Navigating Market Volatility: Strategic Efficiency with Nexoya

Short Overview of bike-components

bike-components, founded by passionate cyclists Marcus Wenkel and Klaus Hoenig in 1997, has evolved into a leading omni-channel e-commerce company. Based in Würselen, Germany, the company has about 240 employees and generates over 100 million euros in revenue with its 68,000 products. Specializing in bikes, bike components, tools, clothing, and accessories, bike-components caters to sport enthusiasts, hardcore athletes, and professionals alike.

Breaking the Silos and Overcoming Market Volatility with In-House Optimization

As bike-components continued to grow, they faced several challenges that hindered their ability to optimize their marketing efforts and maintain efficiency. 

1. Complexity of Setup and Time-Consuming Processes

Having successfully established a strong market position by focusing on a clear niche and providing high-quality services, bike-components was poised for further growth. Recognizing the importance of maintaining a presence across multiple channels, they initially relied on various marketing agencies to manage these channels separately. However, this needed a different approach to satisfy the growing business. Managing each channel in isolation led to a lack of holistic overview, unrealized potential, and missed optimization opportunities. Very soon the team realized that they needed a comprehensive, cross-channel view to fully leverage their potential.

As a result, last year, bike-components decided to build their own performance marketing department to break down silos and manage these processes in-house. The primary goals of this department were to optimize ROAS and POAS, ensuring the company could continue to grow effectively. Despite their efforts, the complexity of their advertising setup across numerous channels—including display providers, social media, and search—spanning over ten countries and resulting in approximately 200 campaigns, proved challenging without having a specialized tool.

2. Efficiency in a Volatile Market

The need for efficiency became even more urgent due to the volatile market climate. Economic challenges such as declining consumption, energy crises, and inflation significantly impacted ecommerce businesses. The biking industry was no exception; on the contrary, it was heavily influenced by these external factors. During the initial COVID-19 boom, there was a surge in outdoor sports as people prioritized health and mobility. In the bike industry, most products are sourced from Asia and have a long lead time, leading retailers to over-order to meet demand. The war, followed by inflation and the energy crisis in Europe, resulted in a decline in consumption, which was followed by an oversupply.

In this challenging environment, bike-components needed to significantly limit their ad spend to remain efficient. Their goal was to achieve target ROAS and POAS while cutting costs and investing only in the best-performing channels.

3. Need for Data-driven Budget Planning

Having limited budgets, the team faced crucial questions like: “How much budget will we need to achieve our target ROAS/POAS?” and “How much budget will we need to reach our goals this month or this quarter?”. The team knew that making data-driven decisions, rather than relying on guesses, was crucial, especially with their constrained financial resources. 

Berno, head of performance marketing at bike-components quickly realized that to retain their competitive advantage the team required an innovative solution that could automate the time-consuming processes of data analysis, campaign comparison, and optimization. They needed a platform that could help them optimize their cross-channel advertising portfolios and provide data-driven insights on how to plan their marketing budget in the most efficient way.

This is where Nexoya came into play, providing the automated and comprehensive solution bike-components needed to navigate their complex advertising landscape efficiently.

Unlocking Efficiency and Strategic Growth with AI-Powered Insights

At the beginning of the year, bike-components decided to test Nexoya’s AI marketing analytics tool, starting their three-month pilot phase. The results exceeded their expectations. Not only did Nexoya optimize their campaigns, but it also provided the team with deeper insights into their data. Despite initial skepticism about some of the recommendations, the team applied Nexoya’s proposals and consistently saw remarkable outcomes.

The most significant benefit for Berno and his team was the substantial time savings. This allowed him and his team to focus on more strategic tasks, such as creating high-quality content assets and further growing/developing their performance marketing department. Nexoya effectively addressed the silo problem, enabling the team to gain a comprehensive view of their cross-channel efforts. They could now see how different channels influenced each other, leading to more efficient budget allocation and improved internal communication between teams.

Nexoya took on the role of a copilot, helping bike-components find the most efficient trajectory to achieve their target ROAS and POAS. The tool improved their efficiency by allowing them to cut costs and invest only in the best-performing channels. Despite market fluctuations, pricing changes, and seasonality challenges, Nexoya enabled the team to achieve their set targets consistently.

The Scenario Simulation feature of Nexoya was particularly valuable. It allowed the team to simulate and predict various scenarios for different business outcomes, such as revenue or profit. They could estimate the efficiency of their current budget distribution, determine if increasing the budget would lead to better results, and monitor the accuracy of predictions by validating results. This feature saved a significant amount of time, which the team could then invest in more strategic tasks.

“Nexoya’s Scenario Simulation enabled us to explore various budgeting scenarios effortlessly. By clearly understanding potential revenue outcomes, we could strategically advocate for more flexible budgeting.”

Nathalie Huber, Performance Marketing Manager at bike-components

bike-components was delighted with the results and looked forward to continuing their partnership with Nexoya. The platform helped them answer critical questions about budget requirements to achieve their goals, ensuring efficient control over ROAS and POAS with scalable potential.

“Nexoya has significantly streamlined our operations, saving us a tremendous amount of time. This allowed our team to focus on creating high-quality content and strategic development. Thanks to Nexoya’s recommendations, we also saw an increase in Revenue and Profit while maintaining a stable gross profit margin. We look forward to continuing our partnership and achieving even greater efficiency.”

Berno Delius, Head of Performance Marketing at bike-components

Key Benefits for bike-components:

1. Time Savings: Nexoya significantly streamlined operations, allowing the team to focus on more strategic tasks.
2. Holistic Cross-Channel View: Provided a comprehensive understanding of how different channels influence each other, improving budget allocation and internal communication.
3. Efficiency and Cost Savings: Helped cut costs and invest only in the best-performing channels, consistently achieving target ROAS and POAS.
4. Scenario Simulation: Enabled accurate predictions and strategic budgeting decisions, enhancing flexibility and efficiency.

Overall, Nexoya not only helped bike-components optimize their marketing efforts but also provided them with the flexibility and strategic insights needed to navigate a complex and volatile market successfully. The company is excited to continue using Nexoya to allocate their budget efficiently and reach their ambitious performance targets.