Classplus Cracks the Code: Slashing CAC by 90% to Dominate the EdTech Market
Classplus, a leading edtech platform, achieved a remarkable reduction in Customer Acquisition Cost (CAC) over an 18-month period. Through strategic marketing initiatives and technological implementations, the company managed to decrease its CAC by approximately 90%, leading to significant market growth and improved business performance.
Company Background
Classplus is an innovative Edtech platform that empowers educators to create and manage their online presence. Prior to the CAC reduction initiative, the company was facing challenges in efficiently acquiring new customers, which was hindering its growth potential in a competitive market.
The Challenge
Classplus was grappling with a high CAC, which was impacting its profitability and scalability. The initial CAC was in the six-figure range (INR), significantly higher than desired for sustainable growth. This high acquisition cost was limiting the company’s ability to expand its market share and improve its bottom line.
Objectives
The primary objective was to substantially reduce the CAC while maintaining or improving the quality of acquired customers. Classplus aimed to achieve this reduction within an 18-month timeframe, with the goal of enhancing overall business performance and market position.
Strategy and Implementation
Classplus employed a multi-faceted approach to tackle the high CAC:
- Audience Reconciliation: The company consolidated campaigns from state-level to a broader level, effectively reducing Cost Per Lead (CPL).
- Communication Optimization: Multiple A/B tests were conducted to identify high-performing Call-To-Actions (CTAs) and asset categories with better Click-Through Rates (CTRs). Campaigns were then scaled based on these insights.
- Conversion API Implementation: This allowed for optimization of campaigns for lower-funnel events such as SQL (Sales Qualified Leads) and completed demos.
- Audience Testing: Over 30 different audiences were tested, including various lookalike audiences, interest-based audiences, and combinations thereof.
- Technology Integration: Leadsquared was introduced for Customer Lifecycle Management (CLM) journeys, and custom landing pages were developed to improve overall campaign performance.
Results
The implemented strategies led to a dramatic reduction in CAC, bringing it down to a five-figure amount (INR) - a decrease of approximately 90% from the initial figure. This reduction contributed to significant business growth:
- Classplus captured 50% of the market during the two-year period.
- The company became the market leader, holding approximately 70% market share.
- Overall Gross Merchandise Value (GMV) and revenue increased significantly.
Challenges and Solutions
Managing numerous A/B tests simultaneously and determining accurate attribution for each test posed challenges. These were addressed by implementing multiple tech solutions and standardizing the attribution model across the organization.
Lession Learned​
- Localization is not always beneficial; broader campaigns can be more effective.
- Allowing campaigns sufficient time to learn and optimize is crucial.
- Building a sustainable sales pipeline is essential for long-term success.
- Clear communication is key in driving successful marketing initiatives.
Organizational Impact
While the marketing team structure remained unchanged, the sales team had to be expanded to handle the increased influx of leads. Subsequently, the company was able to reduce the marketing budget while still generating higher revenue than ever before.
