Crafting a Growth Loop

Craft Snacks: User Acquisition and Growth Plan

Overview

• Inspecting the Landscape
• Business Goal and Product Strategy
• Growth Components and Metrics
• Target Personas
• Mapping Out the Path to Growth
• Growth Problem Framing
• The Growth Loop
• Growth Hypotheses
• Validating the Path to Growth
• A/B Testing Plan
• Analysis and Next Steps
• Developing the Future Growth Vision
• Growth Risks
• Product Market Expansion Opportunity
• Growth Loop Expansion

Inspecting the Landscape

Growth Components

Growth Components Along the User Journey

Growth Metrics

• Primary Metric
• Month-Over-Month Growth in new monthly subscribed users
• Secondary Metrics
• Upstream
• New Visitors Conversion Rate (3%)
• New Visitor Sessions (70,000/m)
• Number of posted product reviews
• Downstream
• Newly Monthly Subscribed Users (2100/m)
• Monthly Active Users (MAUs) 30%

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Target Persona

1. Existing Customers

1. Passion for new experiences and appreciation of the element of surprise
1. ”They often describe how they look forward to crafts snacks and its’ element of surprise”
2. Motivation and excitement to share their experience on social media for “Their” social network
• 36% of customers posted pictures on social media not on crafts snacks website
3. Motivation to re-purchase their favorite snacks from other sources
• 45% of customers have taken some action to try to obtain their favourite snacks from local stores or other online channels

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2. Potential New Customers

1. Motivation to try the concept and interest in value proposition
1. ”I am interested in trying out news snacks”
2. ”the website looks really fun and piqued my interest”
2. Uncertainty about product quality and brand commitment
• ”What if order doesn’t arrive?”
• “What if the snacks is poorly packaged?”
3. Fear of not being able to select the specific snacks in the box
• ”What if I don’t like the majority of snacks in the box

Key Characteristics

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Mapping Out the Path to Growth

Growth Problem Framing

How can we leverage existing resources and the value it unlocks to overcome hurdles and achieve our goal?

The Growth Loop

���More users subscribe to crafts snacks

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New users love their snacks box and want to share with social network

New users are incentivized to share on social media with a discount promo-code for his network to try out. They will also get the same discount percentage on their next month.

Customer’s social network will trust the brand and would like to utilize the promo-code for a discount so they will visit the website

Product Feature

• Referral program for existing users to attract new users and get rewards for themselves and their friends

The Growth Loop: Hypotheses

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���More users subscribe to crafts snacks

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New users love their snacks box and want to share with social network

New users are incentivized to share on social media with a discount promo-code for his network to try out. They will also get the same discount percentage on their next month.

Customer’s social network will trust the brand and would like to utilize the promo-code for a discount so they will visit the website

Primary Hypothesis

• Referral program for existing users to attract new users and get rewards for themselves and their friends

When users receive their first order, they will actually like it and find it valuable.

When users like the order and find the sharing incentive, they will share it with a unique promocode on their social media platforms

When potential users find their friends post and promo-code, they will check crafts snacks landing page

When users understand crafts snacks from landing page, they will subscribe

Growth Hypotheses

Primary Hypothesis

• Allowing the user to share a post of his order and a discount promo-code will make potential customers from his social network to trust the brand and use the promo-code which will make more users subscribe to crafts snacks

Secondary Hypotheses

1. When users receive their first order, they will actually like it and find it valuable.
2. When users like the order and find the sharing incentive, they will share it with a unique promocode on their social media platforms
3. When potential users find their friends post and promo-code, they will check crafts snacks landing page
4. When users understand crafts snacks from landing page, they will subscribe.

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Validating the Path to Growth

A/B Testing: Goal and Metric

• Primary
• Does allowing customers to share a post with a unique discount promo-code make potential customers from his network to trust the brand and want to use the promo-code which leads to new customers subscribing to crafts snacks?
• Metric: Newly Monthly Subscribed Users
• *Secondary
• Will customers like our product when they receive their order and find it valuable?
• Metric: Churn Rate
• Rationale: If new users don’t like the product, they will cancel their subscription and churn.
• Will customers want to share on social media a post on their first order along with unique promo-code when they find about this feature?
• Metric: Percentage of users who used the social media sharing feature
• Rationale: This metric will let us know if customers were incentivized to share on social media or not.
• Will potential customers decide to visit crafts snacks landing page when they see their friends’ shared posts?
• Metric: New visitor sessions
• Rationale: This metric will allow us to see if there is a significant growth in average new monthly session due to the new feature and growth loop
• Will new visitors subscribe on crafts snacks when they further understand the brand and value proposition on the landing page
• Metric: New visitor conversion rate

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* If the primary hypothesis was proven wrong, we need to examine our secondary hypotheses to know where along the loop did we form a wrong hypothesis

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A/B Testing: Audience and Setup

Test Setup

• A. Control – Existing customers who engage with the product as-is. When they check crafts snacks, they can only write product reviews for crafts snacks team and other users who check the product as well. However, they cannot share on social media through crafts snacks or obtain a promo-code to distribute. �
• B. Variant – Existing customers who will find a feature that allows them to share a post on their preferred social media channel with a unique promo-code, pictures of their selection and caption about their experience.

