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Marketing is a system of consistent actions that lead to results. When a brand enters the market or changes its positioning, various factors are considered for its promotion: the product itself, pricing, sales locations, target audience, and more.

In other words, comprehensive marketing is crucial, not random actions. This is the only way to build relationships with customers who will keep coming back to purchase again and again. To structure the work of marketers, the concept of the marketing mix was developed — a system that reflects all the aspects that need to be worked on to maintain and strengthen a brand's position in the market.

In this article, we will explain what the 7P concept is and why it is important for business.

## How the marketing mix was created

The term "marketing mix" was first introduced in the mid-20th century in the United States. Harvard professor Neil Borden proposed a system of marketing tools needed to promote a brand in 1953. Later, another scholar, Jerome McCarthy, rethought and simplified the idea in the 1960s. This led to the creation of 4P marketing — a set of tools that form a brand strategy to increase product value and profitability.

The concept included the following elements: Product, Price, Place, and Promotion. It was believed that these components were sufficient to conduct comprehensive marketing and achieve results. However, over time, marketers realized that other factors — environment, processes, and people who interact with customers — were also important. Thus, the concept gradually expanded to 5P, 6P, and today, the marketing mix exists as the 7P model. This version was proposed in the 1980s by J. Bitner and B. Booms.

## 7P concept

The 7P marketing mix incorporates the elements of the classic 4P and is supplemented with new ones for a more extensive approach to brand management. Let’s take a detailed look at each aspect of the concept.
 
### Product

This is what the brand will offer to customers and sell. Marketing begins with developing products or services that meet market demands. The product must solve a consumer’s problem and satisfy their needs. No one will buy something entirely unnecessary, minimally useful, or unclear. Therefore, the marketing mix concept starts with developing the attributes of the product or service:

- **Visual style:** This includes the design of the product itself and its packaging (brand style, logo). A clear presentation of what you are selling is crucial. 

- **Positioning:** This defines the role the product will play in the market and who it is created for: whether it is for the mass market or a niche for a specific sector or group of people. 

- **Product features:** This involves the benefits for customers and the uniqueness that will be marketed. 

- **Quality:** This parameter influences not only the price but also how the product is presented. Luxury goods and [**mass-market products**](https://altcraft.com/glossary/mass-market-what-it-is-and-how-to-promote-such-products) differ in quality, and customers in these segments focus on different criteria. Therefore, it is essential to build in the features that will meet the target audience’s expectations. 

- **Assortment:** The product should adapt to customer needs and offer various options. Variety increases the chance of reaching more people and raises the likelihood of sales.

### Price

The cost of the product is the second component included in the 7P marketing mix. Pricing is determined by the business's strategic goals, product quality, competitive environment, production costs, brand recognition, and other criteria.

Key considerations in pricing:

- **Profitability:** The product's price should cover the costs of its creation and generate profit. It’s essential to calculate all expenses accurately. 

- **Variability:** Depending on the seller's operations and the type of sales (wholesale, retail), prices are set to be market-appropriate and consider different marketing channels. The price may also vary based on the product or service's configuration. 

- **Product status:** Premium segments are initially priced higher than economy ones. Therefore, it's crucial to determine the category in which the product will be sold right from the start. 

- **Promotion:** Pricing includes marketing costs: promotions, discounts, events, etc. Possible conditions for customers are outlined, such as a brand never reducing prices by more than 20% or avoiding sales altogether. 

- [**Seasonality:**](https://altcraft.com/blog/seasonal-marketing) Some products are not in demand year-round, which should also be considered when setting prices. During the peak season, it’s important to generate enough income to offset the decline in demand during less active periods.

### Promotion


This includes the marketing strategy and all the tools used to increase brand awareness and sales. This element of the 7P concept is responsible for the information the customer receives about the product, as well as the right place and time.

Promotion typically involves the following components:

- [**Audience segmentation:**](https://altcraft.com/glossary/market-segmentation-what-it-is-its-types-and-main-stages) The customer base and potential buyers are divided into groups based on similar characteristics to provide the most accurate offer to each. Personalization is also used to improve results. 

- **Advertising budget:** A set amount is allocated in the promotion for attracting new customers. The return on investment is also calculated. 

- **Communication channels:** Tools and platforms where the company interacts with the audience, including email newsletters, SMS, push notifications, messaging apps, media, and other online and offline resources. 

- **Event marketing:** Events are a part of brand promotion, so planning and including them in the strategy is essential. 

- **Analytics:** Marketing activities should be quantified to monitor promotion, adjust strategies, and understand their effectiveness. Brands collect audience data for analysis and offer personalization. For example, [**CDP platforms**](https://altcraft.com/en/) are used for this purpose.

<Note>
If you are looking for a platform to automate your marketing, we recommend [**scheduling a demo**](https://altcraft.com/en/setupDemo) with our experts to learn how to maximize the efficiency of Altcraft Platform.
</Note>

### Place

These are the points where the product will be sold: online and offline platforms. Locations are chosen where potential buyers are present. The method of distribution depends on the product's characteristics, price, and storage conditions. The sales location should be accessible to [**the target audience**](https://altcraft.com/glossary/target-audience-why-to-define-it-how-to-classify-and-segment-it), and the purchasing process should be clear and simple.

Key considerations when choosing a distribution method:

- **Product features:** Most products can now be sold online, but there are categories that buyers prefer to evaluate offline, especially expensive items. There are also digital products that are only sold online. 

- **How customers search for products:** To determine the sales platform, it’s essential to understand where potential buyers search for information about the product or service. Based on this data, distribution channels are selected: online or offline stores, social media, and other platforms. 

- **Geography:** The territory where the product is sold and the ambitions for expanding the product's location are considered. 

- **Sellers of your product:** There are options to sell through your own outlets or to distribute products through partners and dealers. In this case, a motivation system for distributors and working conditions are developed.

### People

Brands are created and promoted by people, which is why this element was added to the expanded marketing mix concept. This refers to everyone who interacts with customers directly and indirectly, as well as those who influence product choices. This includes salespeople, company managers, "opinion leaders," and brand advocates — consumers who buy from you and promote your brand without payment. It’s important for a business to establish effective communication between these people and the potential audience.

Methods and tools used for this include:

- **Corporate culture:** Internal processes and communication within the company reflect on customer interactions. Therefore, building a strong culture is essential for providing high-level service. 

- **Training:** To communicate effectively with customers, employees must be knowledgeable in their field and possess communication skills. Thus, it is the responsibility of the leadership to organize training that aligns with business goals. 

- **Motivation:** Maintaining high levels of service and sales is possible when employees are motivated and perform their duties diligently. For this, businesses need a system of incentives (both material and non-material) that keep the staff "in shape." 

- **Loyalty programs:** To encourage customers to continue buying and recommending your brand, it’s important to motivate them as well. This usually involves bonuses, special conditions, promotions, and well-established communication. 

- [**Working with opinion leaders:**](https://altcraft.com/blog/what-is-influencer-marketing-how-to-build-strategy) Strategies for working with influencers aren’t limited to paid advertising. This can include joint media projects, product creation, or even becoming a brand ambassador.

### Physical evidence

A customer's purchase decision is often influenced by what they see around them: from the product's packaging to the store's interior and the staff's appearance. The design of your office and branded promotional materials also plays a role.

All of these elements create an atmosphere and the right mood that encourages purchases.

In the online world, factors like a well-designed, visually appealing website, social media pages, and other brand accounts, as well as digital materials from the company, have an impact on the customer.

### Process

This refers to the system of interaction between the company and the customer, including communication processes that influence purchasing decisions. This encompasses the speed and quality of service, delivery, and other elements that guide the customer through [**the sales funnel**](https://altcraft.com/glossary/sales-funnel-what-it-is-its-types).

Interaction processes should be as convenient and comfortable as possible for users of the product or service. This helps maintain customer loyalty, encourages repeat purchases, and prompts customers to recommend your brand to others. To improve service quality, customer feedback is collected, and analytics are used to identify areas where processes may be "lagging."


## Summary

The 7P marketing mix is an expanded version of the 4P model, which includes additional elements for brand strategy. The concept consists of marketing tools and methods that work to promote products and services, as well as to increase sales and brand awareness.

Originally, the 4P model included the following components: Product, Price, Promotion, and Place. In the 7P concept, three more elements were added to reflect the modern realities of the market and business development: People, Physical Evidence, and Process.

The 7P marketing mix expands the 4P model, adding People, Physical Evidence, and Process to adapt to modern market and business needs.

marketing-7-p.png

About what the 7P concept is and why it is important for business.

