Sell a Service

Sell a Service - changing the world of e-commerce for the service industry


Objective

The aim of Sell a Service is to create a new standard of digitization of services in the e-commerce channel. The Sell a Service platform will allow the development of an online service business as simple and intuitive as running a product business. By providing know-how and technological solutions supporting online stores, it will enable service businesses to achieve higher results in sales and will affect the development of the service economy in Europe (accounting for over 55% of GDP in Poland alone).

Unlike companies offering products in e-commerce, the sale of services is more complicated and is characterized by contact points, which until now were face-to-face. The “new normality” predicts the emergence of more pandemic waves and other (economic / environmental) conditions in which business must become resilient and preview longer customer journeys than before. The current standard of the online store and the technological solutions available on the market (e-commerce platforms, applications) are not adapted to the sale of services. Despite the fact that the data indicate the penetration of e-commerce in the shopping category up to 67% globally (Nielsen Report 2021), the level of customer loyalty is visibly decreasing. Service business models need to respond to new consumer behavior, progressive digitization, the need for a comprehensive approach to such elements of a customer journey such as the after-purchase, related services, loyalty, upselling.



Product / Solution

Sell ​​a Service is working on technological solutions ready to be implemented in an e-commerce store - in cooperation with selected platforms / e-commerce engines; and a model of a strategic process, providing knowledge and solutions for the implementation of a service business in e-commerce (we call it the framework). The framework will be embedded in the web platform. The framework contains steps of action in the field of implementation / optimization of e-commerce for the service business (including analysis of gaps in the industry and the potential for digitization of sales of services), a system enabling its download and the possibility of purchasing additional strategies and consulting services. Currently, the market does not offer process or technological solutions at the stage of selection or (partially) implementation of services - such as comparison of parameters, opinion panel, content optimization that affects the decision to choose a service provider, or support in building customer relationships service (we have defined more than 8 strengths of contact and gaps for technological solutions). From the technical side, the challenge is to transfer the existing point of contact in the area of ​​customer-service from the real world to the virtual world, while maintaining the presentation possibilities and direct communication. The indicated problem will be solved by mapping the most important elements of the real contact point for the process of selling services, compared to the product model. The process that will be examined, recreated and used to create a stepwise model of implementing service sales on the Internet is currently not available on the market in any form. The competition focused its efforts on satisfying the needs of product businesses, without the support and personalization of the e-commerce service industry.


First widget to be implemented

The framework will offer several technological and strategic solutions. First tech solution to be design and created will be the Service Comparison Evaluation Model.

MOMENT ON CUSTOMER JOURNEY
Initial stage - entering the website of the online store,
comparing services to the competition / + services of a
given company (available on the store's website)

MAIN PERFORMANCE
display model - parameters such as quality (opinions
downloaded from Google Business API, Facebook API,
other open service business assessment systems),
availability and price comparisons.

TECHNOLOGY
Using schema.org structured data - JSON-LD, RDFa, or
Microdata.



Market

The value of the e-commerce market in 2021 exceeded PLN 111 billion; 56 percent was for the purchase of products, the remaining 44 percent - for the purchase of services. According to PMR forecasts, the value of the online trade in services in Poland will increase in 2027 to PLN 97 billion from PLN 48.7 billion in 2021. In the long term, the market will be supported by the fact that the number of services available only via the Internet is growing. Sell ​​a Service's clients are representatives of service businesses and implementation partners - e-commerce platforms / applications. A few of the most important aspects that are the basis for building the credibility and legitimacy of Sell a Service:
The business strategy now is to build resilience. Post-pandemic conditions, the economic situation and the need to pay attention to "extending the customer journey" builds the potential for introducing services to business and selling them via the Internet,
Market gaps: lack of solutions tailored for e-commerce service business in the form of implementable tools and standards for building e-commerce strategies for services,
World markets reports indicate tactics for moving services to e-commerce (including Nielsen 2021). One of the directions is the need to build an ecosystem of online services around brands and redesign a journey around them - supported by services,
PMR estimates that it will exceed the next 3% threshold per year in 2022, and the penetration of other industries in e-commerce (the high potential of service industries is indicated),
Localisation as an aspect typical for services. At the end of 2021, 80% of users declared a change / experiments with buying products online from a different brand than before (source: e-marketer)



