u-experience team11

Advantage CardU-Experience

Lean LaunchPad Final Presentation – Team 11

Calvin ChenMark Grundman

Ria Kapila

# of Customers

Consumers

Retailers

Day 1 8 4

Day 2 20 0

Day 3 6 6

Day 4 13 2

Total 47 12

Business Type: Startup ?

Business Model Canvas

Cost Structure- Membership card (create & distribute)- Website creation- Marketing

Revenue Streams- Direct Sales- Subscription Fees- Point of Sale conversion

Key Partners

- Retail Shops- Service Companies- 3rd Party Social Networks- Clubs- Charities

Key Activities

- Selling- Building Website- Retail Partnerships

Value Proposition

- Monetary Savings (Discounts)- Additional Services- More Business (customers)- Business marketing

Customer Relationships

- Onboard local boutique retailers- Justify need- Maintain retail relationship- Word of mouth popularity

Customer Segments

- Boutique Store Retailers looking to expand small business- Students- Immigrants- Females (age 15 - 45) who like to try different boutique services- Customers >> New to the city >> Not loyal to brands >> Money conscious

Key Resources

- Network of Retail Stores- Savings offered

Channels

- Web sales of Advantage Card- Retail sales of Advantage Card

Day 1 Business Model Canvas

Existing Discount Model

Customers Restaurants

???How do I get customers to return?


Cost Structure

- Advantage card (create & distribute)- Website creation- Marketing & advertising- Overhead costs

Revenue Streams

- Direct Sales of Advantage card- Annual Subscription Fees

- Point of Sale conversion - Add-on Services (customer consumption data, etc)

Key Partners

- Retail Shops- Restaurants- Service Companies (beauty related, Spa)- 3rd Party Social Networks - Clubs (Zagat, Open Table) - Charities

Key Activities

- Marketing via 3rd Party Social Networks- Card Sales- Building Website- Retail Partnerships- Consumer Partnership

Value Proposition

- Monetary Savings (Discounts)- Additional Services- More Business (customers)- Perks & Benefits to customers (set by retailers)- New & recurring customers streams- Less severe margin erosion for returning customers- Business marketing- Flexibility of promotions


- Onboard local retailers (restaurants & beauty)- Justify need- Maintain retail relationships- Consumer awareness- Word of mouth popularity- Ensure ease of use- Ensure advantages are honored

Customer Segments

- Boutique Store Retailers - Health & Beauty Store Owners & Managers- Restaurant Owners & Managers

- Young professionals (18-30)- Consultants, Bankers, etc- Students- Females (age 15 - 45) who like to try different boutique services- Customers >> New to the city >> Not loyal to brands >> Money conscious

Key Resources

- Network of Retail Stores- Personal network of target consumers- Savings offered

Channels

- Web sales of Advantage Card- Retail sales of Advantage Card- Columbia University- Gourmet Clubs


Total NYC Retail Sales = $78B

Total NYC Restaurant/Health & Beauty Sales = $40B

Target= $5.7M

*Projected target value based on comparable service in UK using # of members as a percentage of total population. Applying that to NYC total population and per capita spending yields $5.7M.

*Projections based on NYC and is not indicative of total market. Expandable to other cities.

Initial Market Size

Proposed Model

NYC Experience

Dining



Cost Structure


Revenue Streams



Key Partners

- Retail Shops- Restaurants- Service Companies (beauty related, Spa)- 3rd Party Social Networks - Clubs (Zagat, Open Table) - Charities- -Seamless.com

Key Activities

- Marketing via 3rd Party Social Networks- Card Sales- Building Website- Retail Partnerships- Consumer

Partnership- App development

Value Proposition

- Monetary Savings (Discounts)- Additional Services- More Business (customers)- Perks & Benefits to customers (set by retailers) Big prize- New & recurring customers streams- Less severe margin erosion for returning customers- Business marketing- Flexibility of

promotions- Exclusivity - -Alcoholic

Beverages - Point System

(Airline Loyalty)- Curation



Customer Segments

- Boutique Store Retailers - Health & Beauty Store Owners & Managers- Restaurant Owners & Managers