Marketing 7P: a Comprehensive Approach for Your Business

<Video
url="https://www.youtube.com/embed/k0reI157Lpc?si=h_kMdp-MJev1JEhj"
/>


After the rejection of third-party cookie files, marketers are seeking ways to enhance user action tracking and optimize marketing campaigns. If you're involved in online advertising, the term "Conversion API" (or CAPI) has probably caught your attention.

This concept is frequently encountered in advertising strategies and holds immense significance for marketers. Professionals want to keep up with the times, especially considering the changing landscape where privacy is regulated more strictly, and third-party cookies are gradually being phased out.

In this article, we will explore what Conversion API (CAPI) is, developed to address current challenges. With this tool, marketers will be able to track data, optimize strategies, and multiply revenue even as privacy takes center stage.

## What is conversion API and how does it impact tracking and optimization

In advertising, the term "conversions" refers to a wide range of actions on a website or in an application, extending beyond simple purchases. They are indicators of user engagement and interest, ultimately reflecting the success of marketing campaigns. Conversions can include product views, completed purchases, content downloads, email subscriptions, form completions, and much more.

The emergence of Conversion API is a response by Meta* and Google to the challenges posed by strengthening privacy regulations and [**the phasing out of third-party cookies**](https://altcraft.com/blog/customer-data-privacy-issues-in-digital-marketing). Such APIs are an important solution to supplement the data that marketers will no longer be able to collect.

For brands, Conversion API is also important because it changes the logic of tracking desired actions. These APIs facilitate the seamless transfer of critical user action data to the Ads Manager of the respective advertising platform. It's akin to providing real-time updates, enabling marketers to access comprehensive and timely information, thereby enhancing the tracking and optimization of advertising campaigns.

Traditional methods heavily rely on browser tracking and third-party cookies, whereas Conversion API operates on the server side. These changes are key to improving effectiveness.

## Conversion API and pixels: what's the difference

Perhaps the concept of Conversion API reminds you of its counterpart — [**pixels**](https://altcraft.com/glossary/tracking-pixel-what-it-is-how-to-set-it-up-and-how-it-works). Their function is to capture user event data using third-party cookies and transmit it to platforms. This allows marketers to tailor advertising campaigns based on user behavior, ensuring that messages are delivered to those who have shown interest or taken specific actions on online platforms. Pixels play a key role in optimizing advertising performance and are crucial for its personalization and effectiveness.

However, with the phasing out of third-party cookies and the increasing popularity of ad blockers, such tracking using pixels is losing its effectiveness. In response to this, companies are monitoring events through servers and using Conversion API as a powerful alternative.

**Comparison of conversion API (CAPI) and pixels:**

<Img
img="/uploads/comparison_of_conversion_api_and_pixels_f2ffe3c936.png"
alt="Comparison of CAPI and pixels"
/>

**If you're facing the dilemma of implementing Conversion API and pixels or just Conversion API, the answer is this: major companies recommend using both options to enhance performance, as pixels are still capable of gathering valuable data.** The more information you have at your disposal, the more effectively you'll be able to tailor your advertising campaigns.

## Using conversion API: benefits

Now let's explain why Conversion API will definitely be useful for you in implementing your marketing strategy:

### 1. Increased accuracy and reliability of data

Conversion API provides high-precision data and reduces discrepancies caused by ad blockers and browser settings.

Marketers can rely on the data obtained to efficiently optimize advertising campaigns. For example, when tracking conversions, you can be sure that each conversion is accurately recorded. Knowing this information, you can control advertising expenses and [**increase ROAS**](https://altcraft.com/blog/roi-romi-roas-difference).

### 2. Improvement of attribution modeling

With Conversion API, the selected attribution model becomes more accurate, as you can see the entire customer journey and all their activity through the sales funnel.

Marketers analyze conversions across multiple touchpoints, based not only on web data but also on CRM data, offline conversions, and events at the bottom of the funnel. This comprehensive approach provides an understanding of how different channels influence conversions. This contributes to effective budget allocation.

### 3. Improved tracking across all devices

Conversion API shows marketers how users behave on a website or other resource from different devices.

This allows specialists to track the customer's cross-device experience, thoroughly analyzing their interaction with the product. As a result, they recognize the person who responded to the advertisement from a mobile phone and then made a purchase from a computer as the same user.

### 4. Enhanced privacy

Conversion API helps marketers comply with privacy rules while minimizing dependence on third-party cookie files.

Marketers respect user privacy, thereby [**building trust**](https://altcraft.com/blog/customer-trust). With Conversion API, they collect and transmit data in accordance with privacy requirements, ultimately contributing to building a positive brand image.

### 5. Minimization of data loss

Server-side tracking using Conversion API minimizes data loss, especially when ad blockers or anonymizers are used.

Marketers know they are recording all data acquisition points. This facilitates comprehensive data analysis and more accurate decision-making.

### 6. Strengthening data control

Conversion API represents an advanced level of control over the data exchange process because the authority to manage information lies with the advertiser.

Marketers control how data is disseminated within the company. It is specialists who decide which information to transmit and when to do so. They are responsible for securely processing information in accordance with the goals of the company.

## Utilize conversion API to track and optimize data without cookie files

So, Conversion API is an important tool in the modern marketer's arsenal. Its ability to provide data accuracy, improve privacy compliance, and offer comprehensive insights into customer behavior makes it an indispensable asset in the post-cookie era.

With Conversion API, marketers successfully navigate the changes in the world of online advertising and achieve success in an environment where accuracy, trust, and efficiency become priorities. Master Conversion API to stay "in the know" in the constantly evolving digital world and witness how this tool transforms the ways of audience interaction, campaign optimization, and performance enhancement.

*
*Organization recognized as extremist in the territory of the Russian Federation*

Source: [**Actioniq**](https://www.actioniq.com/blog/tracking-and-optimization/)

Conversion API empowers modern marketers with accurate data, privacy compliance, and insightful analysis, ensuring success in online advertising.

Блог англ.png

About what the Conversion API (CAPI) is, how to use it to track data, optimize strategies and increase revenue.

Conversion API: Enhanced Analytics & Marketing Optimization

Conversion API: Enhanced Tracking and Marketing Strategy Optimization

<Video
url="https://www.youtube.com/embed/XQE3Ow7EHMY?si=5UvMKRxRetXotwu1"
/>

The effectiveness of an advertising campaign isn't always assessed solely by direct metrics like conversions or clicks. This is because not every marketing action directly influences the outcome. It may turn out that the purchase was not influenced by the channel recorded in the analytical report. For example, if a company used attribution models and chose last-click attribution, giving credit to the last channel before the desired action occurred.

Such a narrow view of results can be misleading, leading marketers to draw incorrect conclusions for planning future campaigns: if it worked this time, the same tactics should be repeated next time. However, it turns out that the old approach inexplicably doesn't work.

To examine marketing effectiveness from different angles, the method of control groups is used. In this article, we'll explain what it is, why this approach is necessary for businesses, and how research is conducted.

## What is a control group

**A control group** is a method for assessing the effectiveness of marketing campaigns (email, push, SMS notifications) using individuals who have not engaged in marketing communications with the company or have received a limited number of notifications (e.g., only transactional ones). The method originated in science, where it was used to demonstrate the relationship between one phenomenon and another.

Through control groups, the actions of customers who have not received advertising messages from the brand, except for transactional ones (global group), or who have received a limited number of messages, are studied. Then, their activity is compared with that of users who received the messages. Ultimately, the aim is to evaluate whether marketing efforts have influenced the purchase decision or if the customer was ready to make a purchase without additional reminders.

The control group assesses the number of products/services sold or requested, the average order value, views, subscriptions, website visits, and other metrics.

*For example, an email campaign promoting a shoe sale with two variations of text and design (A/B testing) resulted in sales doubling. Initially, the campaign seemed successful, with one text and design combination, A, appearing more effective. However, analysis with control groups revealed that a significant percentage of purchases were made by users unaware of the promotion, as they did not receive notifications.*

## Test and control group: differences 

These two concepts may seem similar in meaning, but the principles of working with them differ.

<Table>
| **Test Group** | **Control Group** |
| ------ | ------ |
| Users who are sent variations of content with different variables over a certain period. For example, A/B testing is conducted in an email campaign, where one portion of subscribers receives version #1 of the text, while another receives version #2. | Customers receive content without any changes to assess the impact of variables from the A/B test on the results. Or they are not shown anything (a scenario where there is no interaction with the user through promotional channels). |
</Table>

It's important that when conducting A/B testing, all results are taken into account: both the control and test groups. After the study, negative control is also evaluated—how the absence of any changes affected the users.