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Test Audience

• Target Audience: Existing Customers
• Rationale: This growth loops leverage the motivation and appetite for existing customers to share about their experience to their social networks.

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A/B Testing: Risks

• Risk: User experience that creates friction in the social media sharing feature
• Mitigation: Invest in user experience design and user testing to validate the final UX and UI design. �
• Risk: Leakage and over-use of the promo-codes
• Mitigation: Each unique promo-code has a specific number of utilizations. The specific number is communicated for existing customers when they are using the share feature. �
• Risk: Users who want to share on social media without using crafts snacks share feature but still want to obtain a unique-promocode to distribute.
• Mitigation: Users can decide to request a unique promocode without sharing directly through crafts snacks website.
• Risk: Control Group (A) who don’t have access to this feature might get upset.
• Mitigation: Email notification for all existing users about the beta trial. Expectation management that if the experiment was successful, it will be accessible for all existing users.

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Analysis and Next Steps

• If the experiment succeeds, what we expect to see: A) MoM growth in new monthly subscribed users, B) increased activity of sharing on social media.
• Next steps
• Conduct further analysis to separate the impact of the social media sharing with and without adding an incentive discount promo-code.
• Conduct an analysis to see the average new acquisitions per 1 existing user.
• Calculate the viral coefficient
• Explore other features that might improve and builds on the momentum of the growth loop.
• If the experiment fails, what we expect to see: A) No significant MoM growth in newly monthly subscribed users, B) since adoption on the share feature was very minimal or C) the shared posts and promo-codes didn’t have an impact on converting potential customers to paid users.
• Next steps
• Look at secondary hypotheses metrics to learn which parts of the loop went wrong
• Create user research interviews with some of Variant Group to understand their experience and user behavior

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Developing the Growth Vision

Growth Risks

• Customer Retention
• Problem: If we can not retain customers, we won’t be able to continue to drive growth.
• Solution: As we continue to acquire more users to sign up, we need to continue to ensure the acquired customers are happily engaged and stay with us and not causing churn.
• Market Saturation
• Problem: Gourmet snacks is an extremely competitive market. While Crafts Snacks is extremely differentiated by focusing on customers who love new experiences and appreciate the surprise element, this differentiation imposes significant risk on market saturation since its scope is limited.
• Solution: Since Crafts Snacks established itself with this customer segment, once it reaches saturation, we should explore either tapping into other customer segments, or developing other offerings for the currently existing customer base, like transaction-based orders for their favorite snacks.
• Single Product and Market
• Problem: Crafts Snacks has only one product which is the snacks box, targeting a specific target segment. Once its growth is limited, crafts snacks must be ready to tap new markets with new offerings.
• Solution: Crafts snacks can explore diversification in markets and offerings to open new business verticals and growth horizontals.

Product Market Expansion Opportunity

Product and Services

Markets

Existing

New

Existing

New

Growth Loop Expansion

���More users subscribe to crafts snacks

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New users love their snacks box and want to share with social network

New users are incentivized to share on social media with a discount promo-code for his network to try out. They will also get the same discount percentage on their next month.

Customer’s social network will trust the brand and would like to utilize the promo-code for a discount so they will visit the website

New users finds specific snacks as their most favourite and want to always have it in their next boxes

New users upgrade their plans to enjoy a plan where they can add extra pieces of their favorite snack

Growth Plan Summary and Rationale

Original Growth Loop

• Focus: Social Media Referral Program, Market Penetration Growth Strategy
• Rationale: Crafts Snacks is doing very good. Existing user base love the product and have an appetite to share it with their social circles[Resource], but potential users find it challenging to trust the brand and product quality[Hurdle]. Referral program could be a great strategy to grow more awareness and achieve better conversion from visitors to subscribers[Goal].

Expanded Growth Loop

• Focus: New Premium Subscription Plan, Product Development Growth Strategy
• Rationale: Existing user base love the product. 45% of existing user base took action to buy their favorite snack from other sources. This is a missing revenue opportunity. While we don’t want to lose our “surprise element” in our product offering, creating a premium plan that allows the users to customize a specific set of add-ons of their most favorite snack, will increase revenues, and it won’t limit scalability. This overall improvement, will create a new growth opportunity and builds on existing growth loop.

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