In this article, award winning storage company LOVESPACE discuss how cohort analysis, customer journey mapping and product road mapping are invaluable tools for scaling a 5* service.
Every year at LOVESPACE we collect hundreds of thousands of boxes from thousands of customers nationwide. We want to be the first choice for people and businesses needing help looking after their things. LOVESPACE is currently doubling in size year on year and with this comes the challenge of simultaneously maintaining the quality of our service whilst delivering improved marginal economics as we scale.
We approach the challenge of scaling in three main ways. First, we understand the relative value of different customers through cohort analysis. Secondly, once we have identified our main target segments we understand their needs in detail via customer journey mapping and thirdly we ensure we have an underlying product roadmap that allows us to deliver a scalable operation to meet the needs of these customers.
We have been analysing cohort economics for some time. The discipline is well understood in the SAAS environment (see this excellent series of articles by Joe Knowles) but is also relevant to subscription businesses like ours. We now have the ability to track customer acquisition costs versus life-time value for each of our core segments (SMEs, Students, Movers and Declutterers). The insights from this work are critical in driving investment, pricing and product development decisions; and drive much more clinical interventions than merely looking at segment P&L as a whole. We look to “engineer” value from each of our segments by, for instance, differentiating our prices depending on whether a customer is booking at the last minute or in advance, or whether the location we return their boxes to is the same city or a completely different one.
Customer Journey mapping is the tool we’ve used to identify pain points and opportunities to improve our service in a way that matches customer needs and expectations. We take the data we collect from customers after they’ve used the service, and map their experience and interactions at each of the stages in our service. By doing so it becomes clear where in the service we can make changes to improve customer experience. For example, as a result of this process we made significant changes to our onboarding emails and welcome pack, to improve the rate of customers that are ready for their collections and deliveries.
Once we have understood the needs of our customers in some detail we ensure that our product roadmap will deliver against those needs as we grow. At LOVESPACE we’ve invested in developing our own technology, which allows us to manage all our warehouses, drivers and customers in real time, whilst integrating with partner warehouses, drivers and materials suppliers. Our warehouse and driver management app allows us to keep costs down through automation and is the key to our ability to scale. It means we’re able to set up new sites across the country within a few days and we aim to replicate this when we expand internationally. And with the upcoming launch of our consumer app we will be able to provide customers with an enhanced experience by allowing them to track their driver and manage their orders straight from their phone.
We’re always happy to talk about cohort analysis, customer journey mapping, and building technology that delivers a five-star service, so please do feel free to get in touch. But if what you’re looking for is a better way to manage your belongings, where you can get them collected and delivered anywhere in the country, with storage in between, then look no further. LOVESPACE.