The End of Business Dinosaurs in the Czech Republic

Does your project have clear priorities or are you just wasting money and energy on everything and nothing?

You launch marketing campaigns to promote your new eshop and lo and behold! No one is buying anything. You forgot about the cucumber... that is, to test the order form. Tens of thousands in dill.

This will not happen to you if you have clear priorities. IN House of Řezáč we use Lean Analytics Frameworkthat divides the project into five phases from idea to scale. This helps us direct our energy in the right direction. Let's go through it.

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Stage 1: Idea

At the first stage, you verify the meaningfulness of the project. Do users really have a problem that the project solves? Will users want to use it? Will they be willing to pay for it?

At this stage, you do not have your own data, so you need to choose the appropriate methods User research and start making decisions based on facts. These can be interviews with potential customers, analysis of thematic online discussions, questionnaires or analysis of publicly available data through which we gain insights into the world of our potential customers.

At House of Cutter we have a project with the working designation HoQ. The project does not exist yet. We are exploring whether it addresses the real problem of people out there. We talk to them in person and on the phone. We do fake-door tests. We verify our own assumptions. And only if HoQ makes sense will you learn more about it.

Does your project have a chance to succeed? In the world of websites, this means that there are people who it makes sense to, will be willing to pay for it, and we are able to produce it.

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If you find that the project is meaningful for people, they react sensibly to your offer, e.g. through fake-door tests, and you are able to implement it, you can proceed to the next stage.

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Stage 2: Friendliness

In the second phase, you focus on whether your project is working properly, is usable, and you collect input from the first users.

To find out quickly, you create a product with the smallest number of functionsthat you start offering to people. You are especially interested in those who are already actively looking for a solution to the problem you have decided to solve.

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In the world of websites, this means

• Does the website work technically? Doesn't it throw 404 and 500 errors? Does the search work? Is the website fast?
• Is the website being used well by people? Why did they come at him? Does satisfaction leave? Can they choose the product? Can they buy it? Are they missing something?
• Do they buy what we offer them?

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Answers to these questions will give us User testing, measurements and other user research. Google Analytics, Hotjar, surveys or interviews with first customers can be used.

You will definitely want to track conversion rate (share of users who have done what we want), task completion rate (share of users who have done what they want), bounce rate, visit depth, cart abandonment, site error rate, etc. For the retention business, you need to monitor what the repeat of purchases is like.

At this stage, the project is now GOTOBRNO, which underwent a complete redesign in late August. We solve what content users are interested in (we have hypotheses from the first stage), how they navigate the site and whether they manage to find the desired information. At this stage, every website was sometimes located — after its launch, or after a major redesign. And this is the moment when all the above questions need to be answered first.

You don't engage in massive campaigns at this stage. There's no point in investing hundreds of thousands in marketing until you're confident that users can get through the conversion funnel. If you have already debugged major technical errors, people can use the site and order it, so proceed to the next stage.

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Stage 3: Growth

Every project has some minimal amount of users, without which it will not work, because it does not get into black numbers.

One of our clients had an idea for an e-shop. We calculated for him that he had to get to 160 orders a day with a certain average order value or he wouldn't survive.

• You always have fixed costs -- for infrastructure, renting warehouses and offices, salaries, etc.
• When you build a social network, you have to achieve Supercritical mass of users, otherwise it will perish.
• For Eureka platforms or advertising portals, it is necessary to find a minimum number of visitors to make sense for traders, and a minimum number of marketers for someone to go there.
• The same goes for multimedia websites, games or any other services.

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In the growth phase, we want to get a supercritical mass of visitors and customers. A marketing strategy will help us with this.

• Who do I want to reach? Which attributes/benefits will they respond best to?
• How will my activities differ for visitors at different stages of the shopping cycle?
• What channels will I use? Where are the people I want to reach?
• What content do I need to create?
• How will I measure that the investment makes sense?

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We monitor metrics such as user growth, acquisition price, virality, share of repeat purchase users (for retention business), etc., and continuously adjust marketing investments.

• Do people respond to us on social media?
• Do they respond to display advertising?
• Do AdWords campaigns pay? Which ones?
• Does remarketing make sense?

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Thanks to marketing activities, the number of users will begin to grow. Thus, it is necessary to follow the metrics from the previous stage Friendliness. As content increases, people may stop navigating the site, may have new and unmet needs, etc.

In the growth phase there is now a project Reading Specs. The site is free of major bugs and users will find what they are looking for. Therefore, we increase the number of visitors through SEO, PPC, emailing and other activities.

Do you have enough visitors, customers and users? Proceed to the next stage.

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Stage 4: Profit

At this stage, the goal of activities is to increase profit. This can be done in several ways:

• Higher conversions — manage to increase the conversion rate and get more new customers.
• Increase in turnover for existing customers — increase in the number of products in the basket, higher transaction value, higher price of products, higher number of transactions per customer,...
• Cost reduction — stopping inefficient campaigns, reducing production costs, discounts from suppliers, optimizing processes,...

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You can select one or more areas to focus on, and that's what metrics you need to follow. Typically, this is net profit, the average transaction value or the number of products in the cart. PNO, ROI or CLV. Metrics aimed at greater efficiency can be e.g. product selection time, cart-to-detail rate or cart throughput.

One of our clients is the number one in their market in the Czech Republic, so they are trying to increase the conversion rate and order value, optimize campaigns and consider expanding abroad (phase 5).

At this stage, e.g. Google Analytics data ceases to be enough for you, so you connect it with other data sources — ERP, CRM, mail system, etc. You can afford to run A/B tests that previously might not have paid off because you didn't have enough data due to low traffic.

We now have the means for further growth. Where next? Scaling.

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Stage 5: Scaling

Scaling includes growing into other markets, reaching new target groups, leveraging additional sales channels (e.g. within partnerships). Each such step can be understood as a new project, on which it is necessary to start over from the first stage.

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How can you use the framework for your project?

1. Find the stage in which your project is located.
2. Describe the important issues that you need to address at a given stage.
3. Establish a state where you can move on.
4. Measure, evaluate.
5. If any problem with the earlier stage turns out, go back. If you meet the set criteria, go to the next stage.

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Summarize

The phases determine the primary focus of the project at a particular moment. Important is the word primary. For example, SEO will not be dealt with only in the Growth and Usability phase only in the Friendliness phase. To a lesser or greater extent, part of the activities always permeates the entire project.

The Lean Analytics framework helps you determine where your energy and money are going. And it will reduce the likelihood that you will go extinct. Like dinosaurs.