The control group confirms or refutes the results obtained from the test group.

## The role of control groups

Utilizing a control group:

- **Enhances the effectiveness of marketing campaigns** by providing a broader analysis of results, demonstrating the true impact of marketing on conversions or other metrics. Irrelevant offers are excluded, leading to the creation of more desirable [**offers**](https://altcraft.com/glossary/offer-what-it-is-what-for-it-is-used-and-how-to-come-up-with-it) for customers. 

- **Saves your resources.** Research identifies poorly performing or unnecessary channels where you allocate budgets. After their exclusion, time and money are freed up for other promotion methods. 

- **Indicates changes in customer preferences and market situations** that may have gone unnoticed. Over time, the audience becomes fatigued, and even more attractive interfaces from competitors can lure users away. The control group will identify which incentive will re-engage customers with the brand. 

- **Tests hypotheses for new advertising campaigns.** For example, you want to test whether the number of purchases in an online store will increase if push notifications about an additional discount on [**abandoned cart items**](https://altcraft.com/blog/how-to-reduce-cart-abandonment-rate) are sent.

## Platforms for working with control groups

The method is flexible and adaptable for hypothesis testing across various digital resources:

- **Email and other distribution channels:** here, the impact on user activity through email, push notifications, SMS, or messengers is explored. For example, the influence of a discount coupon for the test group and its absence for the control group is examined. 

- [**Landing pages**](https://altcraft.com/glossary/what-are-landing-pages-and-why-they-matter), where different user samples during A/B testing are shown variants that differ from each other. Texts, images, and headlines are changed for the test groups, while the control group always sees the same variant without alterations. 

- **Advertising:** various variables such as creatives, offers, texts, and formats are possible for the test group here.

## When not to use control groups

Forming a control group is not necessary for every marketing campaign. The method will not yield results if [**the customer database**](https://altcraft.com/glossary/everything-about-the-customer-database) is insufficient. For an audience of a few hundred people, the study will be statistically insignificant (too small a sample size to make a global conclusion).

Additionally, part of the revenue will have to be forfeited. For example, the global control group will be excluded from mailings and may not make any purchases if they do not receive marketing messages. To minimize losses, some companies refrain from using the control group method during peak sales seasons.

This research should also be avoided if it is not possible to accurately track all customer interactions with the company across all online sources, if there are several of them.

## Disadvantages of control groups

The conclusions of the study may not always be applicable to a broader audience due to non-representativeness. The control group represents a specific percentage of customers, which may not always reflect the characteristics of all users. If more men were chosen for the test, data on their behavior may be irrelevant to the female audience.

Control groups are usually small compared to all users. Because a company will not risk revenue for research purposes and allocate more than 20% of customers for it. Such a quantity may be statistically insignificant, resulting in inaccurate results.

The company cannot account for all external factors that influence the decisions of the control group. For example, a brand conducted mailings for testing and checked them against the control group. Suppose the result was weak in terms of conversion quantity. That is, the advertising campaign was ineffective. But if it is known that at that time a competitor held a closed sale with significant discounts, such a conclusion can be challenged.

## How to conduct research with a control group

Start by defining the goal: what hypothesis do you want to test through control groups and what answer do you expect to receive. Then you need to:
1. **Identify [**the audience segment**](https://altcraft.com/blog/how-and-why-to-segment-target-audience) for the study.** Common characteristics can be shared among users. For example, customers who have made purchases totaling N over the past six months.
It is important for the control group to reflect those to whom advertising messages were sent—be similar in demographics and other characteristics. Otherwise, the study will be unreliable. 

2. **Choose the appropriate number of users that affects the significance of the result.** Here, the rule applies: the larger the audience size for targeting, the fewer users should be used for research. And vice versa: a smaller quantity requires more people for the sample. For example, for a control group of 12,000, it may be 5%, while for 2,000 customers, it is advisable to choose 10-20%.
If the research results show that the company is performing well, the control group will decrease in subsequent tests. Conversely, if the advertising is ineffective, the number of users in the sample should increase with each subsequent check. 

3. **Set the duration of the study.** It can be short-term for a single campaign, but a longer one over several months, taking into account external factors, will provide more ideas for improving effectiveness. 

4. **Make a mailing in the context of the advertising campaign with carefully crafted content for this purpose.** Testing of both a single marketing activity and a set of actions is possible. Then you can assess the effectiveness of the entire strategy. Choose the option that meets the business's needs. 

5. **Analyze the results after completing the study.** For example, if 15% from the control group made a purchase, and 30% received a promotion email and also made a purchase, it means the campaign worked. However, if the percentages in both groups are almost identical, the advertising strategy is likely not effective enough.
To assess the significance of the results, use one of [**the A/B testing**](https://altcraft.com/blog/what-is-statistical-power) calculators. 

6. **Adjust campaigns and strategies to improve performance.** At this stage, you may realize that you need to abandon certain channels that are not yielding results.


## Summary 

A control group is a method for testing marketing campaigns in which a certain number of users are excluded from all or some channels of brand communication. This is important to assess the significance of advertising activities in achieving business results, save budget, time, test hypotheses, and identify market changes.

There are two types of control groups: global (customers receive only transactional messages) and local (some marketing communications remain). Such research is necessary for conducting A/B tests to understand the effect of no changes in campaigns.

The choice of a control group depends on the size of the audience for advertising: the smaller the number of people in the sample, the more needed for tests. Advertising is launched to this audience, and the result is analyzed. Afterwards, marketers draw conclusions about the effectiveness of strategies and adjust them.

A control group excludes users from some brand communication channels, essential for testing marketing impact, saving resources & understanding market changes.

control-group.png

About what a control group is, why a business needs this method, and how the research is conducted.

Control Group: Definition & Why Needed in Marketing

Control Group: What It Is and Why It's Needed in Marketing

<Img
img="/uploads/bnb_bank_2faa741b07.png"
alt="How BNB Bank Increased Transaction Activity"
/>

BNB Bank is a modern bank with a more than 30-year history and a confident progressive approach to products and services.

Over the past two years, the bank has attracted more customers than in the previous 30 years. Today, around 97% of customers register online, and almost 100% of card products are digital.

BNB Bank's successes are highly recognized in the professional community: at the Bank of the Year award in 2024 alone, it swept 5 awards across several categories. Among them — 1st place for bank marketing (3rd year running).

BNB Bank has been collaborating with Altcraft for over a year. The results achieved during this period are presented below.

## Why Altcraft 

The platform met all the requirements of BNB Bank right away:

- **Security.** It is important for the bank to store customer data on its own servers. The company takes great care of personal data and strives to minimize the chance of its transfer to third-party resources. In their search for a solution, they conducted a thorough comparison of different options. They chose Altcraft, primarily due to the on-premises solution, to install the platform within the business environment.

- **Centralization of communication delivery**. With Altcraft, BNB Bank consolidated communications and analytics in one place and began tracking touchpoints with clients in profiles. This helps monitor the frequency of interaction, take user interests into account, and send relevant content.

- **Platform flexibility.** The bank sees how [**Altcraft Platform**](https://altcraft.com/) is developing, which allows them to implement solutions of any complexity using the platform.

## Tasks and Results

The first stage of the collaboration involved integrations and adding the necessary data. Now, the partners are actively engaged in automating communications. They have already launched several product and personalized scenarios: NPS surveys, birthday messages, currency exchange offers, and more.

One of the key tasks is onboarding new customers and retaining them. To achieve this, they have implemented trigger chains for each product that guide customers through product usage and highlight its benefits.

For automation, omnichannel messaging is utilized across Viber ⭢ SMS channels. In certain scenarios, only mobile push notifications are employed.

**In numbers:**

- The **open rate** of automated Viber messages: **≈60%**

- The **click-through rate** of automated messages across **all channels: ≈12%**

- **Increase in transactional activity: +36%**


<Note>
Transactional activity is the number of actions a user takes related to purchasing or using a product or service.
</Note>

- **Monthly Active Users (MAU) growth over the year: +19%**. The launch of push notifications and initial trigger-based scenarios partially contributed to this increase.

<Note>
MAU (Monthly Active Users) — the number of users who interacted with a product or service at least once within a month.
</Note>

## What Was Done to Achieve These Results

A new communication channel — push notifications — was launched just over six months ago. **The click rate reaches 20%**, and the results are growing every month. The convenience and user-friendliness of the BNB Bank mobile app, along with a well-thought-out push notification strategy, contribute to achieving such a strong performance.

The bank actively uses the Scenarios tool to create automated email campaigns of any complexity. In late 2023, Altcraft updated the scenario editor, making it more convenient and user-friendly.

