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Driving Customer Acquisition and Growth with Experimentation
The document highlights ClassPass' use of an iterative, minimum viable product (MVP) approach to optimize customer acquisition and growth through numerous optimization tests. It shares insights on emphasizing conversion rate optimization (CRO) principles across various company departments while discussing the impact of a recent re-engagement optimization effort that improved reactivation rates but increased customer acquisition costs. The session concludes with a call for feedback and networking opportunities at the conference.
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Driving Customer Acquisition and Growth with Experimentation
- 1. Congratulations to our OutperformAward Winners! Most Dramatic Business Impact Most Customer- Obsessed Company Culture Most Transformative Innovation Most Inspiring Social Impact
- 2. 2 Welcome toDay 2 of Opticon! Sessions will be recorded and available after Opticon Share your feedback and rate sessions on the mobile app
- 3. Nina Bayatti Conversion MarketingManager, ClassPass Driving Customer Acquisition & Growth with Experimentation
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- 5. 5 Agenda ClassPass’ iterative,minimum viable product (MVP) approach to testing Demystifying conversion rate optimization (CRO) Applying CRO principles company-wide Q&A
- 6. 6 ClassPass is the largeststudio fitness aggregator
- 7. 7 We’re not justtesting new fitness classes. In 2018, we ran over 150 optimization tests company-wide.
- 8. 8 How did werun 150 optimization tests company-wide?
- 9. 9 Build minimum viable product(MVP) • How can we test this idea in a low-lift, high- impact way? • De-risk resource investment • Maintain high test velocity Boost test velocity & de-risk resources with an iterative, MVP approach
- 10. 10 Build minimum viable product(MVP) • How can we test this idea in a low-lift, high- impact way? • De-risk resource investment • Maintain high test velocity Launch & monitor • Ask CX team to flag test-related outreach • Monitor web behavior & analytics Boost test velocity & de-risk resources with an iterative, MVP approach
- 11. 11 Build minimum viable product(MVP) • How can we test this idea in a low-lift, high- impact way? • De-risk resource investment • Maintain high test velocity Launch & monitor • Ask CX team to flag test-related outreach • Monitor web behavior & analytics Iterate & re-launch • Anticipate 2-3 iterations ahead • Continue to utilize MVP-first approach • Utilize initial test data, customer feedback & web analytics Boost test velocity & de-risk resources with an iterative, MVP approach
- 12. 12 Build minimum viable product(MVP) • How can we test this idea in a low-lift, high- impact way? • De-risk resource investment • Maintain high test velocity Launch & monitor • Ask CX team to flag test-related outreach • Monitor web behavior & analytics Iterate & re-launch • Anticipate 2-3 iterations ahead • Continue to utilize MVP-first approach • Utilize initial test data, customer feedback & web analytics Productize • Share learnings • Consider impact when allocating resourcing for productization build Boost test velocity & de-risk resources with an iterative, MVP approach
- 13. 13 Demystifying CRO: Beyondthe CTA color test
- 14. 14 Understanding down- funnel impactof your CRO initiatives
- 15. 15 • Bounce rate •Click through rate • Pageviews • Lead captures • Purchase conversion rate Your primary KPI is not telling the full story
- 16. 16 Reach a confident conclusionwith down- funnel data • Quality of leads • Duration of sales cycle • Customer acquisition cost • Operational cost • Customer retention rate • Bounce rate • Click through rate • Pageviews • Lead captures • Purchase conversion rate Your primary KPI is not telling the full story
- 17. 17 Measuring the down- funnelimpact of our re-engagement optimization
- 18. 18 We tested extendingour winback offer • Winback offer serves as a re-trial period for inactive members • Inactive members can experience new product features & newly added classes • Tested extending winback offer period from 1 to 2 weeks
- 19. 19 We tested extendingour winback offer Hypothesis: If we extend our winback offer from 1 to 2 weeks, then our reactivation rates will increase because members will have more time to experience new features and classes. And the lift in reactivations will offset the costs of the increased duration of the free offer.
- 20. 20 Extending our winbackoffer lifted our reactivation rate by 25% Reactivations +25% ReactivationCVR B: Extended OfferA: Control
- 21. 21 Despite the liftin reactivations, our marginal acquisition was not cost-effective Control Extended Offer Delta Reactivations* 100 125 +25% CVR Cost of Goods (COGs) $15,000 $24,375 +30% (increased usage) Retained Members 80 95 -5% CVR Customer Acquisition Cost $187.50 Marginal CAC $625 > ⅓ Lifetime Value (LTV) *Reactivation counts are illustrative to better highlight the impact of the purchase CVR, retention CVR and increased cost of the offer.
- 22. 22 Identify & iteratedown-funnel levers How can we maintain the 25% reactivation CVR lift while . . . • reducing COGs incurred • maintaining retention rate so that we can ultimately reach a cost- effectively increase acquisitions? Delta Reactivations* +25% CVR Cost of Goods (COGs) +30% (increased usage) Retained Members -5% CVR Customer Acquisition Cost Marginal CAC $625 > ⅓ LTV
- 23. 23 Marketing • Find optimalchannels of acquisition • Personalize experiences across touchpoints • Optimize web to help educate, inspire & convert Finance Apply CRO principles company-wide
- 24. 24 Marketing • Find optimalchannels of acquisition • Personalize experiences across touchpoints • Optimize web to help educate, inspire & convert Customer Experience • Find methods of reducing customer confusion • Determine optimal methods of communication with customers Apply CRO principles company-wide
- 25. 25 Marketing • Find optimalchannels of acquisition • Personalize experiences across touchpoints • Optimize web to help educate, inspire & convert Customer Experience • Find methods of reducing customer confusion • Determine optimal methods of communication with customers • Merchandise effectively • Develop optimal subscription plans • Understand acquisition curve Finance Apply CRO principles company-wide
- 26. 26 Marketing • Find optimalchannels of acquisition • Personalize experiences across touchpoints • Optimize web to help educate, inspire & convert Customer Experience • Find methods of reducing customer confusion • Determine optimal methods of communication with customers • Merchandise effectively • Develop optimal subscription plans • Understand acquisition curve Product • De-risk negative impact of new product feature • Determine acquisition gains Finance Apply CRO principles company-wide
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- 29. Head tothe Expo Hall for morning refreshments Up next…Ravi Parikh, co-founder of Heap at 11:15am!