Business model

The business model assumes membership packages - subscription by users representing service business entities (BASIC / PRO), providing licenses for e-commerce platforms and applications, premium content services and certification. The framework will be made available under an open-source license to entities involved in the creation of online stores for service businesses. The platform will offer the option to purchase membership. The level and cost of membership will depend on the number of strategic and technological solutions purchased, the number of people in the user's organization using the solution. The way to monetize and obtain data collected from the end user will be cooperation with e-commerce platforms and "3-rd party apps". An additional source of income will be certifications for SaaS agencies and / or e-commerce confirming the activities / credibility of service expertise (benchmark - Google Partners) and "exclusive" programs (listing, exclusive solutions - specific applications).
The recipient will also be able to purchase consulting services around the framework.
Information architecture around the framework on the platform and the purchase of the membership package requires leaving the data in a designed form, giving the possibility to download implementation case studies and other premium materials (online training / testimonials). This will allow for the continuous development of tools and the project, as well as scaling the reach and monetization.




Strategy for winning the market

As part of indirect channels, the potential of contacts and expertise built by the creators of Sell a Service in other enterprises, including Socjomania (a consulting company present on the market for 10 years, with over 4500 clients in the database), of which Katarzyna Młynarczyk is a co-founder, will be used. The membership and accreditation of Sociomania (Sell a Service sister companies) by the global organization spreading knowledge about service design - Service Design Network (over 15k community reach in countries targeted by Sell a Service) will also be used.

Among the direct channels, we will use networks and incubators where owners of service businesses in Europe appear - especially in places with the highest penetration of services in e-commerce (Berlin, London, Barcelona, ​​Italy). For years, the project team has been building knowledge and educating organizations in building services - this knowledge will be used in the creation of video channels, podcasts and online advertising, giving the possibility of promoting Sell a Service at the same time. Cooperation with the current investor, who has the edu-tech specialization, is an additional leverage of contacts and development for the sales strategy.
Expected sales revenues in the first 3 years (in PLN thousand):

Consulting
1st year: 425
2nd year: 1.115
III year: 1.680

Subscriptions (Basic + Pro)
1st year: 150
2nd year: 1.520
III year: 2.380

Partnerships and affiliation, certifications
1st year: 50
2nd year: 340
3rd year: 565

Sale of a dedicated solution / financing
1st year: 0
2nd year: 150
3rd year: 350



Current stage of the project development

The project is currently at the TRL II level. All work related to the development of the concept and the achievement of TRL II was financed from own funds.
The concept of the Sell a Service solution was formulated. The concept was formed on the basis of many years of professional and scientific experience of the creators and the real market need arising in pandemic times related to the limited contact between the customer and the service provider. Sell ​​a Service is currently a limited liability company with a share structure: Fundusz Inwestycyjny 24.81% - the remaining shares are held by 3 shareholders, including 35% president and project leader Katarzyna Młynarczyk. Sell ​​a Service obtained financing in the amount of PLN 1 million from the BRidge Alfa fund for the implementation of the R&D direction. Work began in August 2022. The work includes research to complete and validate the concept with representatives of service businesses recruited for the project, and building and developing a network of contacts in 4 markets (Germany, UK, Spain, Italy). The result of the work will be a ready platform offering know-how (framework) for service businesses and being a space generating a constant flow of leads and 2 technological solutions - widgets developed in the form of a concept, offered in the form of a license to e-commerce platforms and applications and made available to customers in a subscription model. The team is built and operates according to a set plan. One of the main goals is to attract an investor bringing capital, knowledge and contacts to introduce more dynamics to the scaling area.



