Revenue Streams

Marie Mansfield

A ‘startup’ is a company that is confused about – 1. What its product is. 2. Who its customers are. 3. How to make money.”— so says Dave McClure, 500Startups co-founder.

For the Big Data team this week has been all about our revenue streams and how to make money.

As we evolve our approach and learnings through our SME and customer interviews our main focus this week has been to identify the revenue streams for our data service.

This week has been the most complex and confusing as we tease out the value of our product and the potential customers who will be willing to pay for it. We are still at the early stages.

Based on our 30 + interviews so far we are now more aware that cost is the key driving factors for small business owners so our solution will need to be high value and at a price small businesses can afford and more importantly are willing to pay for.

To attract SME our starter service would be based on a freemium model offering SMEs targeted customer data relevant to their business. This would not yield any revenue but vital to launch our service and enable SMEs to try out our solution with no cost impact for them.

Our next level service would be a Premium service offering customised reports updated with latest data/insights for their business.-Market trends/Referral scheme based on a subscription model.

And finally a Concierge Service – with consultants to advise /help SMEs implement   recommendation based on the data /insights for their business.

We have now come to realise we need to extend our revenue streams beyond SMEs to find new potential review streams.

 As a team we will explore  third parties that would value market and trend reports on SME – Start-ups, Investors, Government Bodies.

We have not yet figured out how to test our new revenue streams and this will be the focus of the team over the next 2 weeks.

What we have learnt in the class this week.

This week it has been great to see all the other team projects come together and share their learnings at our Monday class. All teams seem to be experiencing the same challenges testing their Value proposition and assessing revenue streams. There is no  easy answer for any of the teams and will involve  many more targeted interviews and experiments with end customers, relevant SMEs and some guidance from start-ups who can share their experience and advice.

Role of the each of the team during the week.

With just 3 more weeks to the end of our project our team is getting clearer on each of our focus areas.

·         Widen our interview net beyond SMEs – look to mentors, start-ups and potential 3^rd parties to explore/test new revenue streams.

·         Complete 100 interviews with SMEs and consumers – each team member will focus on 20 interviews.

·         Weekly update of team blog – rotate weekly blog update.

·         1^st MVP Prototype

·         V1 Landing Page

Sean McNulty - Mapping Our Customers

Mapping our Customers

By Gearóid McKendrick

This week (20 October), Sean McNulty, CEO of Dolmen was a guest lecturer. Sean shared some of his experience with us about making ideas work and developing new products.

This session was really interesting for us and as part of the session we began working on a needs discovery map for our customers, along with empathy maps and need statements.

Needs Discovery Map

We found this was a great way to look at our potential customers and was not something we had thought of before. It involved mapping out a process in which the customer is involved and looking at the emotions (positive or negative) associated with each step in the process.

This was very interesting as it made us focus on the customer pain points. For our examples we used two different types of users: One was a loyal customer of a restaurant going for a meal and the other was the process of restaurant changing their menu. You can see our needs discovery maps for both customer types below:

Regular Rory – Loyal restaurant customer needs discovery map:

Owner Olivia – Restaurant owner needs discovery map

Empathy Map

After looking at the need discovery map we focused on the empathy maps. This was another useful and interesting too which focuses on the different type of user or stakeholder that might come across our product.

The main aim of the empathy maps is to discovery user needs that are under-met or not met at all. This is done by choosing individual pain points and determining what would be a great outcome for each pain point.

Need Statements

We worked on need statements for the last part of the class. These are statements that focus on the outcome or goal for the customer and how the outcome can be measured. These statements which are redrafted multiple times and are informed by the insights gained from our customer interviews and should be:

• Focused on the outcome rather than a solution
• Specific
• Looked at from a broad perspective
• Use positive and relevant language

The need statements for our business are:

1. Easily gathering useful insights about their customers' spending habits and preferences, and understanding how to use this data to develop/expand their business in a practical and meaningful way

2. Maximising the benefit of existing/proposed loyalty schemes, to both SMEs and their customers, by capturing data to improve customer experience and inform business decisions

3. Making smart business decisions in a cost-effective way, through identifying the needs of their customers 

Refining our Value Proposition through Customer Interviews

SME Customer Interviews – Our Analysis

By Gearóid McKendrick

This week we met as a team on Monday (13^th of October) to take stock of where we are with the project. We took this opportunity to compare notes and to analyse the customer interviews we have done so far, hoping to spot some trends and insights along the way!

For this meeting we focused on discussing the results of our SME interviews. While doing this we noticed some themes that were popping up. In particular independent café/restaurant owner were slightly anti-branding/marketing. They want to keep their independent feel and personal service and are cautious about upsetting or annoying their customers. However, they did seem to have a strong interest in the data analysis side of the business but would want to gather data in a way that wouldn’t annoy customers.

