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Unlocking growth: Four key levers for fast-growing DTC brands

by Guest Author in August 11th, 2023

As entrepreneurs and marketers, we are constantly striving to scale our Shopify stores and achieve sustainable growth. In the highly competitive digital landscape, understanding the levers that drive growth and the metrics that guide our decision-making is crucial. In this article, we will delve into the four growth levers we focus on at ROAS Expert, a startup-friendly growth marketing agency, and explore the metrics that help us determine the necessary changes for our clients. By leveraging these insights, you can supercharge your growth strategies and maximize your return on ad spend (ROAS). 

1. Acquisition

Acquisition is the first and perhaps the most crucial growth lever for any Shopify store. It involves attracting new customers and expanding your brand's reach. To determine the effectiveness of your acquisition efforts, consider the following metrics:

a) Cost per Acquisition (CPA)

This metric helps you understand how much you're spending to acquire each new customer. By optimizing your marketing channels and campaigns based on CPA, you can maximize your return on investment (ROI) and focus on the most cost-effective channels.

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b) Customer Lifetime Value (CLV)

CLV quantifies the total value a customer brings to your business throughout their relationship with your brand. By understanding the CLV, you can make informed decisions about customer acquisition costs, retention strategies, and customer segmentation.

c) Conversion Rates

Monitor conversion rates at different stages of the customer journey, such as landing page visits, email sign-ups, and completed purchases. Identify bottlenecks in the conversion funnel and optimize them to improve overall acquisition performance.

2. Activation

Once you've acquired new customers, the next growth lever is activation. Activation refers to the process of turning new customers into active users or paying customers. Here are some key metrics to consider:

a) Activation Rate

This metric measures the percentage of new users who successfully complete the desired action, such as making a purchase, subscribing to a service, or engaging with your platform. Identify the points in your user journey that lead to higher activation rates and optimize them to boost conversion.

b) Time to First Value

This metric reflects the time it takes for new customers to experience the value your product or service offers. By reducing the time to first value through effective onboarding and personalized experiences, you can increase customer satisfaction and retention.

c) Retention Rate

Retention rate measures the percentage of customers who continue to use your product or service over a specific period. Understanding why customers churn and implementing strategies to improve retention will increase the lifetime value of your customers and drive sustainable growth.

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3. Revenue

Revenue growth is a fundamental objective for any Shopify store. To maximize revenue, you need to focus on increasing average order value (AOV) and maximizing customer lifetime value. Consider the following metrics:

a) Average Order Value (AOV)

AOV measures the average amount customers spend in a single transaction. By encouraging customers to add more items to their cart, offering upsells and cross-sells, and optimizing pricing strategies, you can drive higher revenue per order.

b) Repeat Purchase Rate

This metric measures the percentage of customers who make multiple purchases from your store. Encouraging repeat purchases through personalized offers, loyalty programs, and exceptional customer experiences will significantly impact your revenue growth.

c) Gross Margin

Understanding your gross margin helps you optimize your pricing strategy, manage costs, and identify opportunities to increase profitability. By monitoring and improving your gross margin, you can make data-driven decisions that impact your bottom line positively.

4. Referral

Referral marketing is a powerful growth lever that harnesses the influence of satisfied customers to acquire new ones. Encouraging customers to refer your brand to their network can drive exponential growth. Consider these key metrics:

a) Net Promoter Score (NPS)

NPS measures customer satisfaction and loyalty. Satisfied customers are more likely to refer your brand to others. Monitoring your NPS and implementing strategies to improve it will increase your chances of organic growth through referrals.

b) Referral Conversion Rate

This metric tracks the percentage of referred customers who convert into paying customers. By optimizing your referral programs and incentives, you can increase the likelihood of converting referred leads into valuable customers.

c) Virality Coefficient

The virality coefficient quantifies the organic growth potential of your referral program. A coefficient above 1 indicates exponential growth. By optimizing your referral program and providing exceptional customer experiences, you can unleash the power of word-of-mouth marketing.

In the ever-evolving world of growth marketing, understanding and leveraging the right levers is vital for fast-scaling DTC and SaaS brands. By focusing on acquisition, activation, revenue, and referral, you can optimize your growth strategies and drive sustainable success for your Shopify store. By monitoring key metrics like CPA, CLV, activation rate, AOV, NPS, and virality coefficient, you can make data-driven decisions to propel your business forward. Remember, growth is a continuous process, and regularly analyzing and optimizing these levers will help you stay ahead in the highly competitive digital landscape.

About ROAS Expert:

ROAS Expert is a startup-friendly growth marketing agency dedicated to helping fast-scaling DTC & SaaS brands achieve their growth goals. With our deep expertise in acquisition, activation, revenue, and referral strategies, we empower entrepreneurs and marketers to unlock their brand's full potential. Contact us today to learn how we can drive exponential growth for your Shopify store.


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