Segmentation to uncover growth opportunity

Segmentation to uncover growth opportunity

Mission ChallengeUncovering growth potential through market segmentationLever of GrowthScale & personalisation

About

My name is Florent i am in charge of festicket’s performance marketing & Growth departmentI like start-ups, variables and disagreeing with people.

I always assume that to refine and shape an idea, we need a detractor to provide counter argument and consider even more variables to make this idea better

If i haven’t done a test myself, i have to try it and adapt it to several situations…

What is marketing?

General definition:The action or business of promoting and selling products or services, including market research and advertising.

But… I’ve found 47 variations which have all been approved…

What is marketing?

General definition:

Marketing consists of considering all possible variables around your product in order to promote and sell it to the right audience.

MissionTo provide a hassle-free way to plan your trip to a festival, specially tailored for you.

HowCreate and manage a unique experience via a range of accommodation and travel options.Maximise sales for the festival via our simple booking platform and carefully curated packages.

Festicket

500+ Festivals in 50 countries85% Partners retention rate

A few numbers

2.5xGrowth coef Year on year

10 - 20%Repeat bookingCross tribe

500+Festivals

1,000,000+Subscribers

1,500,000+Unique site visits per months

220,000+Travellers

festivals in

50 countries

users in

100 countries

60,0004,0006006,500

Market Overview:

Simple planGoing for their B founding serie, Festicket wanted to maintain their 2.5x year on year growth coefficient. They were mainly acquiring customers from the UK, who were travelling abroad, with a high ABV.

To ensure this level of growth, they wanted to add several new acquisition channels and implement a more aggressive acquisition structure.

We split our strategy in 2 areas:Influence/Activate & Re-activateFast Acquisition of new users

Current state

The Journey Begins

Starting from scratch- Small amount of data available- Small budget vs audience size- Quick learnings- Reach Low Burn rate quickly- Small tech team already focussing on product development, UX & UI

Analyse your Product and market

Existing Known Variables

- Core Audience is in the UK, travelling around the world- Purchasing mainly packages, at a high ABV & Margins compared to the rest of our inventory- Most of the conversions came from Organic & Iframe- Subject to Strong Seasonality

Define your goals at Short, Medium & long term.Maintain the growth Increase transaction volumeIncrease revenue Monetise the offer inventory

Define the Metrics That Matter

IMPImpressions

CPAcost acquisition

CVRconversion rate

CTRclick through rate

Rep%repeat order

LTVlife time value

CPCCost per click

ABVaverage basket value

IMP shareImpression share

Clicktraffic

BRBounce rate

CSClick Share

Pos/RankPosition

MarginMargin

ROIReturn on investment

ROASReturn on ads spend

G$gross revenue

N$Net revenue

£$€Currency

Define the Metrics That Matter

IMPImpressions

CPAcost acquisition

CVRconversion rate

CTRclick through rate

Rep%repeat order

LTVlife time value

CPCCost per click

ABVaverage basket value

IMP shareImpression share

Clicktraffic

BRBounce rate

CSClick Share

Pos/RankPosition

MarginMargin

ROIReturn on investment

ROASReturn on ads spend

G$gross revenue

N$Net revenue

£$€Currency

Group and correlate them based on your goals

Define the Metrics That Matter

IMPImpressions

CPAcost acquisition

CVRconversion rate

CTRclick through rate

Costrepeat order

LTVlife time value

CPCCost per click

ABVaverage basket value

IMP shareImpression share

Clicktraffic

BRBounce rate

CSClick Share

Pos/RankPosition

MarginMargin

ROIReturn on investment

ROASReturn on ads spend

G$gross revenue

N$Net revenue

£$€Currency

Group and correlate them based on your goals

Define the Metrics That Matter

IMPImpressions

CPAcost acquisition

CVRconversion rate

CTRclick through rate

Rep%repeat order

LTVlife time value

CPCCost per click

ABVaverage basket value

IMP shareImpression share

Clicktraffic

BRBounce rate

CSClick Share

Pos/RankPosition

MarginMargin

ROIReturn on investment

ROASReturn on ads spend

G$gross revenue

N$Net revenue

£$€Currency

Group and correlate them based on your goals

One metric is not enoughOne is not enoughCPA only shows the efficiency of acquisition. If your ABV or margin rises, it allows you to contract a broader audience with the same level of profitability.

A CTR cannot qualify the quality of copy if we don’t consider the CPC, CVR, Position etc.…

A low volume of variables considered may lead to false assumptions

Here is a test that some companies do :- Same traffic- Same conversion rate for each segment, channel country, ….- But… CVR goes down….What is going on?

Own your metrics

Each team work on their specific goal and metrics improvement, and it’s really important that they understand they metrics are build and the multiplicity of variable around it.

Mission

Long term customer focusReason:The core focus of festicket has alway been on their customers and partners, by prioritising fresh and unique content for their festival guides and magazine. Alongside that, it’s about providing a better UX and building trust with every user/customer.

the creation of a performance marketing and growth department was no different. The core idea was to spread that same concept, to make sure that everyone would enjoy the experience of a festival as much as we do.

