LeanStartup in action at eCommerce furniture company


LeanMantra

Urban Ladder is one of the top online furniture companies which operate from Bangalore, India

I got a chance to meet Rajiv Srivatsa, one of the founders of Urban Ladder and understood that they are truly a Lean Startup in many ways.

Lets see how they have been Lean in their approach

You just need a landing page to learn what customers need

Initially the founders interviewed many potential customers to find out

  • How they are currently fulfilling their furniture needs
  • What they feel about buying furniture online
  • What categories of furniture are they comfortable buying online
  • If they do not want to buy online, what are they afraid about
  • Identify which piece of furniture is most in need

Once they have got good initial insights by interviewing potential customers, they started their second phase of customer discovery

They wanted to know if customers who told that they would buy online will truly buy, for this they created a landing page using Launchrock, where they could collect Email’s of potential customers and also direct them to a survey, to further understand their needs

LandingPage

With these insights, they narrowed down to the categories where they would start. Survey results clearly pointed to coffee tables, book racks, bed side tables etc.  They also decided that they would postpone the bigger categories like sofas

‘Everyone who needs furniture’ is NOT the right way to define your customer segment

As I always believe, identifying your customer segment is one of the most important elements of your business model; founders at urban ladder have thought through well in defining their customer segment

One of their customer segments is families who live in urban cities, who earn upwards of one lakh per month, who are digitally savvy, probably married and who bought a new house or moving into a rented house.

When you define a customer segment such clarity, you can define customer personals and market your solution better to the chosen segments.

It’s not the number of people who like your page is important

Founders at Urban ladder realized the power of social media and decided to invest time and money on Facebook business page

They did not run un-targeted ads, since they didn’t want people who may not be their true customers

Instead, once they got their initial fans, they analyzed their profiles and targeted similar profiles in their ad campaigns, and also since they had a defined customer segment they could target them efficiently via Facebook ads

No to Deals & Discounts

Founders decided that people who are looking for genuine quality products did not care much about deals and discounts. Hence one will not see any discounts in their site

Customer Service is the key to success

After successfully launching in Bangalore, founders decided that they would expand to other cities by using third party delivery services.

Since they track many data points, they found out that customers who were delivered using third party services were not greatly satisfied, for reasons including delay in delivery, poor customer service ethos etc.

Because Customer service was at the core of Urban Ladder’s culture, they immediately stopped third party delivery, though this meant losing up to 30% of their revenue. But by making this call, they not only got a lot of positive word of mouth, they also got more than 30% repeat traffic thus more than compensating for the loss in business by serving a smaller geography.

Other experiments which are run at Urban Ladder

Open temporary offline shops at exhibitions, apartments and office

Though they generated good revenue, return on investment was much low and the bandwidth it took to do these events was much higher, so Urban Ladder decided to postpone going the offline route

Pricing: they experimented with various prices before finalizing a price for each furniture unit.

Ad campaigns: After experimenting with Facebook and Google ads they found out that Facebook ads serve their purpose well, because Facebook ads are more visual (which is necessary to show a photo of their furniture) and they can run targeted ads

And finally I loved what Rajiv has to say about funding. Raise money so you are able to build a team and go out into the market, but take lesser money, so it keeps you on your toes w.r.t what you do with it


Views: 1278

Comment

You need to be a member of Business Model Innovation Hub to add comments!

Join Business Model Innovation Hub

Comment by Mike Lachapelle on June 7, 2013 at 1:19am

Rammohan

Thank you for posting this interesting case. It is a great example of the customer development model in practice. The iteration between discovery, and validation is demonstrated very well here. Also shown is the importance of deep customer insight, and the courage to base decisions on what the customers are telling you.

Cheers 

© 2017   Created by Alex Osterwalder.   Powered by

Badges  |  Report an Issue  |  Terms of Service