Startup Marketing Metrics for Pirates Aarrr

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Startup Marketing Metrics for Pirates Aarrr Internet Startup Dotcom Business

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<p>* reminder: National Talk Like a Pirate Day is Sept 19th!</p> <p>Startup Metrics for Pirates:</p> <p>AARRR!</p> <p>Dave McClure, Master of 500 Hats @ SXSW, March 2008blog: http://500hats.typepad.com/ website: http://www.500hats.com/ slides: http://slideshare.net/dmc500hats/</p> <p>Panel o PIRATES!Dave McClure, 500 Hats (moderator) Ted Rheingold, Dogster Todd Vernon, Lijit Hiten Shah, CrazyEgg Lance Tokuda, RockYou</p> <p>AARRRgendaPirate Warmups: EVERYONE! Startup Metrics: Pirate Dave Acquisition: Pirate Ted Activation: Pirate Todd Retention: Pirate Hiten Referral: Pirate Lance Revenue: (sorry, this ones all you, landlubber)</p> <p>Pirate WarmupsShip Ahoy! Yo-ho-ho, Yo-ho-ho! AARRR!</p> <p>More tips: TalkLikeAPirate.com</p> <p>Ship Ahoy!</p> <p>Yo Ho Ho! Yo Ho Ho!</p> <p>AARRR!</p> <p>Why You Should Be A Web 2.0 RR AR A Entrepreneur ! te air P</p> <p>BOOTY!</p> <p>Startup Metrics for Pirates: 5 Steps to Web 2.0 Booty!Acquisition: users come to site from various channels Activation: users enjoy 1st visit: "happy experience Retention: users come back, visit site multiple times Referral: users like product enough to refer others Revenue: users conduct some monetization behavior</p> <p>AARRR!</p> <p>Customer Lifecycle &amp; Conversion BehaviorSocial Network s Apps &amp; Widgets</p> <p>SEMBlogs</p> <p>SEO</p> <p>PR</p> <p>Campaigns, Contests Affiliate s</p> <p>Biz DevDirect, Tel, TV Campaigns, Contests</p> <p>Email</p> <p>Domain s</p> <p>1. ACQUISITION</p> <p>Homepage / Landing Page Product Feature s</p> <p>A ERR F . RE 4</p> <p>L</p> <p>ti Ac 2. tio va n</p> <p>Emails &amp; widgets</p> <p>ve Re 5. nu</p> <p>Ads, Lead Gen, Subscriptions, etc</p> <p>Biz Dev</p> <p>Website.com</p> <p>$$ e$</p> <p>Q: Business Model?Business Model can be one of the following: Get Users (= Acquisition, Referral) Drive Usage (= Activation, Retention) Make Money (= Revenue*)* ideally profitable revenue</p> <p>Note: *eventually* need to turn Users/Usage -&gt; Money</p> <p>Founder/CEOQ: Which Metrics? Why? A: Focus on Critical Few Actionable Metrics(if you dont use metric to make a decision, its not actionable)</p> <p>Hypothesize Customer Lifecycle &amp; Refine Choose ~5 Conversion steps (tip: Less = More) Delegate Each Key Metric to someone to OWN</p> <p>Product / EngineeringQ: What to Build? Why? A: Build Features that Increase ConversionWireframes = Conversion Steps Measure, A/B Test, Iterate FAST (daily/weekly) Optimize for Conversion Improvement 80% on existing feature optimization 20% on new feature development</p> <p>Marketing / SalesQ: What channels? Which users? Why? A: High Volume (#), Low Cost ($), High Conversion (%)Design &amp; Test Multiple Marketing Channels + Campaigns Select &amp; Focus on Best-Performing Channels &amp; Themes Optimize for *deeper* conversion, not just site/landing page Low-Hanging Fruit:</p> <p>1) Blogs, 2) SEO/SEM, 3) Landing Pages, 4) Automated Emails</p> <p>Customer Lifecycle / Conversion BehaviorSocial Network s Apps &amp; Widgets</p> <p>SEMBlogs</p> <p>SEO</p> <p>PR</p> <p>Campaigns, Contests Affiliate s</p> <p>Biz DevDirect, Tel, TV</p> <p>Email</p> <p>Domain s</p> <p>Marketing Channels: largest-volume (#) lowest-cost ($) best-performing (%)</p> <p>Website.com</p> <p>Customer Lifecycle / Conversion Behavior Campaigns, SEOSocial Network s Apps &amp; Widgets</p> <p>SEM</p> <p>PR</p> <p>Contests Affiliate s</p> <p>Blogs Email</p> <p>Biz Dev</p> <p>Domain s</p> <p>1. ACQUISITION</p> <p>Direct, Tel, TV</p> <p>Activation Criteria: 10-30+ seconds 2-3+ page views 3-5+ clicks</p> <p>on ati tiv Ac 2.