Traction

Sell ​​a Service has confirmed the first 10 customers on the account for the implementation of the project (solutions supporting the sale of services in e-commerce), including:
1. large businesses offering services (3),
2.business offering products in e-commerce (automotive, beauty, leasing) (3)
3.service businesses planning to enter e-commerce - digitization of services. (4)

They will constitute a proof of operation, and the results will be presented to the market on an ongoing basis in the form of case studies. The team employs 2 sales specialists who will build the outgoing strategy through community participation, meetings,
The project has 1 million investments from Bridge Alfa acquired this year and plans to carry out sales already during the research stages.
The research stages assume the inclusion of invited representatives of the 3 groups mentioned above to verify the assumptions and market challenge (the form of interviews, workshops, real data collection from operating online stores using tools such as Google Analytics, Hot Jar), ​​but also to co-create solutions, which is one of the sales tactics in the context of the final use of membership and the services offered by Sell a Service. The Sell a Service team has all the competences to carry out the process of hypothesis validation, collect and draw conclusions from market data, confirm the legitimacy of the course of action (support for service business in e-commerce) and involve real recipients in creating proposals for solutions available on the platform.


Roadmap

Plan for the 1st year of operation (in progress; detailed measures on request):

Stage I - Framework prototype and validation of the sales strategy (ms. 1-5)
Desk research
Customer journey process model
Framework architecture
Development of a framework prototype
Sales strategy in the first markets


Milestones:
I Database defining markets with the greatest potential and categories of service businesses
II A prototype of the strategic process described by measures
III Sales strategy validated with the first 10 clients

Stage II - Sell a Service platform (ms. 6-12)
Development of a prototype of the platform along with the implementation of the framework
Prototype of 2 widgets to be implemented
Testing in real conditions
Milestones:
I A fully functional prototype of the platform
II. Implementation of the solution in the selected organization X achieving better performance compared to the original measures according to the measures
III. Organization X's satisfaction with the application of the solution (point scale)

Sales: consulting first (audits of online stores, market gaps in the context of services in a given industry, team and competences, e-commerce market potential for a given service category - here the first 10 customers agreed to take action), and from the 7th month also subscriptions. From the 10th month - sales of partnerships and affiliations, and from the 19th month - building a sales network. The company will start generating positive cash flow in the second year of operation. Sales in the second year will increase by 331% in relation to the first, and in the third by 59% in relation to the second (dynamic increase in sales in the second year due to the launch of new products and services).



Competition

Competition analysis:
Strategic solutions:
So far, no solutions identical to the proposed one have been developed. There are only solutions for implementing broadly understood strategic activities on the Internet. Main Platform: Smart Insights (Marketing Optimization) provides templates and tools for download and model membership. The platform works successfully, with regular subscribers and several dozen cooperating companies.
Technological solutions:
There are 14 technological solutions (woocommerce platform solutions, shopify, shoper, happyaddons organizations, elfsight, helponclick) in a similar structure, among them websites offering ready-made technological solutions (widgets, pop-ups, tools) such as Squarespace. Current solutions are tailored to the product business; no personalization for services and no strategic support. Squarespace Outlook: Total Revenues 2021: $ 784.0 million (26% YOY). Subscriptions: $ 4.1 million (up 12% YOY). Realized net loss: $ 249.1 million. EBITDA: USD 125.1 million (increase by 7% YOY). Cash flow from operating activities: $ 123.2 million.
Competition (and also an opportunity for partnership) are also e-commerce platforms on the basis of which online stores are created - both retail and service. The solutions they offer are focused mainly on the product business, creating a gap for the service business and the possibility of commercialization.


Team

Katarzyna Młynarczyk
Project leader and originator. Co-founder of organizations created in the service design methodology (Socjomania - consulting - acting as the president from 2012 to 2020; Handelek; Rebread). Accredited by the Service Design Network. He holds an MBA Service Innovation and Design (Laurea, Helsinki). President of the Service Design Poland Association. Lecturer in Trendwatching and Future Studies in the field of service design. A recognized speaker at Polish and foreign conferences.

