How Udemy got +150% more revenue (1 trick)

Understanding the importance of customer lifetime value (CLV) is crucial for any business, and this company discovered a powerful insight: revenue generated in the first week of a customer’s journey strongly correlates with an increased lifetime value. Armed with this data, they decided to optimize their welcome email strategy with an A/B test, and the results were game-changing.

The A/B Test Strategy

The team tested two different approaches to their welcome email, focusing on how to best engage new users and drive initial purchases:

  1. Control Email:
    • A generic email welcoming new users.
    • Included a 50% off coupon that could be applied to any course.
    • No personalization or targeted recommendations.
  2. Variable Email:
    • A more personalized email that leveraged behavioral data to target user interests.
    • Showcased a specific course in the email header that the user had already expressed interest in (e.g., courses they had browsed or interacted with on the website).
    • Offered the same 50% off coupon, but it was tied to the highlighted course.

Results

The personalized variable email outperformed the generic control email significantly:

  • It generated a 150% increase in revenue compared to the control email.
  • The strategy not only increased initial purchases but also set the stage for higher engagement and retention, potentially boosting customer lifetime value in the long term.

Why the Personalized Email Worked

  1. Relevance: By serving up a course that the user had already shown interest in, the email felt tailored and directly aligned with their needs or preferences.
  2. Reduced Decision Fatigue: Instead of asking users to browse through all courses, the email presented a clear, actionable option, simplifying the decision-making process.
  3. Increased Urgency: Highlighting a specific course with a time-sensitive discount created a sense of urgency, motivating users to act quickly.
  4. Emotional Connection: Personalized recommendations show that the brand understands and values its customers, fostering trust and engagement.

Lessons for Your Business

  1. Leverage Behavioral Data: Track user interactions, preferences, and behaviors to create personalized experiences.
  2. Optimize the Onboarding Journey: The first week is critical for engaging new customers. Focus on strategies that drive immediate value and purchases.
  3. A/B Test Your Emails: Always test different approaches to determine what resonates most with your audience. Small tweaks can lead to significant improvements.
  4. Make Offers Relevant: Tailor promotions to individual interests instead of using a one-size-fits-all approach.

The Takeaway

This case study highlights the power of personalization and data-driven marketing in driving revenue and improving customer lifetime value. By using behavioral insights to craft more relevant and engaging welcome emails, this company transformed a simple strategy into a highly effective revenue driver. Personalization isn’t just a nice-to-have—it’s a key to unlocking long-term customer relationships and maximizing business growth.

(Source: www.getvero.com)

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