… and determine a Growth Strategy.
First define a Sales Funnel and Key Metrics.
Great, we learned our lesson. We need to build Key Metrics for growth, embed measuring and focus on our strategy. This post will tackle:
- How we created of Key Metrics using the Customer Factory
- How we created our Growth Strategy choosing from Sticky, Viral of Paid growth.
After reading this we hope that you can create your own Key Metrics for Growth yourself. We are in process of learning how to embed both in our daily work. So we will return to this topic when have some lessons learned for you.
Create Key Metrics from the Customer Factory
From creating our Customer Factory, we learning that:
- we missed out on Churn;
- are in the dark for Referrals and
- have less customers returning on a regular basis then we expected (Retention)
Key question for now: Do we focus on Paid, Sticky or Viral Growth?
See this post from Eric Ries on growth strategy.
To get some answers we translated the Customer Factory to the Sales Funnel. We looking at the emotional-state the customer is in. In the different sales steps his needs and wants changes. It shifts from Aware & Intrigued to Trusting, Hopeful, Satisfied and Passionate (if all goes well of course). Understanding the emotion helps you to define your sales process.
Finally ‘what action’ does he takes to go to the next funnelstep? Defining these step helped us to determine the measure. This lead us to our Key Metrics.
The following format was useful for us:
For the Wine-case this resulted in the below overview:
Key Metrics for growth we promised…. This is were we focused on?
This really helped us understand what to measure and as you understand finding and collection the date for the first time took some effort, but is still did not bring any focus. It was quite the opposite, what was the measure to focus on and what action would be best?
Where the the Book the Lean Entrepreneur helped. Bottom line is that you have to make sure you understand what drives your passionate customers and get that group to trust your product.
As being your most passionate customers they most likely will refer and recommend you. This approach is more effective than attracting everybody and force them through your sales funnel.
So we should start at the left side of our Sales Funnel and get a very clear understanding of that features that make our customers so super happy. In all honesty. That’s a tough task to perform. At this stage we really don’t have a clue.
So it’s all about understanding the current customers better. The following picture from the same book helped as well.
No Growth Engine without an MVP.
We needed to rethink our product offered, understand our customers better. We should be able to pinpoint just that specific feature that makes them passionate.
If we plot our priorities back to the Customer Factory it is clear we should focus on the sticky growth.
The result we want with sticky growth is reducing the churning customers.
This translates into the following actions:
- Go talk to the ‘2x skipped customers’. We expect to have lost them so much harm can’t be done by talking to them. Knowing where the misfit was helps us reducing future churn.
- The recurring customers can help us understand what makes them passionate about what we do.
- Finally with this inside we should experiment with ‘different win back’ actions. Tailor offerings for specific group to learn what is most effective. This helps us improve our MVP and/or segment our customers better.
The segments found in the Customer Factory helps us to know who to talk to. To collect the information we will be using customer/problem interviews and solutions interviews.
We expect to end up with severals MVP versions where cohort analysis will help us track the result.
Next step: Build customer interview and iterate….