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ARM yourself with Exponea - 7 tips for growth

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Page 1: ARM yourself with Exponea - 7 tips for growth
Page 2: 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

Page 3: ARM yourself with Exponea - 7 tips for growth

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

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

1 2 3 4 5 6 7 8 9 10 11 12

Page 4: ARM yourself with Exponea - 7 tips for growth

Use following 7 tips & tricks for ARM improvement

Page 5: ARM yourself with Exponea - 7 tips for growth

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

1

TRAFFICSOURCE

Organic GooglePPC LinkedIn LeadGeneration Facebook Emailcampaign

Page 6: ARM yourself with Exponea - 7 tips for growth

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

2

Page 7: ARM yourself with Exponea - 7 tips for growth

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?

3

Page 8: ARM yourself with Exponea - 7 tips for growth

… 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

3

Page 9: ARM yourself with Exponea - 7 tips for growth

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

4

Page 10: ARM yourself with Exponea - 7 tips for growth

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

5

Page 11: ARM yourself with Exponea - 7 tips for growth

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

6

Page 12: ARM yourself with Exponea - 7 tips for growth

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

7

Page 13: ARM yourself with Exponea - 7 tips for growth

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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2

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Page 14: ARM yourself with Exponea - 7 tips for growth

Want to use analytics of fast-growing companies? Visit exponea.com to learn more