KOHAGeneralIdeaStudy done by Marriott School of Management using GroupSolverTM
AllRightsReserved.GroupSolver,Inc.2017
BACKGROUND
KOHAexiststopreservethehealthandvitalityofthousandsofneighborhoodcommunitiesnationwidebylinking independentsmall-businessownersdirectlytokeylocalconsumerpopulationsthroughameaningful,comprehensiverewardsincentivessystem.
• Approximately100Knewbrick&mortarsmallbusinessesopeneachyearintheUS,with6-7millionbrick&mortarsmall-businessownersatanyonetime.
• 2015:around70%ofthesebusinessownersexploredatleasttwoDigitalCustomerLoyaltysolutionstohelpdrivemoresalesrevenue.
• 78%ofconsumerswithhouseholdincomesof$100k(+)reportedusinga“digital”deviceatleasttwiceduringeachbrick&mortartransactionin2015toeitherassisttheirdecision-makingortoexecutetheirpurchase.
SITUATION
SurveyTool:GroupSolverSurveycontained
1qualifyingquestion- RespondentswereaskediftheyhadchildrenathomeandifnotthesurveywasterminatedKOHAexplainervideo2open-endedquestions7exitquestionsforsegmentationandmarketsizingpurposes
Totalof175generalpopulationrespondents
METHODOLOGY
SURVEYDEMOGRAPHICS
IDEACLOUD
AfterwatchingavideoexplainingwhatKOHAwasrespondentswereaskedtosharetheirthoughtsaboutKOHA.Totheleftisanideacloudhighlightingsomeoftheresponses
TheanswerswereoverwhelminglypositiveRespondentscitedseveralreasonsfortheirapproval including:
• Easyincomparisontotraditionalfundraisingefforts
• Everyonewins• Twobirdswithonestone
“Ithinkthatthisisanexcellentideathatwouldbesupportedbythecommunityingeneral.”100%support
“Thisisasmartwaytogetpeopletoparticipate”93%support
“Betterthanbuyingcheapjunkfromacatalog.”89%support
“Snappingpicturesofreceiptsiseasyandissaferthanaskingthekidstogodoortodoor.”87%support
“Thisisagreatidea.Thissupportsboththeschoolandlocalbusinesses.”91%
LikelihoodScore=5.89 outofpossible7
~74%likely to
use
Very Likely Somewhat Neither Somewhat Unlikely Verylikely likely likely nor unlikely unlikely
unlikely
LIKELINESSTOUSEKOHARespondentswereaskedtoevaluatetheirlikelihoodofusingKOHAandwhetherornotthey
supportedalistofstatements
LikelinesstouseKOHA %likelytouse #ofhouseholdsineachcategory(%x39,411,765)
Verylikely 40.57% 15,989,916
Likely 32.57% 12,836,975
Somewhatlikely 16.00% 6,305,882
Neitherlikelynorunlikely 4.57% 1,801,681
Somewhatunlikely 1.71% 675,630
Unlikely 1.14% 450,420
Veryunlikely 3.43% 1,351,261
ThetotaldomesticmarketsizeforKOHA,measuredinhouseholds,isabout39,411,765,or34%ofallhouseholds.
Accordingtoourstudy,28,826,891 ofthosehouseholdsare“veryormoderatelylikely”tousetheapp
CUSTOMERDEMAND:SizableDemandExistsinTargetSegment
KOHAUniversalRewardsStudy done by GroupSolverTM
AllRightsReserved.GroupSolver,Inc.2017
Proposed loyalty donation network system is more than twice as influential on customer behavior as traditional loyalty programs are
The target demographic (parents with children in school) also shows a sizable difference in likelihood of being influenced by loyalty donation networks over regular loyalty programs
Individuals with no children at home are actually more likely than parents with children at home to have their shopping/dining habits influenced by KOHA
Respondents expect to use KOHA to buy more products than services
Respondents may be more likely to use KOHA for larger purchases
87.4% of respondents would be willing to use KOHA if the donation percentage were 5% or greater on a $40 purchase
EXECUTIVESUMMARY
116%morerespondents“stronglyagree”thatwheretheyshopanddinewouldbeinfluencedbyacooperative+donatingloyaltyprogramthanbyatraditionalloyaltyprogram
INFLUENCEOFLOYALTYPROGRAMS
INFLUENCEOFLOYALTYPROGRAMSIndependently, the cooperative rewards program seems to have a greater impact than the donation program
When the two concepts are combined, the effect of each is compounded
The primary effect of increasing program value is to change respondents who are “somewhat likely” to “very likely.”
