Tesla-Carpool with Laurent Decrue, MOVU | Wortspiel.TV, Episode 1
Inspired by James Corden’s ‘Carpool Karaoke’, we took Laurent on an entertaining journey around Lake Zürich. We were driving a Tesla, instead of a petrol driven SUV like the original. Rather than singing karaoke we discussed startups and the secrets of their success, skiing and, of course, AdWords.
Please note – The conversation is in Swiss German, with subtitles in German. Subtitles in English will be available shortly. Here is a summary of the discussion.
Laurent on MOVU: “Everything about the move, first hand”
Stefan: How can you explain in 30 seconds what MOVU does?
Laurent: You go on our website and ask for help with a move or with cleaning. We then suggest 5 suitable service providers. Our ‘move captains’ support you. You get vouchers for furniture, your mobile, home phone and internet. We will help with registration in your new area; with your change of address. Even if you’re a do-it-yourself customer we’ll find a suitable solution. From us you’ll get all the know-how related to the move free of charge.
Stefan: What is your USP in the market? What sets you apart from other providers in this sector?
Laurent: We provide a comprehensive service. The others are lead generating platforms. They sell on your query, your email address and phone number and your name to moving companies. These then get in touch with you. That’s not a good service because you could have simply gone on the internet and found five providers for yourself. All companies we recommend are quality checked. You get their offers online and can compare them. All-inclusive deals and customer ratings help you to decide. If you’re not sure about something, there’s customer support available through email, web chat or on the phone, for free.
Stefan: Did you start off with this idea?
Laurent: No. The idea was there but we started out with a leads platform. We phoned our users and noticed that we’d have to offer more support because it’s such a confusing market. We asked moving companies what they thought of our idea. They were all sceptical. But now, 2 years later, we have 120 partners in this sector. We generate 60 – 80% of the online turnover for these firms.
Stefan: You advocate 5 core values. Which values are these and what’s the thinking behind it?
Laurent: The core values we want to live by are openness, honesty, acceptance of criticism, performance and drive. If you’re honest, you must accept criticism and feedback. In this way you create a basis for trust. Drive and performance are significant for a startup company. With 6 or 7 hours work a day you wouldn’t get anywhere. At the start you have to give everything: new, creative ideas, long hours – blood, sweat and tears. If someone can’t bring 4 of these values to the table, then we have to let them go.
Aurel: How important is speed?
Laurent: Extremely. Extremely important.
Laurent: “We work hard to find new channels through which we can regularly acquire new users.”
Stefan: What are your goals?
Laurent: 2016 should be a year of growth for MOVU. We would like to get more and more people moving house to use our website. We’d like to run A/B tests; learn from that and so develop the service further. We’re striving for 3000 customers a month.
Laurent on AdWords: “Still our strongest channel”
Stefan: What are the difficulties of your business model?
Laurent: When you move you’re not going to move again in the next 10 to 12 months. That means we won’t get returning customers; we couldn’t get a long term commitment from them. That’s why we work hard to find new channels through which we can regularly acquire new users.
Aurel: “Google AdWords is the channel for initial customer interactions”
Aurel: Yes, it’s a problem for you. You have no repeat business. The first customer contact must be profitable. Google AdWords is the channel for initial customer contacts; you can really reap the rewards here. In your kind of business you’re almost forced to work with AdWords as profitably as possible unless you manage to increase referrals. Is there a real chance of that?
Laurent: Certainly, one way would be to boost customer recommendations. Another would be to hit all a customer’s touchpoints. Google is one such touchpoint.
Aurel: We do AdWords, deliver new ideas, and our competitors are always watching. Our ideas are taken up by others; swiped, adapted. We always have to find new ideas and be at the forefront. Do you feel these competitors breathing down your neck?
Laurent: Yes, to an extent. A competitor told me that his marketing colleague would show him what we were doing on AdWords every two days and he wanted to carry on with that. We – you above all – are good and very creative. People will copy.
Laurent: “The performance channels are extremely labour intensive.”
Stefan: What are your experiences of customer acquisition?
Laurent: The performance channels: Google AdWords, various retargeting measures – Facebook – these are easy to set up and test at the start. You want to manage them efficiently; they are expensive and very labour intensive. That’s why we work with you. We couldn’t devote enough time to it on our own. Impossible.
Stefan: What percentage of your customers come to you through referrals and how many have you bought? Can you estimate that?
Laurent: Yes. 20% know of us through friends and family. That’s not bad, but not altogether satisfactory. The remaining 80% we’ve bought. Through radio advertising or via online partnerships with Homegate, Immoscout and similar platforms – or through the strongest channel, AdWords.
Stefan: In what chapter of the MOVU story was AdWords especially important?
Laurent: From day one, when we began with a quick proof of concept. We tested whether we had found a product that would fit in the market. Up until 2 or 3 months ago AdWords was still very important. Now we’ve reached a scale in the market where we can survive. In the future it’s about ensuring profitability.
Aurel: Hugo Lötscher, the Swiss author, once said, “one is never independent. One chooses ones dependencies, more or less, intelligently.” Would you say that the dependence on Google, AdWords above all, is an intelligent dependency?
Laurent: No. It’s a necessary evil. At the start Google is extremely helpful, because you can generate growth very quickly. But as soon as you need to maintain the velocity, Google acts like a brake. It’s like a child that needs to be led around by hand.
Aurel: But you’re not really sure of this. You suppose or fear it may be true, but it could be that it isn’t the case and that you could, in fact, get more out of Google.
Laurent: Of course, that’s what I’m hoping.
Aurel: How could you get more out of a really investment intensive channel like AdWords?
