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BUILDING A SALES & MARKETING MACHINE
Upsell/Cross Sell
CAC/LTV
Virality
Engagement
Retention
Freemium
ConversionRates
BY DAVID SKOK
FreeTrials
THE ART & SCIENCEOF GROWTH HACKING
Upsell/Cross Sell
CAC/LTV
Virality
Engagement
Retention
Freemium
ConversionRates
BY DAVID SKOK
FreeTrials
GROWTH HACKING
Accelerate GrowthThrough
Work on Funnel
A PERSONAL DEFINITION
INCREASEFLOW &CONVERSION
THIS USED TO BE MARKETING’S JOBWHAT’S CHANGED?
TODAY’S WORLD
• Freely available information• Free Trials• On-line reviews• Social Media commentary
THE CUSTOMER IS DOING THEIR RESEARCHBEFORE THEY COME AND TALK TO YOU
YOUR ON-LINE PRESENCE IS KEY
THE PRODUCT ISYOUR SALESPERSON
THERE’S A RICH FLOOD OF NEW DATA
METRICS
REQUIRES A NEW COMBINATION OF SKILLS
BOTH MARKETING AND TECHNICAL
DataScience
THE GROWTH HACKER
Creative Marketing
Inbound Marketing
CustomerExperience &
Product Design
Funnel Optimization
Instrumentation& Metrics
THE BASICSOF FUNNEL DESIGN
Suspects
Closed Deals
LoyalCustomers
who areAdvocates
Suspects
Closed Deals
LoyalCustomers
who areAdvocates
Virality
IN A PERFECT WORLD…
1 Step
IN A PERFECT WORLD…
MyProduct.com
HOW IT WORKSDESCRIPTIONOur product allows you …
BUY NOW!
Only $9,999.99
BUYERTHE
QUESTIONS & CONCERNS
• Will this solve my specific problem?• Is this the best product in the market?• Can I trust this vendor?• How hard is this to implement & use?• Is it a safe choice? (Who else is using it?)• Will I get a return on my investment?• Is it scalable, secure?• Etc.
DESIGNING YOUR FUNNEL
WHAT IS A FUNNEL?
ACTION
MOVEMENT
ACTION
MOVEMENT
ACTION
MOVEMENT
HOW DO WE DESIGN THE ACTIONS?
BUYERTHE
THE BUYERS JOURNEY
CONSIDERATION
CLOSEDDEAL
AWARENESS
PURCHASE
TRIGGERS• Moving house
• Movers, phones, cable TV, furniture, insurance, etc.
• Starting a new software project• PaaS (Platform as a Service), Dev Tools, etc.
• Need to hire a lot of new employees• Applicant Tracking System
• Just lost my data in hard drive crash• Backup software/service
• Read about a new scary computer virus• Anti-virus software
Suspects
ToFuTop of the
Funnel
MoFuMiddle of
the Funnel
ClosedDeals
SalesBottom ofthe Funnel
LoyalCustomers
who areAdvocates
CustomerSucess
RetentionFunnel
RetainExpand
Upsell / Cross sell
Nurture&
Qualify
Inbound &OutboundMarketing
Typical B2B FunnelAWARENESS CONSIDERATION PURCHASE
Suspects
ToFuTop of the
Funnel
Raw Lead
Inbound &OutboundMarketing
ToFu – Top of the FunnelAWARENESS
Email addressor other
contact info
Suspects
ToFuTop of the
Funnel
Inbound &OutboundMarketing
ToFu – Top of the FunnelAWARENESS
Latent Need?
• Buyer not aware they have a need• Or not aware there is a solution
Apparent Need?
• Buyer is aware they have a need,and they are looking for a solution
Suspects
ToFuTop of the
Funnel
Inbound &OutboundMarketing
ToFu – Top of the FunnelAWARENESS
Latent Need
• Market needs Education
Apparent Need
• Understand how they are looking• Ensure you get found during their
research
Suspects
ToFuTop of the
Funnel
Inbound &OutboundMarketing
ToFu – Top of the FunnelAWARENESS
Inbound Marketing
• Content Marketing• Blogging, YouTube, etc.