“Disagree” respondents tend to move to neutral territory
MOSTPOPULARKOHASPENDINGCATEGORIES“PleaseselectthestorecategoriesatwhichyouwouldmostlikelyuseKOHA(i.e.toreceivepersonalrewardsANDcontributionsforyourlocalschoolornon-profit)”
Themost-usedcategorieswillhavetodowithnecessitiessuchascategorieslikegroceries,drugstores,andclothing
“Fun&Entertainment”and“DiningOut”arealsolikelytobehighlyused
KOHAcustomersimaginetheywouldusetheplatformwhenpurchasingnecessitiesandentertainment
“PleaseselectthestorecategoriesatwhichyouwouldmostlikelyuseKOHA(i.e.toreceivepersonalrewardsANDcontributionsforyourlocalschoolornon-profit)”
KOHA customers would be interested in using the platform at a wide array of shopping categories
Several “other spending” categories attracted more attention than the “frequent spending” categories of the previous slide
Customers seem most willing to use KOHA if the dollar amount of the purchase is greater
MOREINFREQUENTKOHASPENDINGCATEGORIES
INFLUENCEOFKOHA:TARGETMARKET(PARENTS)
Parentswithchildrenathomeare82%morelikelyto“stronglyagree”thattheirbehaviorwillbeinfluencedbyloyaltyprogramsiftheprogramisaloyaltydonatingnetwork
“Pleaseconsidertraditionalloyaltyprogramsatlocalbusinesses(Notlargebig-box,departmentorgrocerystores)youmayhaveheardoforparticipatedin.Whatmakesyouwanttoparticipateinsuchrewards/loyaltyprograms?”
“Earningpointsorhavinglowerprices”87%support
“Theabilitytosavemoneybybecomingaloyalcustomer”84%support
“Helpslocalschools.”70%support
“Ihelpoutalocalbusiness.”79%support
“Igetinsiderdealssuchasearlypurchases.”71%support
“Itypicallyhavenointerestinparticipatinginloyaltyprograms.”12%support
Respondentswithnochildrenathomearemoreinfluencedbythecombinationofrewardsnetworksanddonationnetworksthanparentswithchildrenathomeare
Agreaterpercentageofthosewithnochildrenathomestronglyagreethattheirbehaviorwouldbeinfluencedbyaloyaltydonatingnetwork
Whenitcomestoordinaryloyaltyprograms,relativeparityexistsbetweenthosewhohavekidsathomeandthosewhohavenokidsathome
N(kids at home)=80 N(nokidsathome)=71
COMPARISON:KIDSATHOMEVS.NOKIDSATHOME
N(kids at home)=80
N(no kids at home)=71
Whileagreaterpercentageofthosewithchildrenathomestronglyagreethattheirbehaviorwouldbeinfluencedbyacooperativerewardsnetwork,thereisaverylargecontingentofthosewithnokidsathomewhoareattractedbythecooperativenetwork.
Thosewithchildrenathomearemorelikelytobeinfluencedbydonationnetworksthantheircounterpartswhohavenokidsathome
COMPARISON:KIDSATHOMEVS.NOKIDSATHOME
Thosewithlowerincomes(below75K)aremorelikelytosupportstatementsaboutsavings,suchas“offerdiscount”(statementI)Womenaremorelikelythanmentosupportsomestatementsaboutwantingtohelpthecommunity,suchas“Ihelpoutalocalbusiness”(statementC)
N=151
Lower-incomehouseholdsaremoremotivatedbysavings;womenaremorelikelytohavecharitablemotivations “Pleaseconsidertraditional
loyaltyprogramsatlocalbusinesses(Notlargebig-box,departmentorgrocerystores)youmayhaveheardoforparticipatedin.Whatmakesyouwanttoparticipateinsuchrewards/loyaltyprograms?”
INTELLISEGMENT:LOYALTYPROGRAMMOTIVATIONS
LoyaltyDonationNetworks(rewardsnetworksthatofferoneloyaltyprogramacrosslocationsanddonatetolocalschoolsorcharities)aremuchmorelikelytobeinfluentialonwhereconsumersshopanddinethanaretraditionalloyaltyprograms
Thiseffectisparticularlynoticeableinhowthe“verystronglyagree”segmentgrows.Thisisparticularlytelling,giventhat“verystronglyagree”isthesegmentmostlikelytotranslateintoactualaction
Thecooperativerewardsnetworkseemstohaveagreaterimpactonrespondents’likelihoodstobeinfluencedthanthedonating
Whenthe“donations”and“rewardsnetwork”ideasarecombined,theeffectisgreaterthaneitherofthemalone
Thedifferenceinrespondentreactionsbetweenordinaryrewardsprogramsandloyaltyrewardsnetworksarestatisticallysignificant
RespondentsexpecttouseKOHAtobuymoreproductsthanservices
Necessitiessuchasfoodandclothingmakeupalargeportionoftheseproducts
Fun&EntertainmentandEatingOutarealsosettobebigsituationsforKOHAusage
Thetargetdemographic(parentswithchildreninschool)alsoshowsasizabledifferenceinlikelihoodofbeinginfluencedbyloyaltydonationnetworksoverregularloyaltyprograms
DETAILEDSUMMARYOFFINDINGS
AbriefexplanationofGroupSolver’squalitativemethodology
• Allowingrespondentstointeractwiththeideasofothersgivesusquantitativesupportbehindthoseanswers,therebyallowingustogaugetherelativeimportanceofeachstatement
• Thetoolis,ineffect,aself-buildingsurveyplatformthatincorporateselementsofcrowdintelligence,machinelearning,andadvancedstatisticalmodelling
• Moreinformationcanbefoundatwww.groupsolver.com