{"id":22317,"date":"2022-04-07T21:14:11","date_gmt":"2022-04-07T15:44:11","guid":{"rendered":"https:\/\/www.instamojo.com\/blog\/?p=22317"},"modified":"2022-04-08T16:50:50","modified_gmt":"2022-04-08T11:20:50","slug":"using-data-to-design-experiments-and-refine-business-strategy-at-instamojo","status":"publish","type":"post","link":"https:\/\/www.instamojo.com\/blog\/using-data-to-design-experiments-and-refine-business-strategy-at-instamojo\/","title":{"rendered":"Using data to design experiments and refine business strategy at Instamojo"},"content":{"rendered":"

Having spent nearly a decade in analytics and data science, I have worked with a large variety of business stakeholders across sales, marketing, risk and product in various industries. <\/span><\/p>\n

And what I have noticed is, as businesses make efforts to become more data-driven, <\/span>access to data and tooling around data have improved significantly but conceptual frameworks for leveraging data to guide decision making are still very ad hoc and subjective in nature.<\/strong><\/span><\/p>\n

This often creates situations where data plays a very peripheral role, giving businesses the illusion of being data-driven – monitoring KPIs and conducting superficial analysis on high-level metrics without considering causal effects or rigorously testing hypotheses.\u00a0<\/span><\/p>\n

Analysts will often be looped in to conduct analyses on a new product or feature after it has already been launched, leading to poorly designed soft launches that are conducted in a way that cannot answer the key questions required to scale the product or feature.\u00a0<\/span><\/p><\/blockquote>\n

Beta testing<\/strong> a new feature with your most active or high-value customers, for example, is a common practice – this ensures adequate usage of the feature, but gives you no information about the right target market, the potential size of the market or scaling strategies for the feature, as the audience is biased and any analysis or KPIs measured would not generalize across your customer base. <\/span><\/p>\n

My aim here is to use our marketing efforts at Instamojo as a case study to illustrate a framework for businesses to use in their decision making.<\/strong><\/span><\/p>\n

Think of product development\/marketing\/sales\/etc. as a series of experiments that are designed to answer key questions that will continuously refine business strategy and guide their next set of experiments.<\/span><\/p>\n

Key components of an experiment\u00a0<\/b><\/span><\/h2>\n

Whether we are talking about a marketing campaign or a new product or even a simple UI revamp, there are 3 key components to any business decision –<\/span><\/p>\n

    \n
  1. Objective<\/b> – what do we hope to achieve by doing this?<\/span><\/span><\/li>\n
  2. Success criteria & key metrics<\/b> – what key metrics need to go up or down to achieve this objective?<\/span><\/span><\/li>\n
  3. Movable levers<\/b> – what levers do I have at my disposal to optimize for these metrics?<\/span><\/span><\/li>\n<\/ol>\n

    Let us now define the above for our marketing efforts around MojoCommerce. <\/span><\/p>\n

    First, some context on MojoCommerce – Instamojo offers solutions to businesses running online stores – store building and hosting, payments, CRM and a simple UI, all packaged in a single platform – (MojoCommerce).\u00a0<\/strong><\/span><\/p>\n

    It is a freemium model where businesses can try the product out for free and build out a basic store, but to access the full suite of solutions, there are premium plans that have a monthly\/annual subscription fee.<\/span><\/p>\n

    Sign up for your own free online store or the premium version that starts at just \u20b910\/day!<\/a><\/p>\n

    Our digital marketing campaigns aim to spend money on Instagram and Facebook advertising in order to acquire businesses that show true intent, to build their store on MojoCommerce and upgrade to premium plans<\/strong>. So let’s dive in.<\/span><\/p>\n

    Objective<\/strong><\/span><\/h2>\n

    To develop a sustainable customer acquisition strategy for MojoCommerce – create Ads, spend money to get leads, and the sales team contacts these leads to guide them and convert them to premium plan customers.<\/strong><\/span><\/p><\/blockquote>\n

    Success Criteria & Key Metrics<\/b><\/span><\/h2>\n

    Cost per Upgrade – <\/b>this is the primary metric of interest as the holy grail of these campaigns would be to acquire premium users at a cost that is lower than the revenue generated through premium subscriptions<\/span><\/span><\/p>\n

    This is however a composite metric that appears at the end of a longer funnel. <\/span><\/p>\n

    The funnel looks like this –\u00a0<\/strong><\/span><\/h4>\n
      \n
    1. Cost per click<\/strong> – Are users attracted to the Ads they see?<\/span><\/li>\n
    2. Cost per signup<\/strong> – Are the landing pages inspiring them to sign up?<\/span><\/li>\n
    3. Cost per Upgrade<\/strong> – Are we convincing them of the value of our premium offerings?<\/span><\/li>\n<\/ol>\n

      Movable levers<\/b><\/span><\/h2>\n

      When we say movable levers – we are referring to the aspects of our marketing strategy that are <\/span>in our control.\u00a0<\/b><\/span><\/p>\n