We have some great news hot off the press! Our PopShop Local program has had a blockbuster month with leads increasing sharply and a very good cost-per-lead that will help us continue to grow our local program.
For those that don’t want to read the whole update, the headlines are: 1) our paid campaigns have led to a ~400% increase in PopShop Local leads; and 2) we currently have $606,000 in Annual Recurring Revenue (ARR) from qualified leads in our Local deal pipeline.
Let’s hop into the full update!
PopShop Local: A Refresher
As a reminder, the PopShop Local program will see dozens of our newly manufactured machines sent across the country to top placements (venues, hotels, event centers, etc) which will feature the best brands from the local area.
The Local program will allow us to extract a much higher ARPM (Average Revenue Per Machine) because each machine will feature multiple brands, all of which are paying $500+ per month to house their products in our machines. Each brand will receive exceptionally detailed data on their brands performance and the customer metrics we promise all of our operators. This is just one example of the freedoms that our advanced platform affords our company. (And our customers!)
One of the linchpins of this new sales strategy was the ability to get interest from small businesses for the machines. Thanks to our large press footprint and expansive network of investors, we were able to get a great head start on getting the word out about the program. However, we needed a sustained and trackable source for leads. Thus, we kicked off paid marketing qualified lead (MQL) campaigns on Facebook, Instagram, and LinkedIn. The results are in: and we’re very happy with the outcome.
Our MQL campaigns kicked off in Apr 2021 and in the first month we were able to increase our monthly deals by about 400%. May has already surpassed April for the number of leads despite still having almost two weeks left in the month. We’re anticipating May will end with over 100 new deals, meaning we’ll have increased our pre-MQL-campaign monthly leads by 500%.
One of the main campaign KPIs we are tracking is Cost Per Lead (CPL). Traditionally our company has not spent money on MQL campaigns because we had enough organic leads via enterprise deals, accelerator programs, and our press footprint. With the introduction of the paid campaigns, it is critical for us to track how much each lead is costing us. We’re pleased to share that our CPL is currently at $28 across our campaigns. Here’s how that looks in terms of “startup metrics”:
Local Program CPL: $28
Lead Conversion Rate: 10%
= True PopShop Local Cost Per Acquisition (CAC): $280
Minimum Local Lifetime Value (LTV) at $500/month and 1 Year License: $6,000
= Paid Outreach Return on Ad Spend (ROAS): 21.42
In summary, we are getting about 21X return on the paid campaigns we are currently running taking into account the minimum LTV of each PopShop Local brand (license terms are annual hence the $6,000 minimum LTV) .
Sales Qualified Leads (SQLs) are leads that our sales team have deemed “qualified” and brought into our PopShop Local deal pipeline. The Annual Recurring Revenue (ARR) opportunity for this pipeline currently stands at: $606,000.
These are great results and it means there’s a lot of interest in the local program. Next up for our marketing and sales team is to build out geographic and commercial personas of our converting Local customers to build targetable audiences that are “high intent” and “highly qualified” so that we can increase our Lead Conversion Rate, introduce repeatable onboarding processes, and scale this program to 250 placements around the US. This would net us roughly $6,000,000 per year in SaaS fees with 4 brands per machine. With marginal improvement in the above metrics, we see a path to get there.
Thanks for reading – hopefully you made it through the many acronyms that our marketing and sales team speak! The headline is the Local program is now graduating from an experimental sales program to a cornerstone growth strategy that takes into account (and indeed magnifies) our company’s unique juxtaposition of hardware and software.