Lingoda’s Success Story
Left
to right: Felix Wunderlich, Co-Founder and Managing Director, Michael
Shangkuan, CEO, and Fabian Wunderlich, Co-Founder and Managing Director.
Source: Business Insider
Lingoda
is the brainchild of two brothers — Fabian and Felix Wunderlich. Both
went to study and work abroad for a couple of years, before returning
back to Berlin in 2013. At that time, the city was rising up as the new
startup capital of Europe — and this attracted a lot of new transplants.
The duo noticed that many expats, hired by local companies,
struggled to combine work and language learning. Their demanding work
schedules deterred them from joining in-person classes, offered by local
schools. So, Fabian and Felix decided to test an alternative —
on-demand 1:1 German learning sessions via Skype (led by certified
teachers).
The Wunderlichs soon realized that online language learning is a huge and profitable niche. After raising a seed funding round of $1.5 million,
they officially branded their venture as Lingoda and got down to work.
The team launched a convenient website for marketing to students,
recruited more tutors, and developed extra training materials.
Unlike
other language learning startups, Lingoda chose not to build its online
language learning platform. Instead, they kept using Zoom for hosting
classes to save on operational costs — while these saved costs went into
improving the quality of tutoring.
By 2016, Lingoda scaled
to offering classes in 4 languages — German, English, French, and
Spanish — and intends to keep it this way. But why don’t they add more
languages?
Because the Lingoda team has a “quality over quantity”
philosophy. The Wunderlichs envisioned Lingoda as a service offering
the same high academic teaching standards as traditional language
learning schools but more flexibility in terms of scheduling.
The brand’s main target audience
is busy working professionals, looking for an effective, yet
accessible, language learning experience. To meet their needs Lingoda
recruited over 1,500 certified native-speaking teachers, who can lead
language classes 24/7. They also spent a great deal of time on improving
the training materials and teaching tools.
As Fabian Wunderlich shared in an interview:
“CEFR-based
learning materials are designed by linguistic experts and include over
2,000 fully digital lessons, focused on speaking practice and filled
with action-oriented topics and easy-to-learn examples from real-life
situations”.
Superior teaching standards and unmatched
flexibility made Lingoda a threat to both traditional language learning
schools and online language apps.
To keep the growth momentum
going, Lingoda welcomed Michael Shangkuan at the end of 2017. A Harvard
Business school graduate and EdTech entrepreneur, Shangkuan has a
diverse background. He dabbled in investment banking at Goldman Sachs,
led brand management activities at Procter & Gamble, and
successfully scaled another educational company, Terra Education.
Shangkuan
originally joined Lingoda as a Managing Director, in charge of
Marketing and Finance. But his on-point advice and strategic thinking
eventually landed him in the CEO position. In this role, Shangkuan is
determined to turn Lingoda’s original brand vision into long-term,
cross-market growth.
In Shangkuan words, some of the first things he did to scale Lingoda were:
Hire the right talents for key roles and build extra teams
Refocus on operational priorities, while leaving room for ideas and innovation
Create better processes, without killing the entrepreneurial / innovation spirit
Through a series of methodical structural changes, process optimizations, and proactive customer listening, Shangkuan managed to increase Lingoda’s sales by 10 times without burning virtually any cash by 2020.
Then the pandemic hit — but Lingoda was well-positioned to profit from the new wave of online education fans. Lingoda’s internal survey suggests that 60% of users started learning a language during the pandemic.
So they doubled down on marketing to people who previously dismissed
online courses in favor of in-personal training and won over this market segment.
Another
smart (and generous) move they made during those challenging times?
They extended support to offline language schools. Instead of tanking
their direct competition, Lingoda extended a helping hand via the #StayHomeKeepLearning initiative.
Any language learning school could page Lingoda to get:
Free access to all its language learning materials
Assistance with setting up online classes (including setup done by Lingoda)
Guides and training on remote teaching
That
was a great gesture from Lingoda that didn’t go unnoticed by both
students’ and teachers’ communities — and likely led to more positive brand associations.
Lingoda,
now heavy with some extra cash, is bullish about growing its global
brand awareness and getting more users to try its product. The strong
growth numbers from 2021 have set a high bar for this year.
How are they planning to keep growing their brand value and user bases? We’ve got some ideas.
3 Lingoda Brand Lessons to Borrow
From the onset, Lingoda was careful with picking its battles. They avoided positioning their brand
as a direct competition to language learning apps. Instead, their
unique sales proposition (USP) was perfectly tailored to one receptive
and profitable target audience — the busy working professionals, serious
about mastering a new language fast.
Their main brand differentiators reflect that. Lingoda is the only language school offering 450,000 live classes per year at any time of the day (or night).
Also, by choosing to segment their brand marketing,
the team avoided costly competition for other demographics such as
college students or hobby learners — already bombarded with pitches from
other language learning apps.
By choosing to focus on one major
customer segment, Lingoda managed to ensure steady growth numbers,
thanks to a solid performance at the lower stages of the brand funnel — brand consideration and brand preference.
At
the same time, they are very lean in their process and creative with
their marketing. So there are several lessons other brands could borrow
from them.
1. Use Gamification for Customer Retention
Usage of language learning apps increased during the pandemic. According to Duolingo, some 30 million people attempted to learn a new language on their app in 2020.
But how many people maintained their learning streak for 6+ months and turned into paying customers? As one informal survey of Duolingo users found, the overall completion rate for Spanish courses was less than 0.01%.
New
customer acquisition can leave a big dent in your marketing budget. A
lot of language students get disengaged midway and drop their studies.
That’s why Lingoda goes at length to retain as many people as they can —
and they worked out a very cool, gamified strategy for that. It
includes:
Marathon courses — special 3, 6, or 12-month learning courses with a cashback reward of €50 to €1000 if the student attends 90% of classes.
Language Sprint
— a quarterly promotion event, based on the “challenge” concept. If you
take a 3-month Language Sprint learning challenge, you can get up to
100% of the course cost refunded to you.
Lingoda
heavily promotes both reward schemes via influencers marketing — one of
their pillar activities — mainly via expat and travel bloggers/vloggers.
The Takeaway:
For many language learning products, user retention is a problem as
people lose motivation halfway through. You may try to win people back
with repeating email nudges or small time-sensitive discounts — but
that’s what every product does.
Lingoda, however, decided to try a
more daring strategy. Their rewards system bolsters our natural
competitiveness and then slaps an attractive cash reward on top — and
this approach works for them.
2. Build Your Marketing Based on Customer Knowledge
Lingoda was founded with a clear brand mission:
“We aim to empower even the busiest people to master a language anywhere, anytime.”
By “the busiest people” Lingoda assumes two types of targets:
Adult professionals (over college students or leisure learners), who want to achieve specific professional goals.
Expats who want to feel more integrated within a host country, move abroad, or gain more self-confidence at work.
It
follows that most of their brand marketing is centered on increasing
brand awareness among these targets and communicating the main brand
advantages to them.
Influencer marketing is their go-to strategy for that. If you follow any expat YouTubers, you’ve probably seen a Lingoda ad insert more than once.
Continue reading: Youtube - Love Lingoda?