<Img
img="/uploads/scenario_54fc2dc692.png"
alt="Updated the scenario editor in Altcraft Platform"
src="Example of a product trigger scenario"
/>

The platform provides extensive segmentation options: by basic profile data, geolocation, action history, and more. Based on the information obtained, it is possible to prepare a relevant offer for customers. BNB Bank works with additional segmentation fields and requests to create [**trigger scenarios**](https://altcraft.com/glossary/trigger-campaign-why-to-use-it-to-whom-it-is-suitable).

BNB Bank also uses broadcast campaigns to launch manual communications — it sends mobile push notifications, Viber messages, and SMS messages, informing customers about new services and important news.

Altcraft Platform can also send messages to Telegram and other channels.

In collaboration with Altcraft’s development team and the bank's vendor, Viber — a channel important for BNB Bank — was added. The audience of the Belarusian market actively uses this messenger, so it shows good results.

- The open rate for manual communications reaches 75%.

- The click rate for some special communications is 50%, but on average it is up to 15%, which is considered a good result.


Using analytical reports, the bank tracks the effectiveness of campaigns over time. The Altcraft system quickly processes a large amount of data, instantly calculates and displays analytics. The client receives the necessary information without delay.

Currently, analytical reports are used to keep track of the performance of trigger scenarios. Thanks to convenient graphs, it is possible to detect declines in sending and delivery rates. This serves as a basis for refinements and adjustments. Additionally, with the help of analytics, the bank understands which content is truly interesting and relevant to users and uses this information in further automation and content development.

## How Marketing Has Changed After Implementing Altcraft


1. **The implementation of the platform has enabled** [**message personalization**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters). Now, the bank sends users only the content that has resonated with them before, along with relevant messages, individual product offers, and targeted recommendations. This approach positively impacts open and click-through rates.
 
2. **In Altcraft CDP, you can use different message sending policies to avoid overwhelming recipients with unnecessary information.** According to the new communication policy of BNB Bank, each client receives no more than three automatic and manual messages per week. This allows the bank to control its relationships with customers.


## BNB Bank's Future Development Plans

BNB Bank is prioritizing maximum automation. To achieve this, the bank's team is migrating all previously launched trigger and service campaigns to Altcraft Platform, where they can then create new ones from a single interface.

The bank's immediate plans include automating monthly cashback service messages, which inform customers about the amount they earned using the 1-2-3 card in the previous month. This will save the bank 4-5 working hours for several team members each month.

In addition, work is underway on a loyalty program, in the implementation of which Altcraft is taking a direct part.

In the article, we will analyze what results have been achieved, in addition to increasing transactional activity during the cooperation between BNB Bank and the Altcraft Platform.

bnb-bank.png

About the results achieved during the cooperation between BNB Bank and Altcraft Platform.

BNB Bank: How to Attract New Customers and Increase Transaction Activity

How BNB Bank Increased Transaction Activity by 36%

<Video
url="https://www.youtube.com/embed/R_l6jKw1aBQ?si=1TGyHFhGQIxuL_6V"
/>

Moving forward without a clear and measurable goal is a risky strategy for any business. Therefore, goals are set and translated into numerical indicators by which the success or failure of a company is evaluated. However, the primary metric is not always the revenue generated by the business.

Top digital companies choose North Star Metric as their guiding light, which translates to the "north star metric." This indicator determines whether the business has chosen the right development strategy.

Let's explore further what NSM is all about, why you need a "north star," and how to find it not in the starry sky, but among your goals and objectives.

## What is North Star Metric and why is it needed

**The North Star Metric** is the primary indicator that characterizes the value of a company's product to its users. And this metric is not always measured in terms of money. The essence of the North Star is to control the increase in value for customers, which enhances the business's sustainability. And a large flow of money that people pay does not always guarantee that the company is stable and will continue to grow further.

**The NSM metric is tracked to:**

- Maintain the right direction in the company's work and understand common goals for all departments. 

- Prioritize employees' tasks to efficiently achieve goals. 

- Identify weaknesses and new development options. 

- Maintain openness in team work and transparency of results.

<Note>
Do not confuse North Star with OMTM — one metric that matters. These metrics are similar but differ in scale and tracking time.
</Note>

NSM is important for the entire company over a long period of time, while OMTM is a local indicator for individual business units. Such a metric is calculated over several months (from three to six).

## NSM Variants 

The uniqueness of the North Star lies in the absence of a single benchmark for everyone. A metric that best reflects the tasks and type of business is chosen as the "pole star." [**An online marketplace**](https://altcraft.com/glossary/e-commerce-types-examples) and a media platform should not determine success or failure in the same way.

For a marketplace, revenue or the number of orders would be more suitable as an NSM metric. For an online magazine, it's better to choose as the "pole star," for example, completion rate of articles published through various marketing channels.

<Table>
| **Metrics** | **Description** |
| ------ | ------ |
| LTV | The customer lifetime value indicator refers to how much money the customer has paid for the company's product over the entire time of use. |
| CAC | Сustomer acquisition cost |
| ARR | Annual recurring revenue |
| MRR | Monthly recurring revenue |
| GMV | Gross merchandise value |
| MAU | Monthly active users |
| WAU | Weekly active users |
| DAU | Daily active users |
| NPS | Net promoter score |
| Retention Rate | Customer retention. For NSM, retention is counted for different periods depending on the specifics of the business. |
| New users | New user registrations or application installations |
| Viewing time | Reading articles, watching video content to the end. |
</Table>

## Is it possible to change the North Star over time?

Yes, the "north star" should correspond to the company's level of development. The benchmark for a small startup may not always be suitable for a larger, more mature company. Therefore, as goals change and the company grows, the NSM also changes.

For example, the social network Facebook* used the metric MAU. After the appearance of competitors and changes in the digital market, it made the number of users who log in and show activity every day the main indicator.
 
### Can you choose more than one North Star

In the sky, there is only one north star, but in the earthly business, several NSMs are allowed. However, this option is suitable only for developed large companies with a complex structure and product. In this case, even individual departments set their own benchmarks.

It is important that the existing metrics do not contradict each other. Do not choose more than three North Stars. Otherwise, it will be difficult to maintain the correct focus.

## How to Find the "North Star" 

**Step 1.** Identify the action taken while using the product, where the customer solves their problem/task or satisfies a need.

*For example, in an English language learning app, the moment of satisfaction would be successfully completing a lesson.*

**Step 2.** Determine how the value of the product can be measured. *In the example of the app, this could be returning to lessons. If the user finds it interesting and useful, they repeat the experience.*

**Step 3.** Translate the value into a specific metric and limit the time over which it will be measured (per day, month, or year).

*Using lesson quality ratings in the app is not always correct for measuring the success of the product because the user may give a high rating but not return. It is better to measure NSM as the number of returns to lessons, for example, through the Retention Rate metric.*

**Step 4.** Relate the assumed North Star (for example, Retention Rate) to other business metrics. All these metrics should ultimately influence the increase in NSM.

At this stage, we check the chosen "north star" for realism. The ideal metric reflects business growth and is influenced by specific employee actions with their KPIs. If there is no such connection, the North Star is likely incorrect.

*Example: Suppose the NSM in the English language learning app were the number of new users. Suppose this figure were to increase, but at the same time, there were fewer subscription renewals and returns to the app, which would ultimately be harmful to the business. Therefore, the North Star in the form of the Retention Rate is a more reliable indicator because returning to the app encourages subscription renewals. And regular lesson continuation means that users like their content (team engagement actions work).*

## Examples of NSM in large companies

NSM is often used in startup operations, but even top multimillion-dollar companies with their IT products and services continue to track the north star metric. Let's look at some examples from well-known brands.

### Spotify

The music service considers listening time as its NSM. Such a metric is unique for similar platforms where only audio content is available.

<Img
img="/uploads/spotify_nsm_de2a6bcdee.png"
alt="Spotify"
/>

### WhatsApp*

The world's most popular messaging app measures its success by the number of messages sent by users. The metric reflects utility through the frequency of application usage for communication.

<Img
img="/uploads/whatsapp_nsm_9a61c99b35.png"
alt="WhatsApp"
/>

### Zoom

The North Star metric for the service is the number of daily online meetings. This assesses how often people actually use the service. This method of evaluating the platform's importance to users is much more effective than measuring, for example, the number of registrations at a given time.
 
### Duolingo

The language learning app has identified its NSM as the DAU (daily active users), indicating the level of engagement. Duolingo studied user behavior and found that the frequency of app usage correlates with continuing education. The more often a user logs in, the higher their motivation to continue lessons. As a result, the number of users with paid subscriptions continues to grow. 