Laurent: I think Google knows how much a lead or a client is worth to us. Perhaps I’m overstating my paranoia but I have the feeling that, regardless of how well we optimise, Google still has a handle on everything. If we move to far away from their optimal profit margin, they’ll simply adjust accordingly to compensate for this. More competition joins the fray or the quality aspect changes. That’s just what I think.
Aurel: Nobody can know that for sure. Don’t you trust Google’s motto ‘Don’t be evil’?
Laurent: I’m no fan of too much power concentrated in one place.
Laurent: “You must use AdWords in order to have a profile in the market.”
Stefan: Can you foster a profitable business with AdWords?
Laurent: I believe it strongly depends on the competitive pressure in your sector. The more competition there is, the less likely it will be that AdWords is profitable for you. Nonetheless you must use AdWords in order to have a profile in the market. Many online shops invest in AdWords and make money out of the resulting business. The less competition there is in your particular line, the more likely it will be that AdWords will help you grow.
Stefan: What does AdWords mean to you strategically?
Laurent: AdWords was important for the proof of concept; for the initial growth and partnerships. If you want a place at the table with one of the bigger estate agencies, you need a name. They say, “you’re one of 10,000 who claims to have a good idea. Prove it.” That’s why AdWords was our most important tool for a long time. From now on we’ll try to use the AdWords channel as efficiently as possible. We want to attain a profitable margin. And further growth through our partnerships.
Laurent:“With AdWords you quickly accrue a lot of traffic.”
Stefan: So, you’re changing your focus with AdWords from growth to efficiency, to ‘return on ad spend’?
Stefan: What are the disadvantages of AdWords?
Laurent: AdWords is vulnerable to competition. If two or three competitors buy related key words, it gets expensive. Then you need to optimise much more effectively. I’m not well enough versed in it that I could tell you whether or not we would have made it, had we only committed to AdWords. If I could choose, I would prefer to depend on partnerships. It’s hard graft to build them up at the start. But once they’re working, they have a good lock-in effect.
Aurel: There are disadvantages with these partnerships too. It takes time to establish them and they cannot be managed like AdWords because the partner can do as he pleases. There’s no long term agreement set in stone.
Laurent: Yes, maybe we’ll realise at some point that everything I said was wrong. AdWords offers simple testing opportunities; landing page tests. You can see what users react best to. So AdWords is always exciting. You quickly accrue a lot of traffic. You can be flexible; get it running then turn it off. AdWords has become a profitable channel for us, because you’ve done great work.
Aurel: We’re an AdWords agency because our experience tells us that AdWords has the best benefit-cost ratio. We do test other channels. You test Facebook for us. As soon as a channel turns out to be better, we’d switch. But that hasn’t been the case till now. Bearing in mind how quickly Google innovate it’s probably not going to happen for the foreseeable future.
Laurent: I’d agree with that too.
Aurel: I think Google having a near monopoly is also not so good. But that’s the fact of the matter and you just have to deal with it.
Laurent: Right. We can’t change that. Even so, I’m still sceptical. I believe Google will always be an important channel for us, if not our most important. It’s more of a necessary evil for our business case than a real opportunity. By all means, prove me wrong.
Laurent on Wortspiel: “You are extremely quick.”
Laurent Decrue and Stefan Vetter got to know one another by chance. Here they reminisce about the early period of their collaboration.
Stefan: Have you always worked with agencies or did you initially do AdWords in-house?
Laurent: Right at the start I did it with someone I know. That didn’t really work out. Our first marketing manager also did it all himself. Before he left us we engaged an agency that threw all sorts of keywords out there; tried them out and tested them. In the cleaning sector this worked well. In the house moving sector it drove up the costs. Luckily I came across your company. You’re very quick and invest a lot in this partnership and are ready to try out new things. You live these values.
Laurent: “You’re very quick and invest a lot in this partnership.”
Stefan: How has our relationship developed from your perspective?
Laurent: From the outset you asked us questions about our business in order to better understand it. You succinctly suggested some things we could improve. Then we tasked you with analysing the whole account. This account was in such a chaotic state that you wasted no time overhauling it within a week. After that I was convinced we had found the right partner. You just modified things at breakneck speed. It was important to us that you reacted so flexibly because 90% of our traffic comes through AdWords.
Laurent: “We published the budget and saw how powerful AdWords was. For us, that was leading to operational bottlenecks.”
Stefan: Can you remember specific instances of us working together?
Laurent: I appreciated the fact that we met once a month. You came and delivered the report; asked questions. We could sense that you wanted to know more about us. We often changed the strategy from more profitability back to growth. You went along with this sympathetically. At the beginning of December we published the budget and saw how powerful AdWords was. For us, that was leading to operational bottlenecks we had not known before. Lifting the lid on it, we saw how powerful it was. Then there was the start in French-speaking Switzerland. You were quickly ready for that and heavily involved once again.
Stefan: From the beginning we worked for a fixed price. At some point we settled on a performance related model. With this, what changed for you?
Laurent: We let all our partners know that we would like to grow together. A performance related model is the logical consequence of that. It allows you to share in your own success. That’s better for our mindset because our interests and your interests are 100% the same. What does it mean for you?
Stefan: We talk less about budgets. We talk more about goals and achievements. The budget is often a secondary consideration. The performance related model ensures we achieve goals and that these give a good financial return. The second thing is that reporting gets easier. We discuss fewer KPIs: just turnover generated, leads and Adwords costs. And that’s it. We talk a lot less about click rates or clicks, or click prices.
Laurent: Yes, of course that’s right. It’s a question of trust: we no longer have to know the ins and outs of everything you do because our goals are the same.