Creating the Customer Factory helps us answer some valuable questions:
- Where you lose customers?
- How good are you in maintaining our current customers?
- What is your engine for growth?
We were not too happy with our growth performance. The Customer Factory taught us what we could improve. It helped us tremendously forward. We could improve our understanding of our customer behavior. Enabling us to create a customer strategy and create better metrics. Where we struggled for months we could take super steps in a matter of days.
Customer factory than the sales funnel
Why we think the Customer Factory is more useful than the AARRR- funnel:
- It’s more graphical, making a complex sales process simple
- It’s non-linear model unlike the sales funnel. Helping to better match customer behavior.
- The Customer Factory helps craft and focus on Key Metrics better
By creating our customer factory in a matter of hours we started to understand our growth performance.
More important it helped us correct and determine our strategy for growth.
Our strategy changing insight
We learned we could not be wrong more…
|Customers are very loyal (retention 90%)
Referral is small 8%
Acquisition is small (2%)
Churn is unknown
|Retention is 64%
Referral is unknown
both are 36%
Creating the Customer Factory learned us the following:
- Our churn was much higher than we expected. We have loads of customer leaving us after one or two orders. This insight told us to improve our customer value and re-thing our value proposition.
- Our acquisition saved us. We are (still) able to compensate the churn by attracting new customers. Reducing our promotion would have a much bigger impact then we expected.
- We see ‘word-to-mouth’ referral as our most important marketing strength. Yet we have no clue how to measure it.
- We were now able to build a ‘Key metrics table’. Helping us to better specify the action, metric and customer state.
- Our cohort analysis showed us that one group of customer are much more loyal then others. This told us to zoom in further to understand the reason why.
Our learnings from the Customer Factory model
The Customer Factory looks very simple but we had to take some steps back to find our key metrics.
It helped to create the customer journey. See the customer Journey as actions your customer takes from first learning about you (awareness) through the purchase, referral and return.
Defining these actions helped to determine ‘what’ to measure. Some digging was needed to find the available data.
This effort resulted in our improved ‘key metrics’. We went for the ‘quick & dirty”, ‘fast & manual’. Expecting the metrics to change while we gained new insights.
Collecting and analyzing the data took considerable effort. We discussed the data and meaning with different disciplines. Helping us to validate the conclusions.
To avoid this to be a one off actions we embedded the regular reporting and reviewing of the metrics. Sounds logical but if not done the whole action would be pointless.
Want to see how we did it?
We created a separate blogpost showing:
- The steps we took
- The result in one smart table.
- A link to some slides we used to explain it to others.
Note: the link will be added soon (after the ‘how to’-post is finished) (-:
Understand how we did it. follow this link…..
More reading about the Customer Factory Blueprint:
Have fun creating your Customer Factory!