<Img
img="/uploads/duolingo_nsm_d1384f68e7.png"
alt="Duolingo"
/>

### Pinterest 

The company has chosen WAU (weekly active users) as its "north star." This is rational compared to, for example, DAU, which counts the daily flow of users. Pictures for ideas and inspiration (the purpose for which users often visit Pinterest) are not a product needed every day.

<Img
img="/uploads/pinterest_nsm_c1ef546028.png"
alt="Pinterest"
/>

### Miro

The creators of the service assess the usefulness of their product through the number of boards available for simultaneous collaboration by multiple users (usually a feature for team work). This metric reflects how convenient it is to use the tool within a company and also indicates how to improve the product and what strategy to choose next.

<Img
img="/uploads/miro_nsm_c564c95252.png"
alt="Miro"
/>

### Yandex.Taxi

The North Star Metric for the taxi booking service is LTV (Lifetime Value), which denotes the amount earned by the company from a customer over the entire period of their activity. Yandex also considers this metric in the context of other brand services: Yandex.Food delivery and Yandex.Store. Within the ecosystem, all services are interdependent. 

### Edadeal

The NSM (North Star Metric) for the service is the number of active users per day or DAU (Daily Active Users), but with the addition of being "composite." This means that even short sessions and returning users are counted. The second key metric for the service is LTV.

### LinkedIn

The professional networking platform evaluates its effectiveness based on MAU (Monthly Active Users) — users who demonstrate activity within a month. Through this metric, the needs and problems of users are studied: what prevents them from using the platform more often, and what motivates them to return.

<Img
img="/uploads/linkedin_nsm_545f67327b.png"
alt="LinkedIn"
/>

## Summary

The North Star Metric is a key indicator that reflects the effectiveness of a company's operations and forecasts growth prospects. It serves as the primary guide for team efforts.

However, different metrics can serve as NSMs, and there is no universally applicable standard. 

These metrics include financial indicators (LTV, CAC, ARR, MRR, GMV, etc.), engagement metrics (DAU, WAU, MAU), as well as NPS, the number of new users, content completion rates, and others. Finding the "North Star" requires defining the product's value and determining how to track it in a numerical indicator. Additionally, it's important for the North Star to align with the goals and objectives of all company departments.

*
*Products of Meta, a company recognized as an extremist organization in Russia.*

The North Star Metric is a pivotal measure of a company's efficiency and growth potential, guiding the team's efforts.

nsm.png

About what NSM is, what is the essence, why you need a "polar star", how to find it not in the starry sky, but among your goals and objectives.

North Star Metric: Definition, How to Find It, and Examples

North Star Metric: What It Is, How to Find It, and Examples From Major Companies

<Img
img="/uploads/digital_services_ecosystem_0ea4fb8488.png"
alt="How Uzum Reduced Push Notification"
/>

**Uzum** is a digital services ecosystem, offering e-commerce, fintech, and banking services to both individuals and small and medium-sized businesses. Over 10 million people in Uzbekistan use Uzum's products every month. Notably, the company achieved the status of the first tech unicorn in Uzbekistan.

The company has been automating marketing communications through Altcraft Platform since December 2022. This article explores the results achieved during their year-long collaboration.

## Why Uzum chose Altcraft Platform

Uzum selected the platform based on the following criteria:

1. **On-Premise Deployment.** Uzum's ecosystem includes a marketplace, express delivery, traditional and digital banking, a BNPL (buy now, pay later) service, a car buying platform, and an entrepreneur app. Strict Uzbekistani data storage and security laws require the company to maintain full control over information. Altcraft, as one of the few platforms offering on-premise deployment, minimizes the risk of leakage by granting Uzum complete control over data.

2. **Flexible Segmentation.** Altcraft allows for detailed audience segmentation based on various factors like profile data, location, website activity, and others. This flexibility enables Uzum to tailor communication for different user groups.

3. **A/B Testing.** With this feature, Uzum systematically optimizes its marketing strategies by determining the best methods of interacting with customers.

4. [**Marketing Automation**](https://altcraft.com/blog/what-is-marketing-automation-and-how-it-affects-business-development) **and Loyalty Programs**. Altcraft Platform provides solutions for automating regular campaigns and creating communication chains. Additionally, you can generate various promo codes to increase customer loyalty and strengthen your relationships with them.

5. **Control of the Number of Communications per User.** Uzum automates customer communications, simplifying the interaction process. This also prevents information overload for the user, providing a more comfortable experience.

6. **Flexible User Subscription Management.** The platform combines data into a single customer profile. Comprehensive information about subscribers helps tailor messages to the preferences and interests of each buyer.

7. **Message Scripts in Templates for Campaign** [**Personalization**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters). The ability to use logical functions in templates ensures a high level of customer engagement, as you can add or remove necessary blocks for a specific audience.

Altcraft Platform not only meets high security requirements, but also effectively improves Uzum's marketing practices, which saves time and increases the efficiency of customer communications.

## Results Achieved

### Started Saving 20 Working Hours per Week


Uzum uses Push, SMS, loyalty programs, and market. By automating regular campaigns, they were able to save **more than 20 working hours per week** that were previously spent on creating these mailings.

<Img
img="/uploads/started_saving_working_hours_per_week_fcf708e8ee.png"
alt="By automating campaigns, they were able to save more than 20 working hours per week"
/>

### Reduced Time to Market for Ad-Hoc Campaigns by 3 Times

In a year of collaboration, Uzum was able to **reduce the time to market for ad-hoc campaigns by 3 times.** This was achieved through the use of a convenient segmentation system based on key profile data and the ability to launch customer communications in multiple languages.

**Previously, various tasks had to be performed manually:**

- Creating separate templates for specific users; 

- Dividing each segment into files; 

- Selecting the template language based on the list.
 
**Now:**

- Multiple templates have been created in different languages; 

- Content in the required language is automatically substituted based on profile data; 

- The audience is also automatically selected each time the campaign is launched.

<Img
img="/uploads/reduced_time_to_market_d5314c9e66.png"
alt="Reduced Time to Market for Ad-Hoc Campaigns by 3 Times"
/>

### Increased OR by 2.3 Times

Regular newsletters have become an important part of Uzum's marketing strategy. This has led to **a 2.3-fold increase in message opens** compared to previous approaches. This result underscores the effectiveness of the flexible segmentation system for more precise communication and adaptation to the interests of different user groups.

<Img
img="/uploads/increase_in_message_opens_4c3c594594.png"
alt="Increased OR by 2.3 Times"
/>

### Reduced Push Notification Opt-Out Rates by 23%

Successful segmentation reduced the push notification opt-out rates by 23%. This proves that customers respond more positively to personalized and relevant messages, and it speaks to the importance of A/B testing. This is how Uzum continuously optimizes content and communication channels.

<Img
img="/uploads/reduced_the_push_notification_5bd143c5b8.png"
alt="Reduced Push Notification"
/>

## Future Plans

Uzum plans to:

- Fully automate product recommendations based on user behavior; 

- Set up cascading communications; 

- Automate remarketing for users who do not receive messages or place orders.

## Conclusions

Altcraft Platform has fully met Uzum's expectations, as its use takes into account the requirements for data security and the flexibility of the segmentation system.

Uzum effectively uses Altcraft tools to optimize communication and customer experience management processes, which include Push, SMS, loyalty, and market. Full automation of product recommendations is on the agenda, along with continued improvement of user interactions.

These successes confirm the effectiveness of Altcraft Platform and Uzum's readiness for continuous improvement of marketing strategies for more successful interaction with the audience and business development in general.

How the digital services ecosystem Uzum reduced the bounce rate of push notifications and saved 20 working hours per week using Altcraft Platform.

digital-services-ecosystem.png

Read how the Uzum reduced the bounce rate of push notifications and saved 20 working hours per week.

Uzum: How to Reduced Push Notification and Saving 20 Working Hours

How Uzum Reduced Push Notification Opt-Out Rates by 23% and Started Saving 20 Working Hours per Week

<Img
img="/uploads/what_is_statistical_power_a8256e4185.png"
alt="What is statistical power"
/>

Defining statistical power or the "sensitivity" of a test is an important part of planning before launching A/B testing. It allows you to introduce more positive changes to a website and increase your revenue.

## Definition of statistical power

**Statistical power** is the ability of a criterion to detect differences where they actually exist. The sensitivity of a test will show a significant result and reject the incorrect null hypothesis.

Before delving into the elements of statistical power, it's essential to understand the types of errors that can occur in tests and how to prevent them.

