ARM yourself with Exponea - 7 tips for growth
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Transcript of ARM yourself with Exponea - 7 tips for growth
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
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
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
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