Dr Marcin Chłodnicki
R&D team manager. The first recognized specialist in the field of service design in Poland. Lecturer at Collegium Da Vinci and the University of Economics in Poznań, member of the European Academy of Marketing. Creator of the service design methodology for the Institute of Industrial Design. The author of the first book about designing services in Poland, "Service Design po polsku. How to attract, satisfy and retain customers ”.

Cezary Kuik
IT team manager. Certified IREB Requirements Engineer, holding the ITIL certificate in the field of digital product and service management. He has implemented dozens of automation projects (chatbot, voicebot, rules-engines) for clients from the banking, e-commerce, electronics, FMCG, media and GOV sectors.

The remaining members of the project have competences in strategy, marketing, implementation of services (including for Continental, SIXT, Orange, PKO Bank Polski, Motorola Solutions, JLL) and experience in managing their own projects / service organizations.



Investment

The size of the investment suggested at the moment is from PLN 2-4 million. This is the budget that we plan to allocate for the implementation of further technological elements (widgets developed as further elements to support the customer service journey with already pre-verified potential - including at the stage of using the service - a subscription order tool, ready-made forms and notification solutions, building a relationship with customers). The investment will be spent on refining solutions (prototypes) and their development along with investment in building a scale and sales network.
In the context of the number of shares, our company will start talks and negotiations. We allow the possibility of investing on our part in a larger number of shares for a potential investor if he has the opportunity to bring capital in the form of knowledge and contacts - triggers that will allow the Sell a Service business to develop on new markets. Our need is support in capital management and scaling strategy for international markets in the area of ​​service e-commerce, and extensive experience in the service industry and / or e-commerce / IT / or in the area of ​​scaling by selling know-how / open-source solutions and access to partners - employees with a profile similar to the company's activity.


Budget

The company started operating in June 2022, incurring initial capital expenditure covered largely from the acquired BRidge Alfa investment, of which 790,000 PLN will be allocated to salaries, 70 thousand. PLN will be administrative costs, and 80 thousand. selling costs. The remaining costs are external services, which in the first 12 months of operation will amount to PLN 208 thousand. zloty. The costs, which in total will amount to PLN 1,144 thousand. PLN, will be partially covered from sales revenues that the company will generate from the first month of operation. The sale will primarily concern consulting, and from the 7th month also subscriptions offered in the basic and pro versions.
From the 10th month, sales of partnerships and affiliations will start, and in the 19th month, the construction of the sales network (sale of a dedicated solution) will begin. In this regard, another investment of 2-4 million is needed to develop technological solutions and scaling sales, thanks to which income streams from other categories will develop. Return on investment for the investor in this area is assumed at a minimum of 12-15%.


In the third year of operation, the sales structure will be as follows:
Consulting: 34%
Subscriptions: 48%
Affiliations, certifications: 11%
Sales of a dedicated solution / financing: 7%

Sales revenues:
Year I: 725,000.00
Year II: 3,125,000.00
Year III: 4,975,000.00

Operating expenses:
Year I: 1,144,250.00
Year II: 2,095,900.00
Year III: 1,998,000.00

EBIT / gross profit:
Year I: -419,250.00
Year II: 1,029,100.00
Year III: 2,977,000.00

Net profit:
Year I: -419,250.00
Year II: 833,571.00
Year III: 2,411,370.00

(Amounts in PLN)



Needs

Our needs revolve around the most important points:

1. Networking - Germany, UK, Spain, Italy - is the main area for the first 3 years. The network of contacts concerns the e-commerce environment and service businesses (different stakeholders from owners through creators, implementers through recipients - customers).
2. Building the credibility and visibility of Sell a Service on the Polish and foreign market - enabling exposure to the most important industry events, participation in industry reports, media activities
3. Support in acquiring shareholders, business angels whose investment goals result from the interest in the sector we are developing.
4. Assistance in identifying market potential in other markets (apart from defined and partially researched), assistance in finding the right partners for the project
5. Support at the project management level - optimization of finances, support in managing capital, team and investment decisions




The above information is provided in abbreviated form, and our detailed description of the project, Pitch Deck presentations, as well as a detailed financial and P&L analysis are available on request.