(1) How efficiently does Hubble acquire customers?
They have been doing great in acquiring customers. They used LTV/CAC as the key metric to help
guide their spending on acquisition. Although, some channel-related issues are still not able to
be quantified, they still decide to focus on media at the bottom of the funnel. In addition, this
metric is constantly tracked, and corresponding actioned will be made towards these changes.
During the initial half-year period, Hubble obtained 95% of its sales via Facebook advertising. By
2016, Facebook and Google had dominated 70% of the market share and held significant growth
potential, maintaining their growth through paid digital marketing strategies. Nevertheless,
Hubble's affordable contact lens prices, while leading to a reduction in perceived quality, have
hindered their acquisition efficiency.
(2) How efficiently does Hubble retain customers?
It is relatively inefficient. They haven’t been spending much time on retaining customers, as they
thought retention was hard to predict. Customer's retention average monthly churn rate of 4%;
Hubble had an annual churn rate of 16%, with almost 1 in 5 customers churning each year. The
major reason for that churn is because these customers wore less lens in a year. When the churn
gets high, it also affects the company’s rationale to acquire more customer.
(3) What can Hubble do to improve its customer acquisition and retention effort?
To improve churn rate, Hubble could broaden their subscription services and include more
offerings for those low-frequent users. For example, they could regularly offer new types of
lenses that has new functions for subscribed users to try out, and some of these offering can be
limited edition to stimulate usage. Moreover, reputation is another key to work on. Branding
will bring the effect of retaining customers. Hubble needs to work on the quality side of their
brand, as it can be managed through letting more customers see the value of the product. They
may achieve this by emphasizing their affordable but at the same time high-quality value
proposition in either their advertising or online marketing contents.