We noticed that those of whom we interviewed could be roughly placed in 4 different categories (below). This was interesting for us, as it allowed it to identify our SME customers even more specifically and eliminate those who we don’t think would be interested:

1. SME’s that don’t want to expand

We found that some small business do not want to expand – they are passionate about what they are doing and that’s enough for them. They have built a personal relationship with customers over the years and are happy to continue as they are. For them, this is a passion and they have no real need or desire to expand their business. Therefore the people in this segment may not be interested in a product that helps them make more effective business decisions.

2. SME’s that want to grow

This will be a key segment for our business. These are SME owners who are in the process of expanding or who want to expand their business. They want to bring their passion and love for what they do to more and more people. They are savvier about things like data analysis and marketing, but are still cautious about marketing. Above all, they want to keep their customers happy and would not like to do anything that is likely to upset them.

Some are too busy to look at data solutions but are tech savvy. They would like to implement a loyalty scheme for customers, but simple don’t have the time. For many, the only data they have is from the till system but they have little time to do analysis on this.

Others currently use digital loyalty cards and use this data to make business decisions. However this data is being used to bring in new customers rather than developing and retaining current customers. One of the biggest gains for these people would be making data analysis less time consuming and finding a way to dig deeper into data.

The people we spoke to in this category had strong opinions on data. They do not like the idea of gathering data as they have a close relationships with their customers and don’t want to jeopardise that. They are wary or losing their personal level of customer service. A pain for this category is finding a way to collect customer information in a way that doesn’t feel impersonal or too ‘corporate’.

3. Different Industries

We interviewed businesses from a range different sectors other than the service industry and found that they have different issues. Included in these interviews were travel, web and construction businesses.  One of their issues was pricing. They would like to find more trends and insights about their customer base and what their average spend is on similar services and products. This would allow them to price their product more effectively. They have made mistakes on pricing because of lack of information about how much customers are willing to pay. A gain for them would be replacing hindsight with insight!

Another pain for them is lack of qualitative customer feedback. However, some (specifically web based) find the information received from Google analytics is sufficient. Most of those interviewed would be interested in some sort of a corporate loyalty scheme to reward their corporate customers.

4. B2B’s

For B2B’s loyalty cards wouldn’t work for them but would be interested in customer and market insights Again this category would like information and insights to help them ensure that they are not making mistakes when making business decisions.

We found that a lot of decisions and information they have about customers are based on assumptions and observations rather than actual data.

So, what next?

We all agreed that we are finding it difficult to get people to interview, especially for the SME segment of the business. Although we have managed to gain some insights through interviews, we are concentrating our efforts for the next two weeks on tracking down more people. Aisling has put together a list of SME owner from LinkedIn. We are going to divide this list and get in touch with as many people as possible.

The insights we get from talking to people will be key to building our business successfully, so this is a priority for the new two weeks.

Customer Journey Get, Keep and Grow!

Oct 21^st 2014

This week, our focus has been on customer relationships – how we get, keep and grow our business. As we have progressed with our Canvas over the last few weeks, we have identified 3 primary customer segments for our project; SMEs involved in the B2C space, loyal customers of SMEs, and government agencies/investors and media bodies. With this in mind, we decided to outline the ‘get, keep and grow’ aspects of each segment. As our channels are still slightly complex in that our service and product would be delivered through different channels depending on the segment and stage of the service, we felt this would be the simplest way to approach the task. One thing that has certainly become evident from our conversations with SMEs is that they are a close-knit community, and often lean on one another for support, either through personal connections or business groups set up specifically to facilitate a community for small businesses. Many also seek outside support or advice from professional consultants early in their life cycle, so it has become evident that word of mouth will play a huge role for us.

Most SMEs have also highlighted the lack of resources that they have to dedicate towards such a service, so it’s clear that we need to look at a low-cost model that requires very little additional workload for the business, or even isolate the selling of trend reports to third parties as the revenue stream. We are considering the freemium model at this stage as well, with a basic report available as part of the free service, but offering paid tailored packages for those looking for more in-depth reports and more hands-on consultancy.

 

  

For customers, we have highlighted the need for the rewards/offers to them to be high quality, and of real value, as well as ensuring that they feel that their data is secure, and that the app is not obtrusive. For third parties, trend reports are often vital for them to make informed business or investment decisions, for them to gain market insights and draw up accurate forecasts, so there must be a quality analysis done and high-quality reports drawn up. The reports must be released regularly, to keep firms interested, as they will want to keep abreast of current trends.

We are still finding it quite tricky to secure interviews with SMEs – one of the main reasons behind this that we have encountered is a sheer lack of time on SME owners’ part. As we have mentioned on numerous occasions, they tend to be quite hands on, and resources tend to be stretched, so this has been a challenge. We will continue to use the list that Aisling has drawn up, and as I am a member and active participant in the Irish Biz Party Group (a forum for Irish entrepreneurs and small businesses), I have posted there to ask if any members would be willing to be interviewed to help us out. 