• Social Media for distribution
Outbound Marketing
• Cold calling – (Sales Development Reps)• Outbound email• Working with Partners
MoFuMiddle of
the Funnel
Nurture&
Qualify
MoFu – Middle of the FunnelCONSIDERATION
Raw Lead
MQL - Marketing Qualified Lead
MoFu – Nurture and Qualify
Nurture Qualify
Lead NurturingDatabase
Raw Lead
MQL
MoFu – Segment, Nurture & Qualify
Personalized Nurturing
QualifyRaw Lead
MQL
Segmented Database
What do we know about them?
Buyer Attributes
What do their actions tell us?
Behaviors
DATA: THE CROWN JEWELS
MARKETING INTERACTIONS
ENGAGEMENT / PRODUCT USAGE
SCREEN SHOT FROM TOTANGO
EXAMPLES OF USAGE:
• IN APP MESSAGING– “We noticed that you haven’t tried X feature. It has the following benefits.
Here is a link to a Video showing you how to use it.”
• EMAIL– Send to all RAW LEADS that are in the FINANCE vertical, we have a Webinar
showing how Customer X uses our product to do fraud detection.
• SALESFORCE.COM QUEUES– Add all Trial Users whose Engagement Score is below 50 to the Customer
Success Teams call queue
METRICS"IF YOU CAN NOT MEASURE IT, YOU CAN NOT IMPROVE IT."
- LORD KELVIN
METRICS FLOW / QUANTITY
CONVERSIONRATE
WHAT TO MEASUREFOR EACH STEP / ACTION:
NO OF ACTIONS % CONVERSION RATE
TIME TIME
VISITORS
CAMPAIGNS TO DRIVE TRAFFIC
TRIALS
CLOSED DEALS
CONVERSION %
CONVERSION %
THE KEY METRICS
OVERALL CONVERSION %
Visitors
Trial
5%
10%
$5,000 Customer
NOT ALL LEAD SOURCES ARE EQUALGoogle Ad Word Funnel FaceBook Ad Funnel
Visitors
Trial
2%
20%
$8,000 Customer
ROI by LEAD SOURCE
OVERALL CONVERSION %
(BY LEAD SOURCE)
Cost per lead
Lifetime value of the Customer
THEMAGIC OFFUNNELMATH
Raw Lead
Marketing Qualified Lead
Sales Accepted Lead
Opportunity
Closed Deal
FUNNEL MATH
20%
90%
25%
20%
CONVERSIONRATES
Raw Lead
Marketing Qualified Lead
Sales Accepted Lead
Opportunity
Closed Deal
REVERSE FUNNEL MATH
20%
80%
25%
20%
CONVERSIONRATES
Closed Deal1
Opportunity5
Sales Accepted Lead20
Marketing Qualified Lead25
Raw Lead125
SALES CAPACITY – A KEY PROBLEM
• An extremely common scenario:– Portfolio companies
miss their bookings by not having enough sales capacity
Quarter 1 Quarter 2 Quarter 3 Quarter 40
1
2
3
4
5
6
7
8
9
10
BookingsActual vs Budget
Actual Budget
Shortfall
SOLUTION
• Track Sales Capacity as a key metric• Hire ahead of the budget and sales plan• Build a recruiting machine• Build a superb On-Boarding training program
REFINING THE SOLUTION
• Become experts at Sales Coaching– Measure each step of the sale process
• Outbound calling• Leaving messages• Doing Demos• Closing
– Take the best at each stage and use to coach the worst
• Quickly remove the consistent non-performers
BUT EVEN IF YOU ARE MICROSOFT, CISCO, ORACLE, OR GOOGLEYOUR FUNNEL WILL HAVE
BLOCKAGE POINTS
Suspects Suspects
Suspects
SuspectsSuspects
Suspects
Suspects Suspects
Suspects
SuspectsSuspects
Suspects
IN DIAGNOSING MANY FUNNEL BLOCKAGE POINTS,I HAVE FOUND THAT THERE IS A
CLEAR PATTERN…
NOT MOTIVATED TO DOTHAT THEY ARE
CUSTOMERS WILL DOSOMETHING
