Accelerating the growth of an online furniture rental start-up: developing buyer personas on a b2c and b2b level to optimize the marketing communication strategy

Abstract

Overproduction and overconsumption of products is a common problem in today’s society, with harmful consequences for people and the environment. The rise of fast business models contributed to this problem, allowing consumers to purchase affordable products with lower quality and higher production risks. However, the increasing awareness of consumers on the environmental damages these business models bring have contributed to a shift in multiple industries. Businesses are consciously looking for more sustainable alternatives to provide to their customers and this trend is also noticeable in the furniture industry. Live Light is an example of such a business. By opting for furniture as a service, the company hopes to fight the battle against fast furniture. They do this by using the circular economy principle. In practice, the start-up rents out existing furniture, environmentally-friendly produced with high-quality durable materials. Once it is rented out, Live Light offers the customer the possibilities to return, swap or buy-out the products. Live Light successfully launched in 2020 and has been growing its customer portfolio ever since. Because of the rapid growth, the spin-off typically struggles with keeping an overview of their customer profiles. Therefore, Live Light would benefit from mapping out their current and potential customer portfolio. This way, they can reach their customers more efficiently and continue the steady growth by providing the right message to the right audience. Hence, this In-Company Project focuses on optimizing the Live Light communication and marketing strategies by developing personas for the B2B and B2C audiences. Within the scope of our In-Company Project, we developed personas and a communication strategy based on available literature, quantitative survey and qualitative interview research. The literature and desk research describes the changing environment that contributed to Live Light's creation and the competitive landscape of Live Light. By means of survey research, we were able to identify the existing and potential B2C customers of Live Light. In total we gathered 594 survey responses, of which 524 were extremely useful. The exploration of the B2B market was examined by means of interviews. A short survey was also attached at the end to find out the decisive value drivers for those decision makers. In total, we conducted 12 interviews including four existing customers and eight potential customers. To gain even further insight into the existing B2B customers, we also leveraged the existing data that Live light has managed to collect to date. From our analyses, five clear segments could be identified within the B2C market. Whereby one of the segments, the Live Light Lover, is seen as the most important target group on which Live Light should focus. This persona is already very present in the current subscribers and there is an attractive market potential of 14% in the market of non-subscribers. This segment is very interested in interior design, quality and sustainability. Live Light Lovers use magazines and social media platforms to get inspiration for their new interior. Instagram and Pinterest in particular are a source of inspiration for these people. They are drawn towards design stores, as these sell the brands they aspire to possess. For the Live Light Lover, it is crucial for design pieces to be sustainably sourced and from an environmentally-friendly company. While this plays a significant role, the quality products have to fit in their well-thought-out interior. Even though price is not the most important decision criterium, it still plays a certain role for these people. Knowing all this, it is evident that the communication message for this segment should highlight the premium quality, design and sustainability aspect. In this research we give detailed examples and tactics on how Live Light could approach this segment. Interviews with existing and potential customers also yielded many new insights. When we began to make a comparison or distinction between the companies, one thing became clear to us. For all interviewed companies, flexibility appeared to be a key driver for furniture rental. Although this driver contains different meanings for each respondent, this one came out as the most pronounced. Flexibility refers on one hand to the possibility of testing the furniture without buying them outright and on the other hand to the possibility to swap. In addition, we noticed that the driver price is also very closely aligned with flexibility. When analyzing this further, it turned out that this was mainly about minimizing financial risks by giving companies the possibility, and thus the flexibility, to make monthly payments. Instead of price, this driver could be formulated as affordability. Because flexibility was so prominent in our analysis, we would advise Live Light to use this in their overall message towards different industries and companies. This way they are slightly assured that they will already reach a large segment. However, further analyses from our B2B survey also revealed that, within the organization, different decision makers could also attach importance to other value drivers. From these results, we managed to identify two more prominent distinctions and build two explorative B2B personas. Our first and most important B2B persona would be interior savvy Isabelle. This persona wants to deliver the best possible design and quality to her clients and thus this is what drives her in her search for furniture. Even though price is not the most important decision-criterium, it still plays a certain role for Isabelle. Sustainability is also always a nice touch, but it is not what prevails in her search. This persona can be reached through social media, including LinkedIn, Facebook, Instagram and Pinterest, of which the latter two should be focused on more extensively. She sees Instagram as the optimal platform for promoting her own business but also for finding inspiration. She also finds LinkedIn interesting to get in touch with other companies and thus potential clients. However, this platform is not necessary for advertisement placement. Pinterest is a source of inspiration for her projects. A second persona for B2B is Sustainable Steve. Although this seems like an interesting segment for Live Light, it needs to be invested further in future research to draw definite conclusions. We therefore opt for Interior savvy Isabelle to be the first one in line to target. In addition, by means of desk research we were able to analyze the competitive landscape and current position of Live Light. Here we could conclude that since Live Light just entered the market, they already have a sufficient positioning. However, they should be aware of the increasing shift towards furniture rental and circularity models, and the rising interest of both competitors and customers. As these trends have conquered the US-market already extensively, we are sure this wave will come across the Benelux as well. We therefore advise Live Light to be aware of the already existing and close competitors and optimize their positioning, based on already more established strategies as we see in the US. In conclusion, with this research we provide Live Light with an overview of who and how they should reach their customers to accelerate their future growth. We are certain that Live Light still has a very large growth potential just by adapting some minor things in their communication approach.