EXECUTIVE SUMMARY

Goal

The goal of this project is to analyze the status quo of Festo LX’s data-driven business model and provide concrete recommendations based on research and best practices on which KPIs to collect and which strategies to employ. This aims to refine the current business model and promote decisions guided by data rather than gut feelings.

Methodology

The project began with extensive literature research to build foundational knowledge on e-learning systems and data-driven business models, including commonly used KPIs. The next step involved creating a data inventory that catalogues all previously researched KPIs, capturing both those used by the interviewed and surveyed companies, as well as those collected by Festo LX.

A total of twelve interviews were conducted with direct competitors in the learning platform and analogue markets to understand the strategies these organizations employ. In addition, these thirteen companies completed surveys to indicate which KPIs they collect.

The final step was to benchmark and compare these findings with Festo LX’s data in order to provide concrete recommendations on which KPIs to continue, discontinue, or add to their KPI list through a ranking. Furthermore, qualitative recommendations were introduced to enhance Festo LX’s data-driven business model.

Results

The results can be divided into quantitative recommendations and qualitative recommendations.

Starting with the quantitative recommendations – the survey results were analyzed and a ranking of KPIs has been created across six different metrics, namely: 1) financial metrics, 2) customer metrics, 3) process & operation metrics, 4) human resources metrics, 5) sales metrics and lastly 6) marketing metrics.

In the category of financial metrics, net revenue retention (NRR), annual recurring revenue (ARR), and net revenue churn (NRC) were the most important in the survey. Meanwhile, regarding customer metrics, churn rate, retention rate, and customer acquisition cost (CAC) ranked the highest. Furthermore, for process & operation metrics, traffic to webpage, click through rate (CTR), clicks on website, and customer complaint & resolution rate were identified as the most significant. In terms of human 

resources metrics, employee retention rate and employee satisfaction rate emerged as the top priorities. Additionally, when looking at sales metrics, average order value, average customer expenditure, purchase frequency, and revenue growth rate (RGI) were highlighted as the key metrics. Lastly, for marketing metrics, conversion rate (CVR) and number of qualified leads stood out as the most important KPIs.

Additionally, the qualitative results include several strategies. Through interviews, a growth phase approach was identified. Depending on which phase a business is in, different KPIs need to be collected. Festo LX is believed to be in the growth phase, which means the focus should be on acquiring new customers. Consequently, Festo LX should concentrate on marketing, traffic, and SEO metrics.

Furthermore, a NorthStar KPIs model is proposed. More specifically, five NorthStar KPIs should be selected. Every new or existing KPI that is proposed must align with the overall NorthStar KPIs and thus with the strategic goals of the business. Closely related, an OKR-Framework is also recommended, requiring new goals to be set each quarter. Additionally, KPIs should be reviewed regularly to ensure they still align with overall business goals and the five NorthStar KPIs.

Lastly, a Sales and Marketing Funnel is proposed. Each stage in the funnel should be reviewed to identify where customers are not moving on to the next stage. Stages with a low conversion rate create opportunities for improvement.

Cooperation Partner

• Festo Didactic SE
  Rechbergstr. 3
  D-73770 Denkendorf
  https://lx.festo.com/de

Contact Person

• Dr. Ute Gebhard - ute.gebhard@festo.com

Student Team

• Martin Bärnthaler
  Paul Czanek
  Ajla Fejzic
  Kevin Nguyen

Project Manager

• Caroline Fabian, M.Sc., M.Sc.

• Shtefi Mladenovska, M.Sc.

• Sandra Jeske, M.Sc.