Article source: romiman.com
- Source data
- Optimization and conclusions on C1
- Conclusions on C2
“X” is a SaaS for car services and car shops (4000+ SMB clients). The company has been operating on the market for 10+ years. Product prices are average for the market. The product’s functionality is more extensive than most competitors. The analyzed period is from 1.07.2019 to 01.02.2020. The analyzed traffic source is an advertising campaign in Yandex.Direct.
To analyze the results, we used the Yandex Direct interface, the Roistat end-to-end analytics service, and our own CRM.
I started working with Yandex Direct advertising campaigns from 01.10.2019. From 1.07.2019 to 01.10.2019, the campaigns were conducted by an advertising agency and the company’s own forces. Like any other SaaS, we have several funnel stages. The first is a free registration in the service for a trial period (C1), the second is a conversion from a free trial period to a paying customer (C2).
First, let’s look at the first step of the funnel (C1), see what results were obtained and what was done for this purpose. As we can see in the table below, the lead price from October to February fell by 1.5-2 times, while the number of leads increased by 1.5 times.
Results of work on indicator C1
What was done to achieve this result?
1) Campaigns were launched in the Yandex partner network with an accurate message for the target audience, which attracted new target users and cut off non-target users.
2) Search campaigns have been optimized at the ad group and bid level, and some keywords have been disabled.
3) New search campaigns have been created with semantics built from scratch, as well as a banner on the search.
4) Periodic optimization of advertising campaigns at all levels when a sufficient number of clicks are collected.
Let’s compare our indicators with benchmarks for SaaS services. The study was conducted by Totango 1in 2012.
SaaS service benchmarks
We should focus on the «no credit card» column, i.e. 10%. Our conversion rate to the free trial is 5.6%, but this is not a reason to get upset, that’s why:
1) The Totango study was conducted in 2012. in 2019-2020, competition between SaaS services in this segment increased, and therefore conversions decreased.
2) Reduced growth of the Russian economy.
3) In the study from Totango, nothing is said about the cost of the lead, they only considered the conversion rate.
4) “X” company operates in the Russian market, it is less solvent and developed than western markets.
Now let’s look at step C2 – conversion from a free trial to a subscription. We are interested in the cost of conversion, conversion rate and number of conversions, as well as ROAS (ROI). We determined these parameters using the Roistat end-to-end analytics service
Ad campaign results in the end-to-end analytics service (sessions, trials, sales)
We see that the number of sales increased by 41%. The conversion rate from trial to paid subscription is 5.7%. The conversion rate from a session to a paid subscription is 0.31%.
Ad campaign results in the end-to-end analytics service (revenue, expenses, ROI)
Revenue increased by 2 times. ROI increased by 49%. Expenses increased by only 5%.
What conclusions can we draw from the second step of our funnel?
1) Both conversions (free to paid and end-to-end conversion) are 3-4 times lower than the benchmarks for the same reasons as in the C1 conversion.
2) I think that we did not improve the communication between the sales department and marketing. The company structure is designed so that I did not have close communication with sales managers and I could not influence the product sales process. Communication might have been easier if the sales and marketing departments were located in the same city, or if the company’s communication and decision-making structure had been changed. There is great potential for growth here.
3) It is important to note that we managed to significantly increase revenue and ROI. When estimating ROI (-1.1%), it is important to understand that this is the ROI of the first sale. The unit economics (LTV, retention, churn, contribution margin) should be considered separately, taking into account the costs of sales managers. Looking ahead, I want to say that these indicators have also improved.