## Two types of errors

### Type I error

**Type I error** is a false positive result: rejecting the null hypothesis that is actually true.

**The null hypothesis** states that there is no difference between a pair of events or phenomena.

A false positive test shows that there is a difference between the compared variants, even though there isn't one in reality. Such a situation can occur due to an error in the test or if randomness creeps in.

The probability of a type I error is denoted by the Greek letter alpha (α) and indicates the threshold level at which an A/B test should be trusted. If a test is reliable at 95%, the remaining 5% represents the probability of a type I error.

If a business cannot tolerate a 5% chance of error, considering it too high, the probability of false positive results can be reduced by increasing the test's reliability. If the reliability is increased to 99%, the probability of a type I error decreases from 5% to 1%. However, there are some "pitfalls" in this calculation.

The decrease in the probability of type I errors increases the probability of type II errors because there is an inversely proportional correlation between these values. Therefore, reducing the alpha error level (for example, from 5% to 1%) ultimately reduces the overall statistical power of the test.

<Img
img="/uploads/types_error_36faa5eac7.png"
alt="Graph by statistical power"
src="Type I error and its proportional connection with type II error"
/>


Sometimes it's necessary to consciously increase the risk of type I errors (for example, from 5% to 10%) to achieve high test sensitivity.
### Type II error


**Type II error** is a false negative result, meaning the inability to reject a false null hypothesis. Such a test will not show the advantage of any of the options, even though there are options that are more effective than others.

The probability of a type II error (β-error) is inversely proportional to statistical power (1 - β). If the risk of a Type II error is 20%, the sensitivity of the test is 80%.

Since alpha and beta errors have an inversely proportional relationship, if a test has an extremely low alpha error value (for example, 0.001%), the risk of a type II error is very high.

Finding a balance is not an easy task. Through A/B testing, a business aims to determine the best combination of elements and identify the most effective variant among many. If the tests lack sufficient sensitivity, there's a great risk of not noticing a genuinely good option.


## Variables affecting test statistical power


Next, we'll examine four variables that influence the statistical power of a test. While studying these variables, it's important to remember that the primary task of a tester is to control the probability of errors. This can be achieved through:

- sample size; 

- minimum detectable effect (MDE); 

- significance level (α); 

- desired level of power (implied Type II error coefficient).


### Sample size


The sample needs to be sufficiently large; otherwise, conducting a good split test is impossible. It's crucial to calculate the sample size to ensure it's of the necessary and adequate size. A small sample won't provide enough test power, while an excessively large one will extend the test duration (long tests are more expensive and time-consuming).

Each analyzed variant or [**segment**](https://altcraft.com/help-center/manage-customer-database/database-segmentation-for-email-newslettering) should have a significant number of users. For this reason, the sample size should be planned in advance, ensuring that the test always has good statistical power. Otherwise, exiting the test might reveal too many variants or segments. If this realization comes too late, the test will have been conducted in vain.

Expect statistically significant results within a reasonable period (e.g., no less than a week or a business cycle). In most cases, it's recommended to conduct testing for 2-4 weeks. Any duration exceeding this might lead to sample contamination and issues with cookie file deletion.

Therefore, determining the sample size and testing duration beforehand is crucial. This helps avoid the common mistake of conducting A/B testing "blindly," ending before obtaining statistically significant results.


### Minimum detectable effect (MDE)


MDE is the difference between variants that needs confirmation. Small differences are hard to detect, requiring very large samples. Substantial differences are noticeable even in small samples.

However, there exists a paradox where small samples can be unreliable, leading to erroneous tests. There's always a risk of error, and there's a narrow range within which results can be considered reliable. Since there's no single rule for determining sample size, all nominal levels are not 100% reliable.

### Significance level


Testing results are considered statistically significant under the condition that the null hypothesis is incorrect.

In simple terms, if during a split test, one landing page can confidently be preferred over another (with a test confidence level of 95%), there's only a 5% chance that the observed improvement is due to chance or error. Conversely, there's a 95% chance that the observed difference is not due to chance.

The 5% significance level is the most commonly used initial level in online testing, representing a 5% chance of a type I error, as mentioned earlier. An alpha of 5% means there's a 5% chance of incorrectly rejecting the null hypothesis.

Under equal conditions, reducing alpha from 5% to 1% simultaneously increases the likelihood of a type II error. An increased risk of a type II error reduces the validity of the test.

### Desired level of power


If the statistical power of a test is 80%, there's a 20% chance that the real difference between variants won't be detected. If a 20% chance is too risky, it can be reduced to 10%, 5%, or 1% to achieve powers of 90%, 95%, or 99%, respectively.

Before concluding that a 95% or 99% power analysis will solve all your problems, note that each increase in analysis power significantly increases sample size and analysis time.

So, what level of test sensitivity do you really need? The acceptable level of false negative risk for conversion optimization is often considered to be 20%, corresponding to an analysis power level of 80%.

There isn't a universally recognized standard for 80% power, but it represents a reasonable balance between alpha and beta errors. Consider the following:

- What is an acceptable level of risk for missing out on a quality improvement for you? 

- What is the minimum sample size required for the test to achieve the desired sensitivity?


## Calculating the statistical power of a test

You can use an A/B test calculator. Enter known variable values to determine, for example, the required sample size to achieve sufficient test sensitivity.

For instance, you calculated that testing each variant requires a sample size of 681 individuals. Your calculations were based on the following initial values: test power of 80%, alpha of 5% (95% statistical significance). You also knew the conversion rate for the control group is 14%, and you assumed an expected conversion rate for the better variant of 19%.

<Img
img="/uploads/calculate_the_statistical_power_of_a_test_848e9bae89.png"
alt="Calculation of the sample size"
src="How to calculate the statistical power of a test"
/>


Using the same initial data, knowing the sample size, alpha value, and the desired level of statistical power (for example, 80%), you can determine the minimum detectable effect (MDE).

<Img
img="/uploads/determination_of_mde_f4e64ce91b.png"
alt="Calculation of the minimum detectable effect (MDE)"
src="Determination of MDE"
/>


As we can see, an A/B test calculator is quite convenient when you know the values of three variables and aim to find the fourth one.

## What to do if the sample size cannot be increased?

In some cases, there's a need for a more high-powered test, but increasing the sample size is not possible, such as when the page traffic is too low.

Let's consider a scenario: you've inputted your data into the A/B test calculator, and it shows that a sample size of 8000 or more is required.

<Img
img="/uploads/use_a_sample_size_calculator_34fab3e500.png"
alt="Determining the required sample size"
src="How to use a sample size calculator"
/>

But you don't have the ability to gather such a sample; it would take several months or even longer. In this case, you need to increase the minimum detectable effect (MDE). In the example below, increasing the MDE from 10% to 25% reduces the sample size to 1356.

<Img
img="/uploads/sample_size_depends_on_increasing_the_mde_1aac156651.png"
alt="Increase the MDE to get the desired sample size"
src="Sample size depends on increasing the MDE"
/>


Is it really always possible to increase the MDE to 25%? After all, this will reduce the quality of the test.

The second option comes into play if you're willing to accept a 10% risk of type I error. In that case, the optimal option would be to decrease the test's significance level to 90%.

<Img
img="/uploads/balance_between_errors_within_calculator_1d200f99e4.png"
alt="Reducing the level of confidence to obtain the required sample size"
src="Balance between errors within sample size calculator"
/>

Iterating through data in hopes of obtaining satisfactory figures isn't the most reliable strategy. Analysts recommend starting by determining the sample size and then arbitrarily adjusting other values until the results are deemed satisfactory.

## Conclusion

Statistical power helps avoid errors during testing and identifies genuinely impactful performance factors on your platforms.

Adhere to these simple guidelines:

- Choose the test duration wisely: ideally 2-4 weeks 

- Use a test calculator to determine an acceptable test power 

- Adhere to the requirements for the minimum sample size 

- Aggregate segments and test them if needed 

- Set sensitivity test requirements only after meeting the minimum sample size requirements.

Source: [**CXL**](https://cxl.com/blog/statistical-power/)

Statistical power gauges a test's ability to detect differences. It helps avoid false conclusions by assessing the test's sensitivity to find genuine changes.

what-is-statistical-power.png

About how to correctly calculate the statistical power for testing.

Statistical Power: Definition, How to Calculate & Variables 

What is Statistical Power

<Video
url="https://www.youtube.com/embed/v20w8PAZprc?si=GSjfhUEawkAXvSy3"
/>

In 2023, retail sales online reached $6.3 trillion, and it's projected to surpass eight trillion by 2026. The shift of buying goods and services into the digital sphere is increasingly evident, intensifying competition in this space.