YOU ARE HOPING YOUR
IN OTHER WORDS…
YOU DESIGNED YOUR FUNNEL THE WAY YOU HOPED IT WOULD WORK…
BUT YOU MAY NOT HAVE THOUGHT ENOUGH ABOUT
THE CUSTOMER’S POINT OF VIEW
JBOSS EXAMPLE
CUT THE DOWNLOAD RATE BY MORE THAN 10X
PUT A REGISTRATION FORM ON THEIR WEB SITE BEFORE A FREE DOWNLOAD
IMPACT
FRICTION
GET INSIDE YOUR CUSTOMER’S HEAD
CONCERNS
UNDERSTAND WHAT MOTIVATES THEM
MOTIVATIONS
FRICTION CONCERNS
JBOSS EXAMPLE
• Making $27,000 a month selling documentation
• Solution: • Give away documentation to
get their email address
EXAMPLE: DRIVING TRAFFIC TO YOUR WEB SITE
GETTING FOUNDNot going to find your site unless:
- On top page of Google search results
- Recommended by a trusted source
- Referred to in social media or blogosphere
friction &concerns
LESSONS FROM WEBSITE GRADER• Free tools drive viral spread• Low customer work required• High value delivered• Score leverages competitive urge, and acts as a trigger• Builds trust through clear
demonstration of expertise
GOOD LINKAGE TO NEXT STEP
using engineering for marketing
GROWTH HACKING
USING DATA TO DRIVE WEB TRAFFICSYSOMOS: SOCIAL MEDIA MONITORING
LEVERAGED THEIR DATABASE TO CREATE BLOG POSTS WITH DATA ON TOPICS OF CURRENT INTEREST:• IRAN ELECTION RIOTS• TWITTER’S GROWTH• FACEBOOK USAGE
LED TO:SYSOMOS ARTICLES IN ECONOMIST, NY TIMES
WEB TRAFFIC TO READ THE FULL REPORT
LEADS – IMPRESSED BY THE CAPABILITIES OF THE SOFTWARE
FREE TRIALSTHE PRODUCT IS YOUR SALES PERSON
WHAT IS YOUR TIME TO WOW! ?
Thanks to Gail Goodman of Constant Contact
WOW!
TIME TO WOW!
• How many steps?• How much time does it take?• How much FRICTION is involved
REMOVE STEPS& REMOVE FRICTIONe.g. Provide Sample Data instead of requiring them to load their own
WOW!
ANALYZE TRIAL STEPS AS THOUGH THEY WERE FUNNEL STEPS
Create a full profile
ImportContacts
Do a search for Prospects
See search results
Imagine a Sales Rep signing up for the old LinkedIn
WOW!
LOOK FOR BLOCKAGE POINTS
Create a full profile
ImportContacts
Do custom search for Prospects
See search results
Imagine a Sales Rep signing up for the old LinkedIn
HIGH FALL OFF RATES HERE
For an Outlook/Exchange User
WOW!Create a full profile
ImportContacts
Do custom search for Prospects
See search results
Downloadan App
Installthe App
Runthe App
APPLY BLOCKAGE POINT THINKING
WOW!
FRICTION
MOTIVATIONCONCERNS
Replace the downloaded App with request for emailcredentials and get contacts from Exchange.
Create a full profile
ImportContacts
Do a search for Prospects
See search results
• Concern:– I have tons of very private and confidential
emails. I don’t want anyone to read those.
You want me to give youthe password
to login to my email?!!!
APPLY BLOCKAGE POINT THINKING
WOW!
FRICTION
MOTIVATIONCONCERNS
Replace the downloaded App byconnecting to Contacts on iOS/Android
Create a full profile
ImportContacts
Do a search for Prospects
See search results
RE-THINK THE PROCESS
Source: Josh Porter – Designing for Social Traction
CONVENTIONAL APPROACH
SIGN UPFOR TRIAL
CONVERT TO
CUSTOMERWOW!
