How might we increase the lifetime value of our current customers?
MoreHands Maid Service wanted to increase the lifetime value of their customer by adding delight to their current service offerings.
The cost of acquisition for a new customer is high. If customers leave the company for before 12 visits, it costs MoreHands Maid Service additional resources.
To increase lifetime value, MoreHands Maid Service beta tested an errand service that would allow current customers to request help completing tasks on their to-do lists. However, not a lot of customers were using this service, and the client wanted to know why.
The main questions we needed to answer for this project were:
- How could we add more delight that engaged customers to stay with the company for longer?
- Why weren’t customers using the errand service?
- Where were customers experiencing pain in their day-to-day life?
Improving the customer experience by adding delightful add-on services would ultimately improve the lifetime value and increase the time customers stay with the company.
We knew we needed to understand customer behavior surrounding the errand service and identify pain associated with household chores to discover additional opportunity.
It was clear that we needed to learn more about their current customers.
We approached the project through a mix of quantitative and qualitative research. Through this, our goals were to:
- understand why customers do the things they do;
- explore what the customers were thinking and feeling so we could better understand their needs.
Following the insights from our research, we recommended that MoreHands Maid Service streamlined their errand service, by limiting errands to only three offerings.
We also suggested that they should implement a wash-and-fold service. The client was excited about the findings and was looking at how to make adjustments.
The scope of this project included performing research on the client’s current customer base and influencing user experience strategy direction to solve the problem at hand.
We had nine weeks to understand the problem and explore how we might increase customer lifetime value. We presented our findings and recommendations in June 2021.
We created a testing plan, recruited participants, conducted qualitative and quantitative research through surveys and remote, moderated user interviews. These findings influenced our strategy suggestions following analysis and synthesis.
To better understand the barriers that prevented customers from using the errand service, we decided to conduct qualitative interviews. We also used these sessions to understand current pains surrounding household chores.
The goal of the formative study was to understand what value add-ons might look like by uncovering current customers’ key needs and pains so we could explore how MoreHands Maid Service could expand on their services to add lifelong value to their clientele. We screened and recruited 10 current customers to participate in remote interview sessions.
We needed to understand:
- Which areas customers needed extra help.
- Which errands and chores customers liked and didn’t like.
The video recordings were uploaded to Dovetail, a synthesis tool, which we used to help us identify user insights from our research session.
We also conducted a stakeholder data synthesis session so that we could work collaboratively to pull out key insights.
From the research session, we discovered that the current customers we spoke with loved the maid service, but no one had used the errand service. This was surprising because we discovered a lot of common pain surrounding errands which the service could eliminate. It turned out that customers were unsure how the service worked, which prevented them from moving forward. Additionally, we uncovered new pain points around other chores which the errand service could not solve. We wanted to explore this issue further. We wanted to determine if there was another service opportunity that may be more valuable than the existing errand service.
Before we expanded our research, we wanted to capture what we had discovered in our initial session. The user insights helped us capture two key customer types, which allowed us to map a general customer journey.
We created these two users personas from the user insights we gathered from our research to help relate to the customer’s pains, needs, and identity.
The Stay at Home Mom
Cathy, the stay at home mom, was busy helping her family and raising her kids. Her family had just moved into a bigger home, and she needed extra help managing her household. She wanted more free time with her family, and wanted to better help her husband with their family business. Cathy had more time to complete most errands on her own time and found the break away from home to be soothing.
The Working Professional
Dani, the working professional, was extremely business with her career. She spent a large part of her time working and outsourced as much as she could to have free time in the evenings, so she could unwind. Being that her schedule was so hectic, Dani would prefer to outsource as much as she could to better enjoy time off work. From our research, Dani, would be more willing to pay to outsource errands and other chores that were identified as pains from the research.
Customer Journey Map
We used the customer journey map to create a visual representation of the customer journey from the point where they realized there is a need, to booking the initial cleaning, then becoming an advocate of the brand.
These insights were important to us because it demonstrated that current customers were loyal to MoreHands.
From our findings, it was clear that people loved the quality of service MoreHand’s provided and were likely to recommend the company to their friends and colleagues. From this, we knew that the errand service, or any service offering that was implemented would likely end in success due to customer support and loyalty.
After discussions with the client, we decided to expand on the research and take a deeper dive into the data.
Of the 10 customers that were interviewed, the majority experienced pain surrounding household chores and errands.
But we wanted to know what would happen if we expanded the research, casting a wider net, really digging into the pain people experienced.
The goal of this study was to gather quantitative data surrounding how people approached their errands and chores. We had 41 current customers complete the survey.
We asked questions like…
- What do shopping behaviors look like?
- Are returns an issue? Why?
- Are most people actually doing regular donations to Goodwill?
- Why aren’t people outsourcing laundry
What do shopping behaviors look like?
Based on the dislike towards returning things, we were surprised to see that 51% of participants were only shopping monthly, with 29% shopping weekly.
Are returns an issue? Why?
78% of customers delayed making returns because they didn’t consider it to be high priority and were too busy.
Are most people actually doing regular donations to Goodwill?
Out of all the participants we spoke with, 93% regularly donated.
Based on the qualitative interviews we conducted combined with the quantitative survey confirmed that there was enough pain surrounding errands, we just needed to specify which errands were offered and add limitations to the errand to provide clarity. Based on the quantitative survey, it was clear that the most pain was surrounding:
- UPS drop off returns
- Goodwill drop-offs if items fit in standard trash bag
- Other errands, of reasonable request, that can be completed in the area
Why aren’t people outsourcing laundry
Based on the data collected, a little over half of the participants considered outsourcing laundry but don’t. They are worried about:
- time constraints for pickup and drop off
- lack of control
It was clear that laundry was enough of a pain that they considered outsourcing, but they hesitated. With that said, this could easily be an avenue to increase customer lifetime value. We wanted to answer another question… how might we entice current customers to utilize a laundry service? How could we eliminate hesitation to outsource despite this being a clear pain?
From the data, we discovered that the errand service was viable, but we needed to add specification to how the service worked and define what the constraints of the service were. Now, we needed to figure out how to eliminate hesitation towards outsourcing laundry.
Brainstorming Session with the Stakeholders
We had a lengthy brainstorming session with the stakeholders to decide if adding a laundry service was viable. The cost of starting the service was not an issue, but we had one problem. How we could entice those who hesitated to outsource to use the service.
- If there was an educational video to explain how the service worked, we could use this space to eliminate concerns of quality.
- Providing people with a bag to fill with clothes they needed to be washed, then attaching a QR code which pulled up an educational video describing the process would promote trust in the service.
- Just like the errand service, the laundry service could be beta tested with core customers. The beat group could provide feedback on how to improve the service.
- If the laundry service proved to be successful, it could be expanded state wide and added to the website.
We knew this implementation plan would work because laundry was a pain across all the research we conducted. The majority of individuals experienced emergency situations when they needed extra help. Being that the cost to try this service was minimal compared to the return of investment, the stakeholder decided to give it a try.
We are looking forward to hearing about how the laundry service and errand service iterations improve MoreHands Maid Service customer lifetime value.