The Segment Based Acquisition Model
When new territories requires a new on the go growth strategy
Growing into new territories is a big challenge for any company and 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 SAS 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 the acquisition with high CAC (Customer Acquisition Cost) and low revenues, the company understood that the core need of the expansion is to improve the acquisition strategy to ensure solid stable growth.
Large enterprises in one specific geographic area tend to share common practices and thus common needs, but in the case of SMB's from all across the globe, customizing is needed, as different SMB's have specific needs and limited resources. Raven's review of the data brought to the conclusion that in order to stay ROI, positive customization for each customer and a CAC/LTV optimization strategy needs to be implemented during the lead stage.
For this specific case, Raven's customer segmentation and financial predictions allowed the company to engage in a risk management approach that will achieve the optimization of the acquisition process. To ensure a step by step growth, Raven classified each SMBs, undertaking financial prediction while evaluating the early stage of the process and the revenue from the type of client and thus optimizing the acquisition.
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.