REPORT PREPARED FOR: BY XIU QIN LIU, GUANG HUI DUAN, XIN LI, MOHINI MARIA,

Transcription

1 REPORT PREPARED FOR: BY XIU QIN LIU, GUANG HUI DUAN, XIN LI, MOHINI MARIA, POSTGRADUATE DIPLOMA IN BUSINESS APMG 8119: DIGITAL ENTERPRISE 2017

2 Background of Pushpay Found in 2011 Listed on NSX & ASX High-tech firm Provide third party payment/engagement/community solutions Easy, Fast, Simple: in 10 seconds Markets: Faith sector, schools, charities, S&M enterprises Functional features: Cash and Check Recording, Autopay, Text Giving (enable donors to pay via text message link), Annual Giving Statements, Echurch Apps

3 Background of Pushpay 2017 Performance Highlights key metric FY 2017 (US$) FY 2016 (US$) Change Increase in Annualised Committed $30.9m $15.6m +97.9% Monthly Revenue (ACMR) over the year ACMR $50.5m $19.6m % Total Customers 6,737 3, % Average Revenue Per Customer $625/M $434/M +44.1% (ARPC) Staff Headcount % Published App rank in the Apple % App Store worldwide Transactions processed over the 6.1m 1.9m % year Annualised Monthly Payment Transaction Volume $1.8b $0.6b %

4 Market Position The Pushpay Market Position in the US Faith Sector Market Size TOP 20 largest Top 100 largest Pushpay Customers 10 42

5 Future Plan Short term plan - the company focuses on increasing its markets share in the US faith sector in width and depth. Long term - the company is to develop and grow market shares in three additional target areas, together with churches. The customer numbers are displayed in the table, with a total market potential of $5.5 billion. Market Market size Churches Public schools Private schools Not-For Profit >340k >98k >3k >1.6 million

6 Revenue Analysis Revenue Creation 1. Subscription Fee 2. Processing Fee 3. Grant from government 4. Interest Individual users payment through Pushpay. Pushpay also provides engagement solutions for organizations for online community establish. Pushpay transact the money to churches, schools, charities and S&M companies.

7 Revenue Analysis Why is this revenue created? Pushpay delivers business value through their services which meets customer needs initiated by e-commerce and mobile device development. Communication with Online APPs is replacing physical interactions. 70% New Zealanders own a smartphone by 2015 Higher demand on convenience and simplification of nearly all aspects of daily life.

8 Revenue Analysis Revenue estimation Annual Committed Monthly Revenue 2017 June 2018 March (In Million US dollar) Key drivers for revenue growth: Monthly payment increasing due to cohort growth with the enlarged customer size. Customer number growth based on the optimistic market potential, in terms of the huge amount of churches, schools and Not-For-Profit organizations. New market development in faith sector.

9 Revenue Analysis Risk and Opportunities Major risks of revenue component Major opportunities of revenue component Trust and satisfaction are the core of an online transaction platform like Pushpay, which is highly related to customer experience when using APP or website. External risks: substitute product would emerge along with the widespread utilization of social media. (WeChat as an example) Internal risks: system stability and optimization. Further revenue opportunities of Pushpay is generated by its competitive advantages as follows. Completeness of solutions providing with both payment and engagement. Mature network and recourses within the industry, such as social network with top churches. Cooperation with other companies by customer resource sharing to enlarge Pushpay market share.

10 Cost Component Analysis Transactional fee and payment to third party Online process cost Third party direct cost Product development and maintenance cost Technology platform maintenance Online process costs External advertising cost, promotional events, brand building and corporate communications. Offline Process cost Sales and marketing cost General and other administration cost Professional service fees, occupancy costs, stock exchange listing expenses. Offline process cost.

11 Estimated Total Cost Costs 2017(US$000) 2016(US$000) Change Third party direct cost Product Development and Maintenance cost Sales and Marketing cost General and other Administrative cost % % % % Total Cost

12 Cost Analysis- Risk and Opportunities Risk Opportunity Processing cost are expected to increase in the near future. The fast changing development in technology may lead to higher technology investment. Focus on reducing third party direct cost by forming good ties with financial institutions. Reducing client success fees by focusing on cloud-based solutions. Increasing R&D efficiency by obtaining grant and social sharing. The strategic alliance with intuitthe accounting software firm.

13 Value Propositions Simplicity Mobile Community Enhancement Transparency through engagement Value Propositions Efficiency Security Empower -ment

14 The Value Creation Process Church School Charity Engagement Participation Social Community Pushpay Engagement 3rd Party Developer S&M Companies Payment Donor/Payer Payment Payment

15 The Pushpay Business Model Status Content Products info for church, charity and school are very brief Details and demo has to be requested by customers Customer Experience Simple and efficient payment solutions through mobile app., web and text. Provides engagement and community tools for churches, donors, and among them. Platform Datacenter-hosted platforms to support payments through mobile, text, website & 3 rd party APIs. But valid only in USA, AU, NZ and CA Debit card, and credit card of VISA, MasterCard, American Express and Discover only.

16 An External Perspective Dimensions Church School Charity S&M Businesses Note Loyalty High High Low Low Extent of shared interest Size Small High Medium High Group size Wealth High Medium Low Medium-Low Purchasing power Competition Low High Low High Competing offerings Revenue Model Business Model Bias Note Church School Charity S&M Businesses Pay Volume-based Mixed of Free Free& Pay + Pay Volume-based Pay Pay to Small Unite Access fee Access Advertising Fee and/or Small Access Fee

17 An Internal Perspective Value Proposition Indicators Pay Free Mix Compelling Content Coverage Distribution control Choice Context Convenience Connectivity Community Comment Customization Conversation Collaboration Citizenship Customer experience Application Consumer review and compensation Source: KPMG,2009

18 The Business Model Matrix Church Revenue Model Bias Pay Supportive Initiatives Churches Pay Strengthen distribution control for client commitment Schools Volumebased pay Strengthen distribution control for client commitment Free Supportive Initiatives Create features of community, connectivity and collaboration between schools; expose school products online for easier identification Mix Supportive Initiatives School School Enhance customer review and compensation Charities Mixed of free+pay Strengthen client control, as well as more functional applications Create features of community, connectivity and collaboration between Charities. Enhance customer review and compensation S&M Enterprises Charity Free& Volumebased Pay Create features of community, connectivity, collaboration between schools; increase products exposure, as well as product citizenship impacts for clients Enhance customer review and compensation Launch distinctive features and more functionality. S&M

19 Theoretical and Managerial Implications Theoretical implications Managerial implications The model(platform, customer experience and content) must be coupled with understandings of customer needs and industrial analysis first. The 20c value proposition theory more appropriate for ender user market, less for business-to-business software providers: connectivity, engagement, community Continuous product development for leading functionality and system compatibility to cope with risks (platform stability, increasing social media functions). To reduce costs, good ties with financial institutions, strategic alliance, obtaining grants and social sharing R&D, support via Cloud-based solutions Prioritize initiatives by the revenue model bias. Church market is appropriate for pay model, charities and school for less-pay model and S&M for free to volume-

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