Active Leisure decided to optimize their online promotion strategy in 2015 when the tourism industry was experiencing a lull. Working with Yandex.Direct, the Novosibirsk-based company managed to increase their traffic, CTR, and sales by 500% without increasing their budget. Now they have expanded their franchise throughout Russia and have launched in Kazakhstan as well. The company’s owner, Vladimir Borisovich Iofin discusses the details in this interview.
- 18,300 — items on site
- 8 —stores in Russia
- 50% — Share of advertising budget allocated to Ya.Direct and Market
— Tell us how your business got started. What challenges did you face and how did you overcome them?
The business grew in part out of my personal hobbies. I do a lot of cycling and am a big fan of active tourism. The company was founded in Novosibirsk 15 years ago. The challenges we faced had to do with the fact that recreation culture took a big hit in the 90s. People were still ready to try new things, but we had to teach them how to make the most out of an active vacation. In 2003, we started publishing a free circular called “Hunting, fishing and tourism in Siberia” in order to promote active vacations. We published interviews with well-known people in Novosibirsk who are fans of traveling and extreme sports, and included useful advice and descriptions of new product that came in to our store. We worked to position Active Vacations as a high-end store — in addition to our wide-assortment of items from top brands, we drew attention to active vacation as a status symbol.
— In other words, you actively promoted the recreation culture. Have you managed to build a community around your brand?
Yes, we have our own club that has grown out of a small group of enthusiasts. Now it’s a lively community with its own events and festivals. The community has a base where you can rent equipment, look at tour options, and spend time with other like-minded people. We also help people figure out how to use the equipment and organize their own events. So we try to build a long-term relationship with customers based on trust.
— And has the economic situation affected your development strategy over the last few years?
Yes, in a big way. A lot of smaller players left the market, so we were able to pick up their share and push forward with our development plans. On the other hand, some customers started going for lower-cost, middle-quality items. We did not experience a dramatic shift in demand, however. Most people understand that you get what you pay for. The financial crisis did push us to mobilize and optimize our business processes, though. We worked with the Eurostudio agency to redo our online campaigns so that we’d get a greater return. Our traffic, CTR and sales increased by fivefold without increasing our budget, so that was a huge breakthrough for us. Despite the economic situation, we have managed to exceed our sales plan since we started working with the agency to optimize our campaigns.
By optimizing and expanding our Direct campaigns, we managed to increase our brand awareness, cross-sell related items, and increase our financial indicators. Then we moved to a new market to meet growing demand in Kazakhstan (due to exchange rates, customers in Kazakhstan now prefer to buy from Russia). Novosibirsk is well-positioned geographically and we decided to try selling in Kazakhstan. As a result, our sales increased by another 10%.
In 2016, we expanded our company to include 7 retail stores throughout various areas of the country. Once we opened in Moscow, we had truly become a nationwide chain.
— Is demand seasonal in your industry and, if so, how does this impact the life of the company?
Of course, there are seasonal fluctuations: people can only take fishing trips or go on active vacations when the weather is good in their particular region. Buyers prepare in advance for the season and check out the new products. Then they stock up on consumable goods when the season is in full swing.
Demand for motor-sport vehicles changes depending on the time of year: from ATVs to snowmobiles and motor boats to motor sleds.
Before the start of every season, we determine what items will be top priority and put together ads, promotions, and events using Yandex.Direct.
— How do you compensate for seasonal fluctuations in Direct? Do you deactivate certain campaigns temporarily?
No, we keep running our campaigns for off-season items. There are always people who want to buy sleds in the summer; we just prioritize based on the weather. Once ATV season ends, we focus on snowmobiles. We distribute our budget based on each campaign’s priority.
— How do you segment your audience and what strategies do you use to manage different types of customers?
It’s important for us to understand what kinds of vacations different groups of customers prefer. That way we can manage our product assortment effectively and work out a strategy for each segment. Some of the segments overlap. For example, hunters buy snowmobiles and fishermen buy boats. But there are also exceptions, such as when someone is focused exclusively on one hobby. Then again, there are others who have a whole garage full of motor-sport vehicles.
— At what point in your company’s development did you make your online debut and how effective did that turn out to be?
In 2008, we launched our website. It allowed us to reach customers in very remote areas, such as Yakutsk. Maintaining a retail store in every city is not always cost-effective.
— Walk us through how you created your site. How did you start and what were your main goals? How did you measure its effectiveness and what indicators did you focus on?
With the first site, we were primarily interested in supporting our image as a high-end store and did not measure conversions. Later on, though, we created two more versions. Now there are more than 18,000 items with carefully crafted product descriptions on our site. After we launched our Yandex.Direct campaign in Kazakhstan, we saw that we could actually sell remotely. So we made the decision to re-do the site and actively develop online sales in other regions where we didn’t have any retail stores. We redesigned the site based on audience analytics and 8-years experience in internet marketing. Our new site was designed to be responsive on mobile devices as well.
— Did you use Yandex.Metrica when you were preparing to relaunch your site?
Yes, we looked at user behavior and got our main statistics from Metrica, focusing particularly on Webvisor.
We looked at the homepage first and foremost: what sections users go to, where they click, etc. We decided to shorten the homepage because we saw that hardly anyone was looking at the articles and other sections in the lower half of the page.
— Tell us about your marketing strategy: what channels do you use to attract users?
Each region has its own development strategy: some work better offline and others promote the business online. For example, in Moscow it’s difficult for us to reach customers via ads on public transport, but this method has worked well for many years in Novosibirsk. Overall, a third of our clients find us thanks to recommendations and two-thirds find us on the internet. Placing our bet on internet marketing was not an easy decision, but it has definitely proven to be the strategically correct one.
— Which tasks do your online advertising channels solve and what place does Yandex occupy among other online channels? What tasks do you set for Yandex’s services? How do you evaluate their effectiveness?
Yandex is the main online advertising channel for us. Currently, 50% of our budget goes towards Direct and Yandex.Market, 20% goes towards other contextual advertising systems, and 30% goes towards promoting our presence on social networks and other online platforms. We also post our business in the Yandex Business Directory and have launched display ads on Yandex. These services have helped us solve tasks at every level of the sales funnel. We have increased our brand awareness in the regions where we operate, attracted more targeted users to our site, and have entered new regions. We’ve used web analytics to measure our site’s effectiveness and track our sales figures for new customers.
Before we started working with an agency in 2015, we were only using Yandex.Direct to advertise our largest and most expensive items. They suggested that we advertise our entire inventory, however, in order to encourage repeat purchases. For example, if a customer buys something small and is happy with it, then they are more likely to return to us and make a substantial purchase from a store they are familiar with. This strategy has worked; we have increased our audience coverage and sales across all our product divisions. We advertise 90% of our inventory using Yandex.Direct and our account quality index is 10 out of 10. I don’t think it would have been possible to grow as much and as quickly as we did if we hadn’t expanded and optimized our Yandex.Direct campaign strategy.