</p> <p>Homepage / Landing Page Product Feature s</p> <p> 1 key feature usage do LOTS of landing page tests &amp; A/B tests make lots of dumb guesses &amp; iterate FAST</p> <p>Website.com</p> <p>Customer Lifecycle / Conversion BehaviorSocial Network s Apps &amp; Widgets Automated emails are simple, easy retention feature (but dont overdo it) lifecycle emails @ +3, +7, +30d status emails weekly/monthly event-based emails as they occur but: make it easy to unsubscribe Homepage / Landing Page2. iv Act</p> <p>SEM Blogs</p> <p>SEO</p> <p>PR</p> <p>Campaigns, Contests Affiliate s</p> <p>Biz Dev</p> <p>Domains</p> <p>Email 1. ACQUISITION</p> <p>Direct, Tel, TV</p> <p>ati on</p> <p>Product Features</p> <p>Website.com</p> <p>Customer Lifecycle / Conversion Behavior Campaigns, SEOSocial Network s Apps &amp; Widgets</p> <p>SEM</p> <p>PR</p> <p>Contests Affiliate s</p> <p>Blogs Email</p> <p>Biz Dev</p> <p>Domain s</p> <p>1. ACQUISITION</p> <p>Direct, Tel, TV Campaigns, Contests</p> <p>Homepage / Landing Page Product Feature s</p> <p>R FER . RE 4</p> <p>AL</p> <p>ti Ac 2. tio va n</p> <p>Emails &amp; widgets</p> <p>Website.com</p> <p>Encourage users to refer *after* they have happy user experience; avg score &gt;= 8 out of 10</p> <p>Customer Lifecycle / Conversion Behavior Campaigns, SEOSocial Network s Apps &amp; Widgets</p> <p>SEM</p> <p>PR</p> <p>Contests Affiliate s</p> <p>Blogs Email</p> <p>Biz Dev</p> <p>Domain s</p> <p>1. ACQUISITION</p> <p>Direct, Tel, TV Campaigns, Contests</p> <p>Homepage / Landing Page Product Feature s</p> <p>R FER . RE 4</p> <p>AL</p> <p>This is the part *you* have to figure out I dont know jack about your business</p> <p>on ati tiv Ac 2.</p> <p>Emails &amp; widgets</p> <p>ve Re 5. nu</p> <p>Ads, Lead Gen, Subscriptions, etc</p> <p>Biz Dev</p> <p>Website.com</p> <p>$$ e$</p> <p>Example Conversion Metrics(note: *not* actuals your mileage may vary.)</p> <p>CategoryAcquisition Acquisition Activation Activation Retention Retention Referral Referral Revenue Revenue</p> <p>Conversion StatusVisit Site (or landing page, or external widget) Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) Happy 1st Visit (views X pages, stays Y sec, Z clicks) Email/Blog/RSS/Widget/Acct Signup (anything that could lead to repeat visit) Length of Session / # of Clicks (length/intensity of engaged visit, &gt;180s) Email Open/ RSS view -&gt; Click/Repeat Visit (3+ visits in first 30 days) Refer 1+ users who visit site Refer 10+ users who activate User generates minimum revenue User generates break-even revenue</p> <p>Conv %100% 70% 30% 5% 10% 3% 2% 0.2% 2% 1%</p> <p>Est. Value$.01 $.05 $.25 $2 $1 $5 $1 $10 $5 $25</p> <p>MAARRRketing PlanMarketing Plan = F(Customer Acquisition Channels, Campaign Themes)3 Important Factors = Volume (#), Cost ($), Conversion (%) Measure conversion to target customer actions Test audience segments, campaigns, Call-To-Action (CTAs)</p> <p>Match Channel Costs to Revenue Potential</p> <p>Est. Conversion + Revenue Potential Avg Txn Value (ATV), Ann. Rev. Per User (ARPU), Cust. Lifetime Value (CLV) Design channels that cost 2m 0.1% -&gt; 4%</p> <p>39</p> <p>Change #1: Used MBL Widget to discover Blog URL User hits site and blog URL is automatically entered into input field using JS call to MBL Widget (running on our homepage)</p> <p>40</p> <p>Change #2: Use Blog URL to inspect blog1. Extract commonly used account name(s) from Widgets 2. Read Blogroll Use for default social network</p> <p>Lijit Networks, Inc.