arm yourself with exponea - 7 tips for growth
TRANSCRIPT
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ARM model is a powerful growth hacking tool for e-commerce firms
Acquisition - attract customers, close sale and onboard them
Retention – keep customers coming back
Monetization – increase value you get from customers
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10% improvement in each of ARM metrics leads to 37% cumulative revenue difference in 1 year
Company A Company BUnique visitors / month 100k 100kAcquisition rate 8.0% 8.8%Retention / month 20.0% 22.0%Monetization €50.0 €55.0
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1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
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Use following 7 tips & tricks for ARM improvement
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Track ARM metrics with dynamic dashboards
Performance metrics show ability to meet KPIs
Funnel analysishelps identify flow of customers and bottlenecks
Attribution analysis shows the most efficient channels
Dynamic dashboards
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TRAFFICSOURCE
Organic GooglePPC LinkedIn LeadGeneration Facebook Emailcampaign
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Always observe impact of product changes and marketing campaigns on all 3 ARM components
Activity Acquisition Retention MonetizationStarting base performance 8.0% 20.0% €50.001/16 Improved onboarding + 1.2% + 0.5% + €0.201/16 Retention scenario + 0.6% + 1.0% + €1.702/16 Checkout optimization - 0.2% + 0.7% + €2.002/16 Pricing model test - 0.2% - 1.0% + €0.503/16 New pricing model - 0.6% + 0.8% + €3.0End of period performance 8.8% 22.0% 55.0€… … … …
There is no silver bullet here – Improving ARM is an iterative process
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Use RFM model to easily create 9 unique segments to target …
RFM Model 1/2
GOLDsegment
Recency
Freq
uenc
y x
Mon
etar
y
Rete
ntio
n
Monetization
Churn
Acquisition
Recency – How recently did the customer purchase?
Frequency – How often does he or she purchase from you?
Monetary – How much doeshe or she spend?
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… and combine proper message and channels to improve conversion and LTV/CAC ratio
• Low value segments • Cheap channels
(web, email)• High value segments
• More expensive channels (remarketing, call center)
RFM Model 2/2
Channels Message• Acquisition
• Special offers, branding• Retention
• Incentives, requesting feedback• Monetization
• Up/cross-sell
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Identify improvement areas via funnel analysis of acquisition process
• Shows journey of customers• Allows to see
bottlenecks• Requires proper
set-up
Large drop – potential for check-out process optimization
Funnel analysis
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Use cohort analysis to look at changes in customer behavior over time
Cohort analysis
• Cohort view enables to see trends• Very powerful if
combined with an attribution model
Underperforming groups – possible bad acquisition targeting
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Improve retention via on-boarding email campaign
A Client had KPI 19% for 2nd
week retention rate - a cohort analysis showed slight underperformance
The client decided to bring users back by on-boarding improvement and launched targeted email campaign
With 70%+ open rate and 30%+ click rate significant number, of otherwise lost users, returned to platform
Onboarding campaign
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Track spend distribution to identify core customers and up-sell potential
Monetization
• Identify core customers• Calculate LTV and
CAC ratios• Track
improvement across segments
Number of customers
Monthly spend (€)
Small high-spending groups generate large share of overall revenues
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Key things to remember:
Improving ARM ability significantly impacts business performance
You need to track and measure metrics to identify pain-points
Following 7 tips in these slides will help you grow
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Want to use analytics of fast-growing companies? Visit exponea.com to learn more