- Young professionals (18-30)- Consultants, Bankers, etc- Students- Females (age 15 - 45) who like to try different boutique services- Customers >> New to the city >> Not loyal to brands >> Money conscious- Foodies- -Budget- -High Spender

Key Resources


Channels

- Web sales of Advantage Card- Retail sales of Advantage Card- Columbia University- Gourmet Clubs -Foodie networks


Customer Segments & Value Proposition

Proposed Model – Consumer

Study

NYC Experience

Dining


Customer Discovery: Learning

Hypotheses What we were asking What we learned

Small benefits upon each visit will drive new customers and make them loyal

FALSE

• What would you need to go out of your way to try a new place?

• What would you need to go back?

• What type of perks would enhance the experience and make you loyal?

• How do you envision this working?

• Would you pay for these benefits?

• People want exclusivity and big paydays even if it means waiting or spending more.

• People are more likely to try a new place based on monetary incentives but are more willing to return based on non-monetary experiences.

• Consumers want an airline model that rewards loyalty.

• Consumers will pay• Two types of consumers at

opposite sides of spectrum

Budget conscious and up front lock-in fee would drive behavior

FALSE

• If you were to pay up front for perpetual annual benefits would you be more inclined to go back?

• What do you look for in a restaurant?

• One time deal versus perpetual deals.

• Prize experience on par with food

• Will pay for that experience• Want exclusivity at higher end

restaurants• Willing to try new restaurants

if quality is ensured and special perk


Cost Structure


Revenue Streams



Key Partners

- Retail Shops- Restaurants- Service Companies (beauty related, Spa)- 3rd Party Social Networks - Clubs (Zagat, Open Table) - Charities- Seamless.com

Key Activities

- Marketing via 3rd Party Social Networks- Card Sales- Building Website- Retail Partnerships- Consumer

Partnership- App development

Value Proposition

- Monetary Savings (Discounts)- Additional Services- More Business (customers)- Perks & Benefits to customers (set by retailers) Big prize- New & recurring customers streams- Less severe margin erosion for returning customers- Business marketing- Flexibility of promotions- Exclusivity - Alcoholic Beverages - Point System (Airline Loyalty)- Curation



Customer Segments

- Boutique Store Retailers - Health & Beauty Store Owners & Managers- Mid-tier Restaurant Owners & Managers

- Young professionals (18-30)- Consultants, Bankers, etc- Students- Females (age 15 - 45) who like to try different boutique services- Customers >> New to the city >> Not loyal to brands- Foodies- Budget- High Spender

Key Resources


Channels

- Web sales of Advantage Card- Retail sales of Advantage Card- Columbia University- Gourmet Clubs - Foodie networks


Channels, Get Strategy, Revenue

Retailers:•C: Direct Sales•G: Interesting value proposition, distance self away from Groupon•R: Take a transaction cost on rewards spent, no upfront fee

Consumers:•C: Direct Sales, Dining clubs and organizations•G: Social Media, network, word of mouth•R: Direct Sales of card, Subscription fee

Proposed Model – Retailer Study

NYC Experience

Dining


Customer Discovery: Learning

Hypotheses What we were asking What we learned

Restaurants would be willing to create offerings to increase customer experience in exchange for loyalty

TRUE

• How do they retain customers?

• What type of perks would you be willing to offer recurring customers?

• What is the breakdown of your customers segment?

• Three types of restaurants - High Traffic - Proximity - Destination• Restaurants already have

offerings for their loyal customers

• Higher end restaurants aren’t as willing to offer monetary incentives for new customers

Restaurants would be willing to use external sites as a channel to advertise and bring in new customers

Depends

• Have you ever offered discounts, or daily deals through external sites?

