Executive Summary

Festo LX, a cloud-based learning experience platform launched by Festo Didactic SE, has become a central part of the company's digital education ecosystem. However, despite strong annual growth, Festo LX has been experiencing a higher-than-expected churn rate. 

Goal

This project seeks to analyze the reasons behind customer churn, benchmark Festo LX against industry competitors, and provide actionable strategies to improve retention.

Methodology

The analysis involved a comprehensive research approach, combining literature review, interviews with key stakeholders, customer surveys, and data-driven status quo and competitive analyses. The research revealed that Festo LX’s churn rate currently stands at 35%, substantially higher than the industry benchmark. Particularly, academic institutions show the highest churn rate at 43%, often due to budget constraints and licensing limitations. Additional findings indicate that many customers discontinue their subscriptions due to pricing concerns, the absence of automatic renewal, and a lack of engagement with the platform. By examining the retention strategies of competitors such as Udemy, Pluralsight, and Skillsoft, it became evident that strong customer engagement, proactive feedback mechanisms, and flexible pricing models contribute significantly to lower churn rates.

Results

Based on these findings, the project proposes several key recommendations. Improving customer onboarding with a quick-start guide and personalized onboarding sessions can help users integrate more efficiently into the platform. Strengthening feedback mechanisms through in-app surveys, real-time content ratings, and user forums will provide valuable customer insights and enable better platform adjustments. Introducing more flexible subscription models, including tiered pricing and automatic renewal options with transparent cancellation policies, can cater to the diverse needs of customers. Lastly, increasing user engagement through personalized notifications, targeted industry-specific newsletters,