Retailers are now inventing new approaches, leveraging VR, AR, and other technologies for marketing purposes. They're also adapting existing tools (SEO, Push notifications, SMS, etc.) to maintain visibility to customers. Thus, as e-commerce expands, so does internet marketing, encompassing various channels and promotional strategies.

In the article, we'll delve into what e-commerce marketing entails, the tools it employs, and successful promotional strategies.

## What is E-commerce Marketing

Firstly, let's clarify what electronic commerce involves.

[**E-commerce**](https://altcraft.com/glossary/e-commerce-types-examples), or electronic commerce, refers to conducting business through online channels, which serve as the primary means of customer attraction and communication. It typically involves the online sale of goods and services.

The e-commerce market grows annually, largely supported by promotional channels. Digital marketing has long been a vital component of e-commerce. It's challenging to imagine an online store without email campaigns, advertisements, and other means that enhance product visibility.

E-commerce marketing encompasses digital methods and practices used to promote a business's goods and services online, aiming to boost sales. For e-commerce, marketers enhance brand recognition and highlight specific products to capture user attention. The tools of digital marketing vary based on the goals and objectives of the online business.

## E-commerce marketing tools

Internet marketing technologies evolve rapidly, but some core tools remain constant.

### Website and SEO

To establish an online presence, an e-commerce platform is essential – a software enabling the creation of an online store and the execution of transactions (payment, order processing). A user-friendly and properly functioning website or [**landing page**](https://altcraft.com/glossary/what-are-landing-pages-and-why-they-matter) is the foundation of e-commerce.

However, to gain visibility for your business, promoting the website is crucial. One effective method is SEO optimization. It's a technique that elevates your website's ranking in search engine results through keywords, page speed enhancements, and various strategies.

<Img
img="/uploads/seo_optimization_for_brand_promotion_75c86030ed.png"
alt="SEO optimization for brand promotion"
src="SEO optimization is a good method of brand promotion"
/>

### Advertising

Digital marketing in the online world encompasses various types of advertising chosen by businesses based on their objectives.

**1. Contextual**

Advertisements appear in search engine results based on user queries and include specific keywords.

<Img
img="/uploads/contextual_ads_in_google_f8aa934a4a.png"
alt="Contextual ads in Google"
src="Contextual ads within Google showing pictures marked as “product” with a link to a page of the online store"
/>

**2. Targeted**

Advertising messages are tailored to a specific audience (usually on social media) sharing certain characteristics. Unlike contextual advertising, targeting doesn't precisely know if a user needs the product or service, but it “guesses” their preferences and presents the relevant offer. Retargeting is a distinct form of targeted advertising, where users are shown products they previously viewed.

<Img
img="/uploads/targeted_advertising_from_360learning_afe48c1b08.png"
alt="Targeted advertising from 360Learning"
src="Example of targeted advertising from 360Learning"
/>

**3. Banner**

These are pop-up or static banners on websites.

<Img
img="/uploads/banner_advertising_c57e2eb84e.png"
alt="Banner advertising"
src="Example of banner advertising"
/>

**4. Native**

Embedded advertising within content that resembles recommendations and seamlessly fits into the material's context.

**5. Video advertising**

Clips shown before, during, or after main videos (trailers, informative content, etc.).

<Img
img="/uploads/video_ads_from_uber_21df244377.png"
alt="Video ads from Uber"
src="Example of video ads from Uber"
/>

### SMM

It's hard to imagine digital marketing without the support of social media, which sometimes become independent platforms for e-commerce. Companies use their social media pages to showcase products, create posts about their services, and engage with followers.

Social media platforms even offer their own sales tools, such as product cards on VK, for instance.

<Img
img="/uploads/smm_promotion_from_essie_4a41bf0f29.png"
alt="SMM promotion"
src="SMM promotion from Essie"
/>

### Email newsletter

The email marketing channel remains relevant and continues to be a crucial tool for internet marketing strategies. Emails are used to inform customers about new arrivals, promotions, order confirmations, payments, and delivery updates. In some cases, they also remind 'forgetful' customers [**who left items in their carts**](https://altcraft.com/blog/how-to-reduce-cart-abandonment-rate) but did not complete the purchase. Email remains a familiar and preferred means of communication with brands for many.

<Img
img="/uploads/newsletter_with_personalized_product_selections_10e6b3693b.png"
alt="Email newsletter with personalized product selections"
src="Email newsletter with personalized product selections from Sephora"
/>

### Push notifications
Internet marketing and e-commerce have long embraced [**push notifications**](https://altcraft.com/blog/mobile-marketing-101-push-notifications) – short messages that pop up on a smartphone screen. Their functions often mirror email, informing users about promotions, new products, or delivery statuses. The advantage of push notifications is their higher likelihood of being seen compared to an email in one's inbox.

<Img
img="/uploads/web_push_notification_91cafd836a.png"
alt="Web push notification"
src="Web push notification with the news from The Washington Post"
/>
### SMS

Though digital marketing leverages new tools, [**SMS messages**](https://techjury.net/blog/sms-marketing-statistics/) continue to be utilized. Their main advantage lies in their high delivery rates to recipients. While a user might not always see an email on the same day, or push notifications might be turned off, SMS messages [**boast an open rate of up to 98%**](https://techjury.net/blog/sms-marketing-statistics/). Text messages can be received without internet access, just by being connected to the network. Although they lack multimedia elements like photos or videos, SMS ensures precise delivery of information. The downside of SMS is its cost, but that doesn't deter e-commerce from choosing this promotional channel.

<Img
img="/uploads/sms_newsletter_ebd9ed3b1a.png"
alt="SMS newsletter"
src="SMS newsletter with offers from Adore Me"
/>

### Messengers

Communication via messaging apps [**has taken the world by storm**](https://www.similarweb.com/blog/research/market-research/worldwide-messaging-apps/). Hence, e-commerce also leverages this tool, aiming to cover all communication channels. 

[**Messaging apps**](https://altcraft.com/blog/messenger-marketing) have become one of the touchpoints where customers engage with online store managers.

<Img
img="/uploads/social_media_buttons_on_a_product_page_8232e93e74.png"
alt="Social media buttons on a product page"
src="Share via social media buttons on a product page"
/>

They also serve to promote products on websites. For instance, within the WhatsApp Business* features, there's an option to create product catalogs.

Telegram channels have become a distinct channel for content distribution, capable of functioning as a company blog.

### Content

Content marketing is an alternative to direct advertising. Through sharing useful, engaging, and entertaining content, trust and connections with the audience are formed. This approach to internet marketing doesn't pressure the user; instead, it gradually introduces them to the company's products and explains how to use them.

Content is published in various formats: articles in corporate blogs, posts on social media, videos on YouTube, podcasts, and more.

<Img
img="/uploads/useful_content_on_social_media_a1506fdb45.png"
alt="Useful content on social media"
src="Useful content on social media from a small brand"
/>

### AR/VR technologies in e-commerce

Internet marketing and e-commerce are swiftly adapting to high-tech advancements, integrating them into their promotional strategies. Through augmented and virtual reality applications, customers can virtually try on clothing or visualize furniture within the actual interior of their homes. Products with 3D visualizations are already surfacing in [**Google search results**](https://evergreen.team/articles/3d-and-ar-in-serp.html).

<Img
img="/uploads/vr_technology_1e2d78f963.png"
alt="VR technology"
src="VR technology from L'Oréal brand"
/>

## Strategies for digital marketing in e-commerce

Strategies for digital marketing in e-commerce vary based on business goals and capabilities. Here are examples of some methods used by marketers, individually or in combination:

### Working on the website

It's a misconception that merely [**creating a website**](https://altcraft.com/blog/ways-to-keep-visitors-on-your-website) will autonomously generate revenue. For e-commerce, the website needs constant improvement for user convenience and search engine optimization.

**To ensure successful indexing by search engines:**

- Develop content that addresses user queries rather than solely focusing on keywords. Search engines are smarter, so deceiving them with phrases like "buy cheap sofa" in a text about cucumber planting won't work. Factors like time spent on pages and bounce rate (the number of users leaving the site) are considered.

- Improve loading speed and site usability. Users won't wait for heavy images or animations to load. If they can't quickly understand how to place an order, they'll likely move to competitors.

- Adapt the site for mobile devices. Prioritize user convenience – the easier it is to order from a smartphone, the higher the chance of conversion. In 2023, having a site not optimized for smartphones is odd.

SEO is a long-term strategy that brings relevant leads. However, continually optimizing your web resources is essential; otherwise, you'll be overtaken by others.
### Content marketing
Content marketing is another long-term strategy essential for building trust with customers, increasing loyalty, and explaining how to use your products.