Starting with a focus on the Market Dynamics-> Pairing market trends, supply, demand to product fit and strategy

Agressive customer acquisition

Reason:Market with limited volume and we needed to increase market share to secure the niche

We required more data in order to define:- Up-selling ability- Repeat booking- Cross-selling opportunities- Ways to increase our active user base- LTV- Pathways to connect and be part of the tribe

Our scaling lever

Launch New Market

Launch New Channels

Optimise performance

Improve productConversion Rate

Improve marginsand ABV

Grow Offer /New Products

Uncovering growth through market segmentation

Deeper look into seasonalityOrder / Time overviewTransaction seasonality yearFluctuation in offer ABV

month / week / day

Deeper look into seasonalityOfferFluctuation in offer MarginFluctuation in offer ABV

seasonality & variables

Different seasonality for volume by Segmentswhile one Market (internal) was going up the other one was going down (external)…we’ve been able to flatten this extreme seasonality by taking a dual approach, and focussing our efforts on each individual segment.

Seasonality in product offeringWe observed a similar inverse correlation between margins and ABV. When one went up (margin) the other went down (ABV).Using this insight, we contracted in specific areas, adapted our offer for each segments, and internationalised our acquisition.

Hyper-segmented Marketing structure

What we were looking forWho are our customers?Do we reach the right audience?Does our offer fit that audience?What drives their purchase intention?Do they behave identically, and with an identical intent of purchase? (search term focus)Are they purchasing the same products type, range, …?

Customer behaviour

Overview & granular view of dataTo understand the market we needed to observe everything at both high and granular level to find the patterns and differences of each segment.So we created a series of clusters, enabling us to aggregate data to act at scale on each of them as soon as the volume of data available made a test relevant.Each cluster contains several segments. By tagging these extensively, we were able to monitor the performance of each one. This meant that we could easily identify patterns and trends on the test and control groups.

Levers of growth

Deeper look into seasonalitySegmentInternal/Domestic External

Let’s Kill TheSeasonality

Focus

internationalisationOpening new internal & external markets

New channelswhere to find more customers of these segments

Grow/Pivot OfferSure but based on the desire and potential of each segment plus a tailored extra offer for them

keep Optimised channelscan we find new segment within each cluster? different purposes for different device?

why?

Easier and faster to implement than educating a market.

Pivoting based on segments

Geo-segmentation showed different behaviour by segment as well as different intents.We pivoted our approach based on distance from the festival location.

looking at the short funnel from paid acquisition we realised that we could reuse a piece of content (unseen) to re-engage our customersWe flipped the process from ‘discover and book’, to ‘book and be immersed in the festival experience right now.’ We feed information and content to our customers to keep them active in our ecosystem.

Paid Acquisition

Modelling and forecasting, based on segments- Each segment had different growth goals and optimisation phases, aimed at bringing the most out of each

audience.- Knowing segment behaviour allowed us to generate growth in each one of them.

Budgeting wisely and adapting over time- Burn rate Budget management.- Create a model of the burn rate potential, based on seasonality and growth need.

Channel & audiences

Decrease CVR

Max CPA

Max Audience

Affordable Audience

Core Audience

Increase CPA

CPC=CPA

Channel Detail

2% CVR

CPC=CPA

Max CPA

100% CVR

Max Audience

1000 Users

50 UsersLong Tail

Channel multiplicity

Paid Search GSPSocial

10000u2%

1%3% CVR 1000u

20000u

Channel multiplicity & Segments

Display Paid Search GSP Social Mobile Search

Display Paid Search GSP Social Mobile Search

Internal Internal InternalInternal

Internal

External External External External External

Deeper look into seasonalitySegmentInternal/Domestic External

Let’s Kill TheSeasonality

Deeper look into seasonalityOrdersinternalexternal

Deeper look into seasonalityOrder / Time overviewOrder seasonality year month / week / day

Learnings

Offer impact and Offer QS

An incomplete offer can still sellAs a package provider, we were activating product sales with packages only. This is very profitable, but a package sale can also be done through up-selling system.

Good News

Each Segment was profitableLooking deeper into the the clusters created by segmenting the market, we found that the market was operating a flip between travel flow.

At first we underestimated the importance of the internal / domestic market that could be activated if we pivoted our approach to product offerings.

Good News

It’s always summer somewhereThe Seasonality has a deep impact on our business and the internationalisation. Improving any or all of our metrics could also fight and flatten that seasonality.

In between scale and personification

plan the future

Howprepare your metricsWhat will happen once i found insights from my testHow will it be integrated into my current strategyhow will I action it?how and where to scale?

refine and scale

HowDefine hypothesis based on data insightsIdentify Metrics that matter for the testAssemble resources and teamchoose your Audience and identify the control and test groupA/B test your hypothesisMeasure the impactScale or OptimiseRepeat

ready to scale & optimise

find the patternsAcross different segments there may be similarities. Scale your best practices to each segment.

find their differencesCreate and manage a unique experience via a range of accommodation and travel options.Increase sales for the festival via our simple booking platform and carefully curated packages.Replicate based on cluster and group.

Time is a rare value and repetitive tasks kill you

AutomationAs you grow your channels and segment, the time to manage everything becomes a rare thing. Stopping the multivariate A/B testing will stop the feed of data which will stop you getting better results.

create new metric to improve your reactivityProduct/offer quality score will help you to forecast and identify your performance.(larger offer, type, … shorts, colours, length, brand, price, delivery option, availability…)

Thank you

Phone(0)20 3397 8486

Emailflorent@festicket.com

Twitter@unfilsdepub

www.festicket.com