</p> <p>Change #3: Find other User Generated Content1. Using discovered Acct name(s), find other content 2. AJAX Screen entertains prospect during discovery</p> <p>42</p> <p>ValidationSignup Time Conversion 15m -&gt; ~2m 0.1% -&gt; ~4% (40x)</p> <p>Users CommentsEasy to install Took me only a few minutes Youre freaking me out, how did you get my blog URL.</p> <p>43</p> <p>http://ouriel.typepad.com/myblog/2007/08/execution-is--1.html</p> <p>AARRRgendaRetention: Pirate Hiten, Ship CrazyEgg</p> <p>Retention</p> <p>Before</p> <p>Before</p> <p>After</p> <p>After</p> <p>Results</p> <p>Before</p> <p>After</p> <p>AARRRgendaReferral: Pirate Lance, Ship RockYou</p> <p>QuickTime and a decompressor are needed to see this picture.</p> <p>AARRR!R for Referral</p> <p>The RockYou MissionTo engage the world through social applications</p> <p>RockYou Growth: Fastest Ever.50</p> <p>Registered Users (MM)</p> <p>40 30 20 10 0 1 3 5 7 9 11 13 Months (1) 15 17 19 21 23(2)</p> <p>Facebook platform launch</p> <p>Source: eBay Investor Presentation, RockYou eBay starts Q2 98, PayPal starts Q100, Yahoo! starts Q195, AOL starts Q192, Facebook starts Q404, and RockYou Starts Q405 Facebook data represents active users, which was disclosed on 12/05 and 12/06. Undisclosed active user data is extrapolated by applying an average active user penetration to global Unique Visitors (per comScore Media Metrix)</p> <p>Referral traffic is key for viral growthPrimary sources of referral traffic Install flow Engagement flow</p> <p>Install flow example for Bumper Sticker</p> <p>Engagement flow example for Friends for Sale</p> <p>Metrics for viral loopUserCall to action to invite friends x = invited friends</p> <p>Yes y% = accept rate</p> <p>Accept?</p> <p>No</p> <p>x * y &gt; 1 gives you viral growth!</p> <p>Typical viral numbersInstall flowx = 5 (friends invited on average) y = 22% (acceptance rate for invites) Viral factor = 5 * 0.22 = 1.1 VIRAL!!!</p> <p>Engagement flowx = 20 (friends invited on average) y = 6% (acceptance rate for invites) Viral factor = 20 * 0.6 = 1.2 VIRAL!!!</p> <p>Use multiple flows and channelsInstall flow x=5 y = 10% Viral factor = 5 * 0.1 = 0.5</p> <p>0.5 + 0.3 + 0.3 = 1.1 Engagement flow, invite channel VIRAL!!! x = 3 (invites)y = 10% (acceptance rate for invites) Viral factor = 3 * 0.1 = 0.3 Engagement flow, notification channel x = 6 (notifications) y = 5% (acceptance rate for notifications) Viral factor = 6 * 0.05 = 0.3</p> <p>Important tipsInstall flow should generate most of your referrals everyone installing will use that flow so make it good user test different calls to actions if all else fails, offer $10,000 for invites =) Engagement flows supplement virality not everyone will engage, generally weaker than install flow consider having the primary flow invite new friends user test different calls to actions if all else fails, offer $20,000! Decay invite rate decreases as you saturate acceptance rate decreases as you saturate engagement tends to decay continuous improvement required!</p> <p>AARRR!Any Questions, Ye Scurvy Dogs?Additional References: Influence: The Psychology of Persuasion, Robert Cialdini (book) Putting the Fun in Functional, Amy Jo Kim (etech 2006 preso) Futuristic Play, Andrew Chen (blog) Dont Make Me Think, Steve Krug (book) A Theory of Fun, Raph Koster (book, website)</p>