Talking to Vladislav Vernigora, founder of the CheckScan Offline CPA.
ChekScan: Team, History, Processes
The technical team of CheckScan is based in Kazan, the business unit is in Moscow. Most of the employees are working remotely. This is the way the process was organized from the start, so it wasn’t a big change in current circumstances.
For users, CheckScan is a convenient application to scan receipts, receive cashback and bonuses, and track expenses.
For our clients and potential customers, this is a database with detailed information about users: what they buy, where, when they go to the store, and so on. This data allows you to improve your targeting and to influence consumer behavior.
Coming Up with the Idea
I was visiting my parents and saw my mother examining the receipt scrupulously every time after going to the store. The usual buyer experience is to check whether the correct products were purchased, at what price, and whether they got the discount. These are the things many people do.
My observations coincided with the reform of cashier system: now, QR codes were printed on the checks, making it possible to receive electronic information. It became clear the project needed to see the light as quickly as possible before competitors appeared.
We conducted a corridor study to determine how many people look at their checks, what they are looking at, and why. It turned out this was important for many buyers even regardless of benefits and money. This wass an established user habit, and we decided to digitize it.
The users of CheckScan are a fairly wide range of people: men and women, adults and youngsters. At first, there were more men: according to statistics, they download applications more often. But with the gradual increase in the number of users, the app showed an incline towards female audience. This might be explained by the fact that women are more likely to go shopping, and buying groceries is most often their responsibility in the family.
Processing User Data
The issue of processing personal data has been worked out from a legal point of view. Our users sign an agreement, giving their consent to the use of their personal data. In return, they get cashback for certain purchases.
What Exactly CheckScan Does
CheckScan collects information about the user, processes it, and transfers to our customer. As a result, the manufacturer can interact with end-users, stimulating the demand for its products.
A typical supply chain looks like this: a manufacturer supplies a product to a distributor who delivers it to chain stores. The store sells the product to the end customer. The interaction between the end consumer and the manufacturer is very mediated and one-sided: advertising on TV, promotions, in-store discounts. The tools for involving the user in a two-way process (interactions, giveaways, etc.) are significantly limited.
CheckScan is a tool that assists direct interaction with customers. For example, we can organize a promotion campaign and reward a user for purchasing a certain brand. At the same time, we are giving the same brand a channel of communication with the consumer, leading the user to the brand’s landing page.
The Financial Aspect of Implementation
To launch any project, it is important to find an unoccupied niche and recruit the maximum number of users at the start. Based on some data, a company then comes up with different mechanisms in order to estimate the unit economy, including user monetization. That’s where the cost of attracting a user comes into play. To calculate this important factor, you need to launch something. But unit economics is not perfect, and the calculation for a non-existent product will be very rough.
For now, CheckScan’s unit economy shows positive dynamic. It has always been this way. But there isn’t much of a difference between our profit and the cost of user acquisition. At first, we used referral programs to attract buyers: say, a person scans a check and receives cashback. If they invite a friend, they would receive another bonus. This almost-free way of promotion attracted 200–300 thousand users in 4 months.
Over time, the market landscape has changed, and new applications have appeared. Now we need to advance faster and hold our position, so we cannot only rely on free promotion anymore.
Problems on the Stage of Project Implementation
The main issue that we’re still working on is monetization. Users often perceive the application as a resource for saving receipts and earning some extra cash. We have to make money to pay for this request. Our income is generated by manufacturers and retailers, so it’s necessary for us to build strong relationships with them. However, we have disproportionately more users than B2B customers.
Another technical problem that we ran into at the first stage is the number of servers and exhaustion of database connections (connections for exchanging information with database). It’s one thing when the number of requests is about 10 per minute, but it’s completely different when there are 10 requests per second.
You have to change a lot on the go, and it’s not easy. During first stages of development, we were tracking the charts manually. Setting up the automated process was quite expensive, and you don’t always have enough resources for that.
CheckScan: “Before” and “After” the Startup Studio
Before joining the startup studio, we were very restricted. We tried to save on everything, refusing to test many hypotheses and opportunities that could be of great potential.
Since then, we started testing a lot. But we have not yet gotten rid of the impulse to save up as best as we can. On the other hand, we finally were inspired to try out more things, to change our format, and to highlight vectors of redirection of main resources. We have reinforced our team, financial capabilities, expertise, and other operational things.
Further Project Plans
ChekScan processes up to 100,000 checks a day. At the same time, the number of checks that motivate users to make certain purchases is quite low: less than 1%. This is the state of affairs for the market as a whole.
We want to change it, offering options that will help users get great deals. To do this, the advertiser must connect to an Offline CPA, which aggregates offers from manufacturers, retail chains, and individual stores. This is what we are striving for — the future of CheckScan and Offline CPA.
The main goal is to build a working business that would benefit people, our partners, and advertisers.