We are happy to announce that our company has moved one important step forward. Milestone 2 has been reached: kooma·looma increases sales and user loyalty for mobile and web companies.
Many start-ups begin with what their founders consider a brilliant idea or disruptive business concept. However, new businesses models, new products and services are always characterized by a certain uncertainty. The factors that determine the success or failure of the entrepreneurial initiative are many, both internal and external and with different degrees of impact with respect to the development stage of the start-up itself.
According to a CB Insights report, “No Market Need” is ranked as the #1 reason as to why start-ups fail, and accounts for 42% of all start-up initiative failures. This means that almost half of the start-ups have not succeeded because they have either misjudged the real needs of its target customers, or have been incapable of developing a product capable of solving the proposed need or have overestimated the market size.
In order to double our chances of success, we decided from the beginning we would as a first step develop a Minimum Viable Product (MVP) and then focus on testing it in the market before committing larger investments.
kooma·looma is an open coalition loyalty platform and program that helps mobile and web companies increase sales and customer loyalty. There is no need to question the size of the market (Mobile and Web Commerce). We also have no doubts that the targeted customers’ top need is to increase sales and loyalty. Our main concern instead was to make sure our product was capable of resolving the problem for our customer. Therefore after developing the MVP our second milestone was to validate the value proposition: “kooma·looma increases sales and user loyalty”
The AB Test
We launched kooma·looma through our first partner in Q4 2015 by allowing end users (initially in Turkey, then in Switzerland) to earn points for purchases made via mobile on some of the top global game publishers. Before the launch, we had previously created different homogeneous subsets of users, clustered by different aspects such as monthly spending amount, products purchased, mobile operator, and other.
We performed extensive AB tests to study the behaviour of the users. More specifically some subsets of users were allowed to collect points, while the other subsets were not aware of the kooma·looma loyalty system implemented by the provider.
kooma·looma increases sales
Our data is still confidential but we can already share that we have observed double digit spending increases, together with increased loyalty rates for the subsets of users that participated in the programme. Users that collected “kooma points” for their purchases spent more, and returned more than those who didn’t. We now have proof that koomalooma increases sales and loyalty and this is for us our first great success.
We will continue to track data and improve our knowledge as to the degree of sales increase, profitability, end user loyalty and engagement. This will be done also in relation to variables such as the program funding rate by the merchant, the product categories and the geographic market.
Now that Milestone 2 is achieved it is time to move on to the next phase. In the next months we will focus on structuring the business and on the commercialization of our programme. More specifically we will work on the team, the go-to-market, and the general development and operations. If you are interested in understanding what kooma·looma can do for your business please check our kooma·looma for business site and get in touch with us.