When new territories require a new growth strategy
Challenge
Growing into new territories is a big challenge for any company. Considering every market behaves differently, the question arises as to what strategy should one use when approaching a new market.
One of Israel's leading Adtech unicorns, with an established presence in the US, was looking to grow outside of that territory and to expand its offering for SMBs all over the world.
While at the time, money was spent on high CAC (Customer Acquisition Cost) and low returns. The company realized that the core need of the expansion is to improve the acquisition strategy to ensure solid stable growth.
Idea
Large enterprises in one specific geographic area tend to share common practices and thus common needs. In the case of SMBs from all across the globe, customization is needed - as different countries have specific needs and limited resources. Raven's review of the data brought to the conclusion that in order to stay ROI - positive, each acquisition territory requires a customized strategy in order to allow CAC/LTV optimization.
Solution
For this specific case, Raven's customer segmentation and financial predictions allowed the company to engage in a risk management approach that achieved the optimization of the acquisition process. To ensure a step by step growth, Raven classified each SMB by its specific parameters to create customized LTV prediction and enable acquisition optimizing.
Growth
Raven's model was developed based on the customer economic behavior and was able to predict accurate LTV for each cluster (which combined data of geography, size of the business, business domain and the lead source). The model was implemented automatically into the company's acquisition tools leading to gain an uplift of 17-19% in net revue, generated from SMB outside of US.