• How do you feel about the idea of using discounts?

• When would you tend to offer these incentives (seasonal/by day or hours)?

• How do you currently market or advertise?

• All restaurants at some point have tried some sort of discounts

• The majority of proximity, higher end restaurants were no longer offering or willing to offer discounts

• High traffic, mid-priced restaurants continue to offer promotions for specific times throughout the year

• Typically advertise through word of mouth or external sites

4th Day!

Major Pivot

Focus on Consumer Experience & Become Revenue Streams for Restaurants


Cost Structure

- Advantage card (create & distribute)- Website creation- Marketing & advertising- Overhead costs - Membership card costs- Experience Reservation costs

Revenue Streams

- Point of Sale conversion - Direct Sales of Advantage card- Annual Subscription Fees- Add-on Services (customer consumption data, etc)- Service mark-up

Key Partners

- Retail Shops- Service Companies (beauty related Spa)- 3rd Party Social Networks - Clubs (Zagat, Open Table) - Charities- Seamless.com- Restaurants- Museums- Day Trips- Tourist

Attractions

Key Activities

- Marketing via Social Networks

- Card Sales- Building Website- Retail &

Consumer Partnerships

- App development- Club

Membership Sales

Value Proposition

- Monetary Savings/Discount- Additional Services- More Business (customers)- Perks/Benefits to customers (set by retailers) Big prize- New & recurring customers- Less severe margin erosion for returning customers- Alcoholic Beverages - Business marketing- Point System (Airline Loyalty)- Flexibility of promotions- Exclusivity - Curation - Special Experience @

Value for consumers- New Revenue source

for partners


- Onboard local retailers (restaurants & beauty)- Justify need- Word of mouth popularity- Maintain retail relationships- Consumer

awareness- Ensure ease of use- Ensure

advantages are honored

Customer Segments

- Boutique Store Retailers - Health & Beauty Store - Owners & Managers- Females (age 15 - 45) who like to try different boutique services- High Spender- Mid-tier Restaurant Owners & Managers- Customers: New to the city, Not loyal to brands, Foodies Budget

Targeted Retailers: - Owners/managers- Business Development Managers- VP of Sales

Consumers: - Young professionals (18-

30), Consultants, Bankers- Students- Singles (daters)- Corporate Relationship Managers

Key Resources

- Savings offered- Network of Retail Stores- Personal network

of target consumers & partners

- Software- Direct Sales

Channels

- Web sales of Advantage Card- Retail sales of Advantage Card- Gourmet Clubs - Foodie networks- Columbia University- Tourist Guides- Magazines- Social Networks


Hypothesis What we were asking What we learned

Partners:Partners would be willing to offer exclusive services for guaranteed revenue

Partners would be willing to allow us 30 day leeway to cancel if can’t hit quota

TBD

• Would you like to partner up for additional revenue source?

• Would you allow us to buy services in bulk for a % discount?

• Would you be able to handle a 30 day notice for any bulk reservations through our club?

• Willing to partner if business is guaranteed

• Need larger sample size to evaluate in near future

Consumers:Consumers would prefer exclusive experiences and would be willing to pay for uniqueness

TRUE

• Would you be willing to be part of a club that gives you special experiences in NYC?

• Would you prefer food experience or other intangible experience?

• How often would you take advantage of this club for the special offers?

• Consumers are willing to pay for experiences

• Most of them would prefer both food and other intangible experiences

• Most of the consumers would be willing to take advantage of club membership more than twice a month

Customer Discovery - Learning

Next Steps…

• Customer Re-discovery• Further study Competition in market space• Re-evaluate Market Size & positioning• Test & iterate Hypothesis• Go out & interview potential consumers &

partners• Identify roadblocks & potential solutions• Update Business Model Canvas• Rinse and Repeat

u-experience team11

Education

total nyc retail sales

retail stores savings

business type

retail relationship

small business students

service companies beauty

nyc total population

b target