Presentation on monetization and ltv

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Presentation given at Groundworks Labs on how to grow your company by focusing on customer lifetime value (LTV) and monetization.

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Presentation on monetization and ltv

  1. 1. Monetization and Lifetime Value HOW LIFETIME VALUE DETERMINES YOUR SUCCESS AND HOW TO IMPACT IT
  2. 2. Presentation OverviewRelevant backgroundWhy Lifetime ValueImportance beyond social mediaViralityRetentionMonetizationLTV varies among customers
  3. 3. Relevant Background FROM START-UP TO BIGCO
  4. 4. Been there, done thatCo-founded Merscom CCO, led all marketing/sales/distribution• Grew to top-5 casual game company• Initiated and negotiated sale to Playdom, which was then rolled into $570 million Disney acquisitionGM of Playdom’s International Publishing team• Responsible for Europe, Latin America, Russia and India• Grew it from scratch to 25 percent of Playdom’s revenueCEO of FiveOneNine Games• Joint venture of EW Scripps and Capitol Broadcasting• Launched Facebook and mobile gamesCurrently consulting for The Jockey Club and Curious Sense, Chairman ofGlobalization Committee at NC Central’s School of Business
  5. 5. Why Lifetime ValueTHE THREE MOST IMPORTANT LETTERS FOR YOUR BUSINESS: LTV
  6. 6. Function of three performance metricsMonetizationViralityRetention
  7. 7. Interdepence
  8. 8. Relationship between LTV and CPALTV > CPA• SuccessLTV < CPA• Failure
  9. 9. Think of LTV starting day 1 Design and Beta and Post launch develop other testing to focus onGreen-light focused on to optimize improving LTV LTV LTV
  10. 10. Importance beyond social media CRUCIAL TO ANY BUSINESS
  11. 11. Online offerings Netflix Ebates Farmville
  12. 12. B2BSquareRackspaceBronto
  13. 13. SaaS Salesforce HootSuite Basecamp
  14. 14. RetailRestaurantsDepartment storesCar dealers
  15. 15. ViralityWORD OF MOUTH’S EXPONENTIAL EFFECT
  16. 16. Definition of virality K-score K=i*conv% (conversion percentage), where “i” is the number of invites sent out by each new customer and “conv%” is the percentage of invites that convert into costumers
  17. 17. An advanced look
  18. 18. Importance of viralityLowers cost ofcustomeracquisitionExponentialgrowth
  19. 19. Improving ViralityK=i*conv%Increasing I• Generate virality quickly• Cater to ConnectorsIncreasing conv%• Quality of communication• Provide value for virality
  20. 20. RetentionCRUCIAL AND HARD TO FIX
  21. 21. Definition of retention Customer lifetime N-day retention Churn rate
  22. 22. Importance of retention If they do not come back, monetization improvements are virtually useless
  23. 23. Improving retention Product quality Get in their heads Make it social Make it global Use email and advertising for re- engagement
  24. 24. MonetizationSHOW ME THE MONEY
  25. 25. Definition of monetization ARPDAU Percentage of ARPU (Average (Average customers whorevenue per user) revenuer per monetize daily active user) Average number Average of monetization transaction events per customer
  26. 26. Importance of monetization
  27. 27. Improving monetization Product qualityPromotions Value and sales Shopping Moreexperience selection Balancing
  28. 28. LTV varies among customers THERE IS NO SINGLE LTV
  29. 29. CohortsTime of yearStage of product lifecycleHolidays
  30. 30. SegmentsAgeSexIncomeInterests
  31. 31. SourcesIncentived Targeted Television ads search ads Cross Virality Press promotion
  32. 32. Thank youLLOYD@VERUSENTERTAINMENTGROUP.COM WWW.LLOYDMELNICK.COM @LLOYDMELNICK

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