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A Growth Spurt in Customer Acquisition | ClassPass Case Study | Singapore

A Growth Spurt in Customer Acquisition

How we generated a 50% increase in new sign-ups for ClassPass!

A Growth Spurt in Customer Acquisitions

How we generated a 50% increase in new sign-ups for ClassPass!

The Scope

If you’re a fitness enthusiast, you’ve probably heard of ClassPass. As of January 2020, ClassPass has moved into unicorn territory with a valuation of over USD 1 billion. The idea is simple, a membership program for fitness classes across multiple gyms and studios; making working out more accessible.

In 2018, ClassPass first launched in Singapore and shortly afterwards in September 2019, they appointed ADA as their APAC digital agency.
Initially, we had no trouble acquiring consumers at an exponential rate. The idea of not having to commit to a single gym appealed to a huge number of fitness focused Singaporeans, alongside the novelty factor of trying out a newly trending app.

But a year later, it seemed that ClassPass had hit a plateau in terms of new customer acquisition.

Soon, we had to solve one of the most frequently recurring problems in advertising: How to sustain our growth momentum without substantially increasing our advertising budget?

classpass-logo

The Aha! Moment

After a thorough inspection of our existing customer acquisition strategy and value proposition; our team of data analysts, marketing technologists and performance marketing experts made an insightful discovery.

Almost all of ClassPass’ advertising budget and activities were directed at getting instantaneous results and quick-wins. This approach works great when people are already familiar with the brand, or are already in the consideration stage, but this pool of audience quickly dries up without brand building.

For most DTC brands and especially so for ClassPass whose subscription expires monthly, user acquisition is tracked daily, weekly and monthly. Marketing efforts are expected to yield instantaneous results. Naturally, ClassPass relied on running short-term performance marketing campaigns to drive immediate user acquisition, but rarely top of funnel (TOF) activities to drive brand building. This was a tactic that worked well for them in the first year.

However, this short-termism is often detrimental to a brand’s health and equity in the long run as it undermines the value of the brand itself. We saw this happen with ClassPass. After the initial surge in customer acquisition in the first 12 months, our bottom of funnel (BOF) audience pool began to dry up because of the lack of upper funnel marketing or branding efforts to prospect new audiences. This led to a plateau of new user acquisition.

We knew that moving budgets to brand activities could diminish new acquisitions in the short run, which ClassPass couldn’t afford as they were still a relatively new player in the market.

We had to tackle the challenge by running an awareness campaign, whose success would be measured not just by impressions or clicks; but through customer acquisition.

In other words, we had to run a “Top of Funnel” (TOF) campaign, that would directly impact the “Bottom of Funnel” (BOF). A tricky thing to do in any given scenario, but not impossible when you’re backed by a strong data-driven attribution model.

The Strategic Approach

The first thing on our “to-do” list was to shift our communication from “quick-wins” to creating brand awareness amongst an untapped audience. At the same time, using an end-to-end framework to make sure that this awareness campaign drove results. We needed an attribution model that would reward the right kind of brand engagements. This called for a shift from last-click attribution, to a more holistic approach.

For those unfamiliar with different types of attribution model in digital marketing, last click attribution is a model that attributes a sales, sign-up, or successful outcome to the last ad clicked. But in most real life scenarios, consumers often interact with multiple touchpoints before they actually sign up for a product or service.

Last click attribution does not account for generating awareness, interest, or desire – which are prerequisites to consumers performing an action, especially found on social platforms. Other attributions like ‘First click’ was also not suitable for the same reasons. Every engagement had different impact to user acquisition so ‘linear’ attribution didn’t provide justice either

With our new top down approach, we looked to pivot to a more sophisticated positional-based attribution model where every engagements’ impact was accounted for:

  • 40% credit to first touch (awareness, interest, desire)
  • 40% to the last touch (conversion)
  • and 20% to all touchpoints in between

to ensure holistic measurement of all activities

By moving up the funnel with a broad audience prospecting strategy and adopting a more accountable positional attribution model, we completely discarded the short-termism syndrome, enabling brand awareness to feed customer acquisition and for ClassPass to experience a new growth spurt in user acquisition!

The Results

50%

INCREASE

Customer Acquisition

50% increase in new customer acquisition as a direct result of the branded campaigns

30%

SAVINGS

Cost-per-acquisition

The cost of acquiring each customer was lowered by 30%

22%

INCREASE

Brand Awareness

After 3 consecutive months of stagnancy before the campaign, ClassPass experienced a 22% increase in branded searches in January 2020

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