Is this going to work?
This is “the” question that makes entrepreneurs and business owners anxious. And if your business idea is innovative or hasn’t been tested before, indeed, you have the right to feel the pressure.
Because there are many ways to find out the answer. You can invest years, thousands of dollars, and tears (and tons of weight on your shoulders), or you can play smarter and remove the risks. In this case study, we’ll show you how we removed the risks for live light and tested a new business idea by eliminating the uncertainties from the process. Then we’ll show you how we built the brand and implemented growth strategies after the validation phase.
Phase one – Market validation: will be all about higher level strategic plays we implemented to validate the business idea.
Phase two – Launch and growth: will be mixed bag strategies and tactics that we used to build and grow live light.
The challenge of live light
The business concept of live light is a game-changer. They rent design furniture for affordable prices for consumers, as well as businesses. And the main intention here is to -yes, you guessed it- reduce the excessive amount of furniture waste.
We knew the concept was tested in the U.S., we had already seen multiple startups, scale-ups raised millions of dollars. There is a market in certain countries and cities for sure. But the question is:
Is there a market for live light in Europe?
To find the answer, we needed more than competitor analysis and guesswork. If live light wanted to find the answer by themselves, they could have spent hours in boardrooms, brainstorming about the potential approach. But we’ve approached this riddle differently, and as a result, we have validated the idea in a month. For a laughable budget.
Let’s zoom in to Phase 1.
PHASE ONE- MARKET VALIDATION: BUILDING THE SHADOW BRAND TO TEST THE WATERS.
Rather than investing in big budgets for developing materials such as:
- Brand identity
- Website
- Logo
- Advertisements
We built a shadow brand and set up all the essential requirements to create a fully functional Shopify website. This quick and dirty solution (although it didn’t look cheap), was our gateway to all necessary experiments we’ll test out soon.
In less than two weeks, we had a functioning prototype of our website. Prospects were able to follow the buyer's journey until they pressed the “add the cart” button. And this was all we needed to understand whether there was a demand.
Furthermore, to understand if there is a market in Europe, we needed to answer some key questions such as:
- What is the CTR (Click Through Rate) in different countries?
- What is the add to cart rate in different countries?
- And what is the CPL (Cost Per Lead) in each country?
Here is how our validation funnel looked like:
As you see, we didn’t only aim for quantitative data that will come from Facebook ads. Furthermore, we wanted to capture the leads, invite them to a survey, and generate qualitative evidence for live light's main launch.
But there is more. To find the ideal audience and A/B test with Facebook ads, we came up with three customer avatars.
Since the product has many benefits and characteristics, we also came up with three different hooks to modify our advertisement texts and visuals.
You see, there are more than ten variables, so we ran dozens of Facebook ads and implemented A/B tests to find the most effective combination of all.
At the end of all our experiments, we had enough evidence to draw concrete conclusions and prepare live light for the next steps. Let’s have a look at the data we’ve gathered at the end of this 1-month sprint.
- Geographic data
The business idea was already working in the U.S. But we tested the ads for both the U.S and EU to understand which could potentially bring more reliability and revenue for live light.
Aaaaand, the winner was Europe:
Of course, we went deeper to determine which countries were the best candidates. The results indicated that Belgium and Spain sheltered the most potential for live light. Ok, so far, we know where we want to do business. But who is the audience?
- Psychographic / Demographic data
What triggers people and what kind of personalities are interested in buying from live light? To measure attitudes, values, and other lifestyle factors, we A/B tested almost 27 different styles of ads. And we observed how people reacted to different messages.
Here is the click and add to cart rates we’ve seen for different personas and hooks.
Based on these tangible findings, we knew what type of messaging and communication we should use in the actual launch: affordable design. By looking at this outcome, we’ve also found the value proposition of live light. Besides the psychographic deduction, we zoomed into demographics and examined our target audience's age and gender.
By that time, we knew all the things we needed and the best part: we had evidence to back the hypotheses we’ll create in the next steps. But we went the extra mile. Remember the survey we hooked at the end of the customer journey?