WOW! FIRST, REGISTER LATER WOW! SIGN UP
CONVERT TO
CUSTOMER
MAY VARY FOR DIFFERENTCUSTOMER TYPES
E.g. LinkedIn• Different personae:
– Recruiter– Sales person– Individual looking to find a job
MAKE SURE THERE IS A CLEAR PATH FOR EACH ONE
WOW!
A/B TESTINGWEB SITE, LANDING PAGES, PRODUCT DESIGN
ADD VIRALITY
Customer first sees your app
Tries it
Creates/sees information
that they want to share
Creates an invitation, looks up
addresses, and sends
Friend receives
information + invite to join
Friend decides to take a look
MEASURE FLOW & CONVERSION
Customer first sees your app
Tries it
Creates/sees information
that they want to share
Creates an invitation, looks up
addresses, and sends
Friend receives
information + invite to join
Friend decides to take a look
CONVERSION %
FRICTION
MOTIVATIO
N
CONCERNS
APPLY BLOCKAGE POINT ANALYSIS
Customer first sees your app
Tries it
Creates/sees information
that they want to share
Creates an invitation, looks up
addresses, and sends
Friend receives
information + invite to join
Friend decides to take a look
FOR MORE ON VIRALITY
The Science behind Viral Marketinghttp://www.forentrepreneurs.com/the-science-behind-viral-marketing/
WHY CHURN IS SO IMPORTANTSaaS & RECURRING REVENUE
Revenue Lost with 2.5% monthly Churn
Renewals
Lost dueto Churn
YEAR 3
$3m $7m
Becomes harder & harder to replace
this with new bookings
Renewals
Lost dueto Churn
YEAR 6
$30m $70m
CHI SCORECUSTOMER HAPPINESS INDEX
PROACTIVE STEPS TO REDUCE CHURN
• Identify high risk customers (CHI score)– Messaging (In-App, email) to try to correct– Calls from Customer Success team
PRODUCT STICKINESSCONTRASTING EXAMPLES
• SEO– High value in first 90 days– But not sticky
• Marketing Automation– Valuable Data that grows over time– Part of important daily workflows
NEGATIVE CHURN
INCREASED REVENUE FROM
RETAINED CUSTOMERS
LOST REVENUEFROM
CHURNED CUSTOMERS>
IMPACT OF NEGATIVE CHURNMRR (Monthly Recurring Revenue)
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 $-
$1,000.0
$2,000.0
$3,000.0
$4,000.0
$5,000.0
$6,000.0
$7,000.0
$8,000.0
5% Churn
0%
Negative 5% Churn
REQUIRES PRICING THOUGHT
At least one axis where pricing increases:
EnterpriseEdition
ProEditionBasic
Users
Features
Depth ofUsage
Examples:- Mailing list size- Database size- Amount of storage used
BUSINESS VALUE
MOST STARTUPS MARKETAROUND FEATURES
• Ensure the product delivers this value• Ideally in a measurable way
• Focus Customer Success team on getting this result
• Measure the increase/change from a baseline
• Provide feedback on ROI by quarterly email
WHAT IS YOUR BUSINESS VALUE?
BUYERTHE
THE KEYS TO SUCCESS
GET INSIDEYOUR BUYER’S
HEAD
BUYER PERSONA
What characteristic most clearly identifies this Persona?• Job role?• Looking for a particular type of product?
When purchasing this kind of product:• What pain are they trying to solve?• What are their desired Business Outcomes?• What are their key Decision Criteria?• Is this buyer persona going to be receptive to our product?
• If not, what would they be receptive to?• Feature changes• Competitive products
• What are their Perceived Barriers to making a purchase?
BUYER PERSONA
• Role / job description? • What is the primary goal of this person’s job? • What is the greatest pain in this person’s work life? • What is their role in the decision making process? • Who do they report to? • How does their boss measure their success? • Who are their key influencers? • What publications do they read, & what events do they attend? • What messaging will appeal to them?
Secondary Questions – useful for Messaging & Content Marketing