[**Content marketing**](https://altcraft.com/glossary/content-marketing-what-is-it-for-and-how-to-launch-it) is also intertwined with SEO because articles can incorporate user queries and keywords. Engaging content encourages readers to stay on the page longer, boosting its performance.

Additionally, content marketing includes publications on external platforms—partner blogs, specialized sites, social media, podcast platforms, and YouTube.

### Мultichannel marketing

[**Мultichannel marketing**](https://altcraft.com/en/features/omni-channel-marketing) involves synchronizing communication with customers across various channels. This means that data from emails, push notifications, SMS, messaging apps, and other sources are collected into a unified platform. For instance, if a user initiates contact with a company via email and later reaches out about the same order via a messaging app, a well-integrated multichannel approach merges these two interactions into a single record, avoiding duplicates and inaccurate data.

Multichannel marketing is crucial for [**personalizing interactions**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters) with e-commerce customers. By tracking every step and order of a customer's journey, a company can analyze this information and curate product recommendations or offer tailored incentives. This approach boosts loyalty and encourages repeat purchases. Centralizing and managing this data is often facilitated by a CDP.

### Social media

Social media is a straightforward way to reach an audience, analyze their interests, and needs. It's also an effective platform to seamlessly present your product. Some brands gain popularity primarily through their social media presence. For instance, the clothing brand IRNBY became known due to its founder Anastasia Mironova. She started as a fitness blogger, amassing over a million followers, later venturing into sportswear, and now designs clothing for everyday life.

<Gallery>
<GalleryItem
original="/uploads/networking_on_social_media_6ec088891c.png"
thumbnail="/uploads/networking_on_social_media_6ec088891c.png"
/>
<GalleryItem
original="/uploads/present_your_product_in_social_media_27e06b1522.png"
thumbnail="/uploads/present_your_product_in_social_media_27e06b1522.png"
/>
</Gallery>

Currently, the IRNBY brand has over 300,000 followers, and this account attracts attention not only because of the personal brand of its founder. It showcases stylish and unconventional photoshoots, often featuring atypical models.

<Gallery>
<GalleryItem
original="/uploads/example_of_smm_3ee21ab96a.jpg"
thumbnail="/uploads/example_of_smm_3ee21ab96a.jpg"
/>
<GalleryItem
original="/uploads/stylish_and_unconventional_photoshoots_3998b489de.jpg"
thumbnail="/uploads/stylish_and_unconventional_photoshoots_3998b489de.jpg"
/>
</Gallery>

This case also falls under [**influencer marketing**](https://altcraft.com/blog/what-is-influencer-marketing-how-to-build-strategy), where promotion occurs through a well-known personality. For instance, Reese Witherspoon was an ambassador for the beauty brand Avon and frequently appeared in the brand's advertising campaigns and catalogs.

<Img
img="/uploads/influencer_marketing_from_avon_512ad0f8d2.png"
alt="Influencer marketing"
src="Example of influencer marketing from Avon"
/>

### Personalized offers

Offering customers exactly what they want increases the chances of a purchase. E-commerce companies create individual product selections based on user data to showcase items that might appeal to them.

<Img
img="/uploads/individual_product_selections_bcbcbe3f37.png"
alt="Individual product selections from Nordstrom"
src="Personalization from Nordstrom"
/>

Online streaming platforms excel in creating selections based on user interests, assessing previously watched movies and series. This engagement often retains subscribers for the following month or encourages them to upgrade their subscription for expanded content access.

<Img
img="/uploads/selections_based_on_user_interests_dd894a9950.png"
alt="Selections based on user interests"
src="Offering TV shows based on preferences"
/>

### The PPC method

The Pay-Per-Click (PPC) advertising campaign is a time-tested promotion method where an ad is placed on a specific platform (website). Conducting such a marketing campaign is cost-effective since payment is made solely for the number of clicks it receives, directing users to the advertiser's site. This type of advertising is tailored according to users' search queries.

This method swiftly generates traffic and enhances the visibility of a company's products. Creating PPC campaigns requires a thorough understanding of the audience and the correct selection of keywords.

### Promotion through users

The first method is leveraging [**customer reviews**](https://altcraft.com/blog/how-to-use-customer-feedback-to-increase-sales) from satisfied buyers. When ordering products online, the opinions of other buyers play a significant role, with [**90% of people reading reviews**](https://inclient.ru/stats-reviews/) before making an online purchase. Hence, brands encourage users to leave their feedback.

The second method of promotion is through referral programs, also known as "refer a friend." An individual recommends an e-commerce business's product or service to someone they know. When the referred person makes a purchase, the existing customer receives a bonus, such as a discount, special terms, a gift, and so forth.

## Five examples of automated email chains for e-commerce

### Order tracking

Keep the customer informed about changes in the order status until its receipt after the purchase is made.

<Img
img="/uploads/scenario_order_tracking_bf69578786.png"
alt="Order tracking"
src="Scenario Order tracking"
/>

### Reminder about “Favorites” items

Often, people mark items as “Favorites” but forget about them. Remind the customer about the things they've saved for later but haven't purchased yet.

<Img
img="/uploads/reminder_of_favorite_items_20af74f2b8.png"
alt="Reminder of favorite items"
src="Scenario Reminder of favorite items"
/>

### Increasing abandoned cart efficiency

Another example of customers forgetting is when they add items to their cart but don't complete the purchase. The reasons can vary: the person got distracted and forgot, didn't add a payment method and postponed the purchase, or didn’t have enough funds on the card, and so on. Remind the customer about the [**abandoned items**](https://altcraft.com/blog/how-to-reduce-cart-abandonment-rate) via email. For regular customers, you can motivate them to make the purchase by offering a pleasant promo code available only for the items in their cart.

<Img
img="/uploads/improving_the_efficiency_of_the_abandoned_cart_fc4f0bb739.png"
alt="Improving the efficiency of the abandoned cart"
src="Scenario Improving the efficiency of the abandoned cart"
/>

### Personalized offers in the user account

Provide the customer with the opportunity to feel special. When they log into their account, show them a banner with a personalized offer.

<Img
img="/uploads/personalized_offers_in_the_personal_cabinet_6b98581802.png"
alt="Personalized offers in the personal cabinet"
src="Scenario Personalized offers in the personal cabinet"
/>

### Store anniversary

A great opportunity to thank customers for staying with us. Prepare an exciting contest or prize draw [**to enhance their loyalty**](https://altcraft.com/blog/customer-loyalty) and trust in the brand.

<Img
img="/uploads/birthday_of_an_online_store_c7a9775f81.png"
alt="Birthday of an online store"
src="Scenario Birthday of an online store"
/>

## Summary

E-commerce internet marketing encompasses a variety of online tools and methods that promote products and services for companies primarily operating through the internet. The primary goal is purchasing, achieved through various strategies: SEO optimization and website usability enhancements, content marketing, omnichannel approaches, social media management, PPC campaigns, personalized offerings, and others.

E-commerce marketing employs a diverse range of promotion tools: email, push notifications, SMM, messenger platforms, online advertising (targeted, contextual, and others), SEO, augmented and virtual reality solutions.

Strategies and tools are tailored individually by each company, depending on their goals and resources.

**Product of Meta, recognized as an extremist organization in Russia.*

E-commerce marketing uses online strategies, like SEO, content marketing, PPC, email, social media, and online ads, to drive sales and engage customers.

examples-strategies-of-internet-marketin.png

About what e-commerce marketing is and what tools are used in this process.

Examples & Strategies of Internet Marketing in E-commerce

Internet Marketing in E-commerce: Examples and Strategies

uzum-case.png

Reduced push notification opt-out rates, increased OR, saved working hours

bnb-bank-kejs-v-menyu.png

The open rate for automatic Viber messages is around 60%, and MAU growth for the year is +19%

All user information is systematically collected in a unified customer data platform

Distributing messages across various communication channels: email, SMS, push notifications, messengers

Promo codes, bonuses, and points for building long-term customer relationships

You can create and edit any HTML template, as well as save your own custom blocks

Personalized distribution of messages to clients through communication channels

Conducting experiments and optimizing marketing strategies

Tracking the effectiveness of marketing campaigns to make informed decisions

Connecting external systems to the platform and synchronizing data with company databases

Creating questionnaires, surveys, and feedback forms of any level of complexity

The ability to communicate with your clients anytime and anywhere

Increasing user awareness of your company's offers

Customer Data Platform

Omnichannel Marketing

Loyalty programs

HTML Email Builder

Personalized mailings

A/B/n Testing

Real-time analytics

Integration and WebHooks

Forms and Surveys

Messenger Communication

Pop-Up Windows

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