- Qualitative data
We have enough quantitative data to determine the next steps. But before we start, we wanted to see what people were thinking about the idea. So we prepared a survey to collect some opinions from our very first leads. After they shared their details, we sent them a kickback email and asked them to join our survey.
As a result of our survey, we saw these four points repeatedly. So this time we were 100% sure that we’ve validated there is a demand and people put affordability first and the design aspect second. We even have an idea about how many years people wanted to use the service before the launch.
Let’s discuss what could have happened without GrowForce.
- live light founders could have waited for a year to reflect on the business idea and move forward.
- They could have paid for expensive market research that represents half of the truth.
- They could have invested at least 6 months and thousands of dollars to a team of website developers, copywriters, ad experts, email marketers, and analysts to launch their business.
- They could have launched blindly, without knowing anything, and could end up throwing their money straight into the bin.
Instead
We’ve done all the things you’ve seen above in a month. Without having to invest a lot of money. And as a result, we’ve:
- Created and managed all the shadow branding and testing processes.
- Validated the business idea.
- Decided on where and how to launch the business.
- Determined the target audience.
- Came up with a data-backed value proposition.
- Eliminated what won’t work. So they won’t lose time and money when they decide to fully invest.
As a result, live light founders decided to launch their business idea with zero anxiety nor did they have to ask questions like is it going to work? Is there a market? Who is our target audience? What kind of value should we offer?
If you liked what you’ve seen and want a lean and data-driven process for your new venture or established business. You can schedule a call with Amaury, he was and still is the person who is in charge of the live light campaign.
Now, let’s move on to Phase Two.
PHASE TWO – BRAND LAUNCH STRATEGY: BUSINESS MODEL, MVP AND EXPERIMENTATION.
The most common pitfall among businesses: they get stuck on things. Those things could be anything from pricing to landing page text.
Here is our antidote mentality: done is better than perfect. Because inaction in business isn’t motionless, it is devouring your time, money, and energy. Therefore, we constantly coached and advised live light to do and go forward. Below, you’ll see how we help live light grow lean and show them how not to get stuck on scaling issues.
Here is the list of things we have to put together to get live light “market-ready” and eventually, scale it up. We were a strategic advisor on pricing, business model, and operations. Furthermore, on a tactical level, we also helped them generate traffic and customers with bi-weekly Growth Sprints.
P.S. we’ll define “Growth Sprints” in the next paragraphs.
- Business Model
- Can we handle the cash-flow pressure?
- How much can we spend on a new consumer?
- As of when will the project be profitable?
- How much do we charge for delivery?
To find answers to these questions, we dived deep into competitor analysis. And our previous learnings from the last phase have also helped us to encounter some of the problems.
Now the graphics below might seem unsexy, but it’s the essential groundwork every new venture has to do. It would be a shame if you won’t benefit from your competitors’ and industry’s past experiences.
We compared each product and tried to find the sweet pricing spot for live light.
Then we worked on buyback periods to understand the lifetime value of a customer. This groundwork was an eye-opener for our future campaigns. By anchoring live light’s business and pricing policy on these facts, we were able to set concrete hypotheses and goals for its future without worrying whether we’ve done the right thing.
2. Minimum Viable Product
- Add an operational checkout to the website
- Setup a simple ‘back office’ process > what happens when we receive an order?
- Branding workshop: LiveLight v2.0
As you remember, in phase one, we have already created the “volume 0” branding and website. Thanks to that shadow brand, we had many insights about our potential customers.
Based on the insights, we’ve re-interpret and re-thought every element on the website from top to toe. We ensured that branding, design, value proposition, product pages, storytelling, and landing page elements are aligned with phase one findings. And of course, we added a fool-proof check-out process to run operations smoothly.
At this point, we had everything: business model, operations, branding, and website. live light was ready for debut and growth. It was time to run some growth sprints.
If you need advice on your business model or building your MVP, you’re welcome to have a free one on one call with Amaury. We would love to help you grow your business.
3. Growth Marketing backlog of experiments for launch
- Social Media advertisements: improve creatives & targeting
- Communication / Nurture flows
- Implementation of growth ideas.