Aside from this, the general consensus in our group has been that perhaps we aren't casting the net widely enough, and that maybe our focus is too narrow by being just on SMEs themselves and customers. Over the coming weeks, we will be looking to interview others that work closely with SMEs that may be able to offer valuable insights and help us better our knowledge of our customer segments using an indirect approach, such as business consultants, technology experts etc. As Peter Drucker put it, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself”! 

Customer Journey - pains and gains

Oct 10th 2014

This week we aim to learn about our customers journey by jumping in their skin and discovering if Engage Digital’s offering will satisfy a need, a want or is it simply just something nice to have.

We have learned that we need to really listen to the 'pains and gains' of our customers to understand their needs and to satisfy them effectively. We need to keep pushing till it hurts to discover pain points! As extreme as it sounds this week we are out to really learn what pains our customers face. 

We want to create a solution that our customers NEED we don't just want Digital Engage to be a product customers WANT or a product customers think would be NICE TO HAVE. We want this to be something they can't live without!

We need to ensure that the needs of our customers match our value proposition.

Our Current Value Proposition:

Engage Digital provides SME’s in the food, leisure and service industrywith a solution to access analysed information and insights about theircustomers, to aid them in making effective business decisions. 

We need to align this to our customers Need these two to really put Value in what we have to offer.

So this seems like a massive undertaking and we don't think that there is a post-it big enough to fit our to-do list. But we need to start somewhere! So this week we have decided to start off by using our new set of interview questions to help us understand our customer’s pains and gains

We will also create a new set of questions for loyalty card holders to discover the pains and gains they face. We will ask document customers views towards loyalty rewards, are they a need, want or nice to have? We will be using these interviews to help us test our hypothesis that digital loyalty cards will be an effective medium to collect consumer insights. 

We will be creating new consumer personas (both owners and customers) to represent the new customers emerging from our interviews.

We will be begin to create our Minimum Viable Product. So far we have created a short animated video explaining what we do.

Next we will put this video about us on a landing page with a link to add contact details for further information.

We will update you next week on our progress with SME and consumer interviews.
\you can check out our video here! https://www.youtube.com/watch?v=NjWxr22aqb0

Enjoy

Aisling

Lecture Number Three - Are You Listening?

Lecture Number Three 29/9/14 – Are You Listening?

One of the most interesting aspects of this module is the ‘flipped classroom’, and today’s class certainly highlighted that to our group. We learn almost as much from the other groups, their ideas and presentations, their questions and their comments, as we do from Raomal, and when speaking during our break, we agreed that it is one of our favourite aspects of the module; it is so interactive and based so heavily on peer learning.

The main thing that struck us during the class was not how quickly the ideas are developing and being refined, or how things are progressing with the projects in general, but something much simpler – listening. It is something that was pointed out on a number of occasions this evening, and upon reflection, we realised that it can often be quite difficult to do in this ‘flipped classroom’ setting. It isn't down to a lack of respect for our classmates, or an inability to listen in general, nor downplaying any contribution or suggestion they are making to our ideas. We concluded that it usually isn't even down to thinking our own ideas are great, nor that they are perfect. It is simply the enthusiasm to engage with our peers, to interact and respond to them, but in doing so, often we are so intent on answering, on showing them our eagerness to engage with them, that we aren't necessarily listening as intently as we should, or hearing what they are saying to its full effect.

I’m sure a lot of us are guilty of this in different environments as well – it is nearly a basic human instinct, to want to show the person addressing us our willingness to engage with them, that we are interested and value what they are saying, but ironically, in our eagerness, we can often miss the most important points of their suggestions or comments. Even well-established business people often struggle to truly listen, and it is a skill that this class is helping us all to hone. As the revered Robert Baden-Powell once said, “If you make listening and observation your occupation, you will gain much more than you can by talking.”

Customer segments

Following on from our recent presentation on our Value Proposition we have met to discuss next steps in the project.

We focused on delegating interviews with our customer and decided that we would each complete 25 over the 12 week project and at least 2 per week.

We decided to advance our interview questions to test our hypothesis; would SMEs use loyalty cards to collect info on their consumers. Would receiving the collected data in a clear and analysed form add benefit to them.

We have included questions such as;


What are the most difficult business decisions facing you?
What information do you need to make these decisions easier?
Have you collected information in the past - how did you do this?
How do you feel about loyalty schemes?
Did you have loyalty schemes in the past? Were they successful?

Pains and Gains
We want to learn what our customers pains are to see where we can add value.
We are going to open the interview to discover what their challenges are.We will then lead that into business decisions.

The next step we are taking is to build our minimum viable product. We are creating a short animated video, outlining our value proposition, we will then leave a box where customers can leave their e-mail to find out more.

We will compare views to e-mails left and this will indicate interest levels.

The next big decisions facing us are; Do we hone in on a certain industry i.e Hospitality
Is loyalty cards the best way to collect data? Will customers use digital loyalty cards?

We will incorporate these problems in our next set of interviews.