I think this will better demonstrate interest for grocery stores because it’ll give hard numbers.

Getting interest from grocery stores.

I’ve also been setting up conversations with grocery stores. The business model is a little complicated because the stores are who I’ll be selling to and will have a partnership with. Grocery stores are my real customers. Ellafund will be able to work as a loyalty program for them. The whole reason that it will work is that it helps both consumers and the stores.

There is a crisis in grocery store loyalty right now — large stores like Walmart and Target spend millions of dollars in marketing to try and foster loyalty in its customers and smaller stores just have your run-of-the-mill loyalty programs. It’s just a glorified CRM (Customer Relationship Management). There’s also been a 34% loyalty usage decline.

The two things that store consumers complain about is that they’re not earning rewards quickly enough and the rewards don’t matter.

I want to offer them an add-on to their loyalty program. Ellafund won’t cost the stores anything — they don’t have to change the discounts, they don’t have to change their loyalty program, and they don’t have to learn new ways to analyze the data.

For example, if there was a $1 off on a $4 ketchup bottle, the consumer only has to pay $3 with a regular loyalty program. With Ellafund, the store would charge the full $4 upfront and the $1 discount would go to the consumer’s Ellafund savings account.

Consumers would build a substantial savings account very quickly, the loyalty program would give real rewards, real money in their hand.

A secondary benefit for stores is that since profit margins are really low, Ellafund would give them a buffer in their cash flow because they don’t have to give out those discounts immediately.

Next steps.

I’ve talked to loyalty programs and grocery stores to make sure that this is something that stores actually want, and it looks like yes! It’s a tricky situation because I can’t sell to stores unless I can prove that customers want this, but I can’t sell it well to customers if I can’t make anything move forward with the stores. It’s a catch-22, but I’m going to work on setting up a pilot trial with a grocery store.

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