Focus on Value, not Volume – SpotHero Founder on B2C Marketplaces (Part I)
Chicago: During Techweek Chicago Growth Summit 2017, Mark Lawrence, Co-Founder and CEO of SpotHero, shared his views about the challenges of customer acquisition in B2C marketplaces. In Part 1 of this 3 part series, he talks about listening to the customers to improve a company’s value offering.
“Bring enormous amount of value to a small group of people, versus trying to bring a little bit of value to a large group.” – Mark Lawrence, Co-founder and CEO of SpotHero
SpotHero is a parking reservation service that connects drivers with parking lots, garages and valet services. The company has presence in 50+ cities in USA and Canada.
As a panelist at Techweek Chicago’s Growth Summit, Lawrence was asked how SpotHero incorporates customer insights into its customer acquisition strategy.
“From the start, customer insights have been part of our ethos,” Lawrence began. “We listen to our customers on a garage-by-garage basis – every review, every issue. And we actually have people whose sole job is listening, taking that feedback in, and solving the issues.”
SpotHero measures the effectiveness of its response to customer insights through the lifetime value of the customers they acquire. “For us, it’s not just about converting well on the first purchase, but also about how we’re shaping the customer behavior for repeat purchases.”
SpotHero’s approach to customer retention is to focus on value and not volume. The company spent 3 years catering only to Chicago’s parking spaces to develop a deep understanding of the customers. “Other parking apps had scaled to 100+ cities in that time, but we stayed put in Chicago. We tried to bring enormous amount of value to a small group of people, versus trying to bring a little bit of value to a large group of people.”
The next most important step for SpotHero, Lawrence said, was measuring if word about this value was spreading out. “The Net Promoter Score is very very important for us. We have a lot of digital referral options, but offline word of mouth allows us to do more with our spend. If we acquire one customer, and they tell 3 people, we have huge leverage on our marketing dollars.”
In the next part of this series, Lawrence explains how SpotHero leveraged its offline marketing efforts to not only acquire more customers, but also bolster its supply-side of garages, parking lots, and valet services.
To see the full video for Techweek Chicago Growth Summit 2017: B2C Customer Acquisition, go here.
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