- Website essentials: pop-ups, chatbots, exit-intents, and analytics set up.
Here is how we work with our customers by running what we call “Growth Sprints”.
In short, we’re doing a bunch of exercises such as Growth Marketing Canvas and Deal Breakers -you can check them by clicking the links-(For more information about these canvases, check out our free growth marketing course). Preferably with our partners. Then based on the insights we gathered, we come up with dozens of growth experiments. These experiments are campaigns that we can test in a very short amount of time, say one or two weeks.
This is the core idea of growth marketing. We find which ideas are worth investing in through rapid experimentation and iteration. And we have only one rule, we don’t execute ideas that we can’t measure. Data is our enabler, which helps us understand what is working and how we can make it work better.
But in this case, we already knew live light very well and had dozens of ideas in the backlog, waiting for the experimentation phase.
First experiment – Facebook growth strategy: improved structure, creatives, and targeting for Facebook Ads.
From phase one, we knew live light could get traction on Facebook. Therefore, we structured a new FB marketing strategy with the level method. We’ll explain it to you briefly but you can read the detailed version by following the link.
There are four levels because every prospect is in a different stage in their unique journey. With this method, we provide the right offer to our prospects by creating different targeting, ad creatives, and content for each level.
Here is an example:
Level 0 = People have never interacted with live light = catch their attention
Level 1 = People have shown interest = website visit, video watch, engagement = explain the service in more detail
Level 2 = Concrete product interest = viewed different product pages > More information on delivery and the specific products they are interested in
Level 3 = Purchase intention = added product to cart = convince them with abandoned cart dynamic ads
Level 4 = Purchased a product = Show cross-sell, upsell, and retention ads
This flow enables us to track and nurture them. Moreover, it feeds Facebook's ads’ algorithm to create more accurate audiences for us. When checking analytics of live light, we saw that the gap between activation(add to cart, conversions) and revenue is high. So we make retargeting our number 1 priority.
As you see above, we frequently tested new creatives to improve our conversions and understand our audience better in each experiment. Besides weekly reports, live light always had access to their Google analytics dashboard to track their campaigns' performance.
We like to work clinical and share our findings with our partners. Above, you can see how deep we go into analytics to compare, iterate, and find the new best performing campaign to bring you more customers.
Facebook ads are one of the most used platforms at GrowForce. We’re implementing and trying new experiments daily and have experience in B2B, B2C and eCommerce domains. Please feel free to get in touch with us to structure new or develop your existing campaigns.
Second experiment: reacting to the pandemic, moving the focus from expats to remote working.
We had multiple lockdowns in our market (BE). As a result, many people had to work from their homes. And of course, everyone wanted to make their working environment better to keep their motivation as high as possible.
This was obviously a new hook for live light. We took this opportunity and implemented a landing page + a set of Facebook Ads. This Facebook ad is still one of the most effective ones up to this date.
Third experiment: a lead magnet that closed the gap between add to cart and conversions.
Most of our prospects were getting stuck in the “add to cart” step. They were interested enough to click add to cart but not interested (or informed) to move on or leave their details. We thought: ‘If we can get their personal information, we could nurture them into customers. Or at least, we will be in touch with them.”
And we pushed “get a quote” as in-between steps to transform visitors into leads. We captured them with a pop-up where we offered “the first month free”. This little value surprisingly brought us many customers and many more leads.
Fourth experiment: rent to own option.
Through our surveys, we’ve found that a remarkable amount of our prospects and customers wanted to have an option to own the furniture. We’ve also focused on this feedback and created another FB campaign to validate the idea.
You see, our strategy is evolving with concrete feedback, measurement, iteration, and eventually growth. Right now, we are still testing the “rent to own option”, and so far, we’re getting good results.
Would you like to grow and scale-up your venture?
Hope you liked the case study and can benefit from some of these strategies and ideas. If these strategies and our way of working resonate with your business approach, don’t hesitate to schedule a call. We would love to help you test, validate, build, and grow!
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