Building aSALES & MARKETING MACHINEFUNNEL DESIGN AND OPTIMIZATION	                                CAC                     ...
You’ve	  heard	  all	  about	     Lean	  Startup…	              All	  about	  how	  to	  get	              to	  Product	  ...
Search	  for	  Product/Market	  Fit	                           Search	  for	  Repeatable	  &	  Scalable	                  ...
What is a“Repeatable, Scalable Sales         Model”
Three	  things	  •  Repeatable	  •  Scalable	  •  AND	  Profitable	  
The	  Key	  Elements	  behind	  “Business	  Model”	   •  Cost	  to	  Acquire	  the	  Customer	  (CAC)	   •  Profit	  from	 ...
An	  out	  of	  balance	  Business	  Model	                     Entrepreneurs	  are	  over-­‐opRmisRc	       Cost to    Ac...
Simple	  Customer	  Acquisi3on	  Funnel	             200	  Visitors	  required	  for	  1	  cust                           ...
Add	  in	  People	  costs:-­‐	  CAC	  increases	  drama3cally	      Input	  V ariables    Total	  Web	  V isitors         ...
Sales	  Complexity	                   No	  Touch	       Light	  Touch	      High	  Touch	                            Field...
How	  I	  assumed	  the	  two	  would	  relate	  
A	  rough	  es3mate	  of	  CAC	  versus	  Sales	  Complexity	                         No	  Touch	        Light	  Touch	   ...
The	  rela3onship	  is	  roughly	  exponen3al	                                                  Clearly adding            ...
CAC	  (logarithmic)	                                         10x	                             10x	                   10x	 ...
SALES	  &	  MARKETING	    FUNNEL	  DESIGN	  
st1    	  THE BASICSOF FUNNEL DESIGN
Expand	  Suspects	     Closed	  Deals	       Upsell	                                       Cross	  sell	  
IN	  A	  PERFECT	  WORLD…	              1	  Step	  
IN	  A	  PERFECT	  WORLD…	        	  	  MyProduct.com	                                                  DESCRIPTION	      ...
THE	  ART	  OF	  MARKETING	  
THE	  BUYER      	  
THE	  BUYING	  CYCLE	                               PURCHASE             CONSIDERATION                                    ...
TRIGGERS	    •  Moving	  house	           •  Movers,	  phones,	  cable	  TV,	  furniture,	  insurance,	  etc.	    •  StarR...
AN ORGANIZATIONALMETAPHOR FOR THE KEYFUNNEL STAGES                                     SALES              MIDDLE OF THE FU...
WHAT IS TOP OF THE FUNNEL? customer is not aware       customer has athey have a problem, or      problem and is   that yo...
WHAT IS THE MIDDLE OFTHE FUNNEL?              QUALIFY                 MQL                               (MARKETING QUALIFI...
WHAT IS THE MIDDLE OFTHE FUNNEL?                           QUALIFY                   MQL                                  ...
THE	  BUYER      	                          CONSIDERATION	                    ADDRESS	  THEIR	  QUESTIONS	  &	  CONCERNS	 ...
LEAD	  NURTURING	  •  Higher	  value	  if	  they	  are	  TARGETED	  directly	  to	     the	  interests	  of	  the	  reader...
LEAD	  SEGMENTATION	    What	  do	  we	  know	     about	  them?	              What	  do	  their	              	          ...
EXAMPLE	  SEGMENTS	                                                     Role	  in	  Purchasing	       Customer	  Size	    ...
MEASURE  "IF YOU CAN NOT MEASURE IT,  YOU CAN NOT IMPROVE IT."               - LORD KELVIN
WHAT TO MEASUREFOR	  EACH	  STEP	  /	  ACTION:	  NO	  OF	  ACTIONS	                     %	  CONVERSION	  RATE	            ...
THE KEY METRICS                    CAMPAIGNS                     TO DRIVE                     TRAFFIC                     ...
NOT	  ALL	  LEAD	  SOURCES	  ARE	  EQUAL	       Google	  Ad	  Word	  Funnel	          FaceBook	  Ad	  Funnel	             ...
Suspects                                                             Suspects                                        Suspe...
3   IMPROVE
IN DIAGNOSING MANY FUNNEL BLOCKAGE POINTS,I HAVE FOUND THAT THERE IS ACLEARPATTERN…	  
YOU ARE HOPING YOURCUSTOMERS WILL DOSOMETHINGTHAT THEY ARE	  NOT MOTIVATED TO DO
IN OTHER WORDS…YOU DESIGNED YOUR FUNNELTHE WAY YOU HOPED IT WOULDWORK…BUT YOU MAY NOT HAVE THOUGHT ENOUGH ABOUTTHE CUSTOME...
JBOSS EXAMPLEPUT A REGISTRATION FORMON THEIR WEB SITE BEFOREA FREE DOWNLOADIMPACTCUT THE DOWNLOAD RATEBY MORE THAN 10X
GET INSIDE YOURCUSTOMER’S HEAD            FRICTION &            CONCERNS
UNDERSTAND WHATMOTIVATES THEM           FRICTION &           CONCERNS           MOTIVATIONS
JBOSS	  EXAMPLE	  •  Making	  $27,000	  a	  month	  selling	  documentaRon	                  •  Solu3on:	  	              ...
EXAMPLE:	  DRIVING	  TRAFFIC	  TO	  YOUR	  WEB	                         SITE	                                   GETTING FO...
LESSONS FROM WEBSITEGRADER•    Free tools drive viral spread•    Low customer work required•    High value delivered•    S...
using engineering for marketing
USING DATA TO DRIVE WEBTRAFFICSYSOMOS: SOCIAL MEDIA MONITORINGLEVERAGED THEIR DATABASE TOCREATE BLOG POSTS WITH DATA ONTOP...
LED TO:          SYSOMOS ARTICLES IN          ECONOMIST, NY TIMES  WEB TRAFFIC TO READ THE FULL REPORT  LEADS – IMPRESSED ...
First	  Contact	                                   Sell	                            Build	        Build	  First	  Contact	...
OFTEN	  NECESSARY	  TO	  FIND	  TOPICS	  THAT	  ARE	  NOT	  RELATED	  TO	  THE	  SALE	                               Build...
SELLING IS   10X EASIER…ONCE YOU HAVE ESTABLISHED   TRUST
THE KEYS TO SUCCESS     THE	    BUYER        	                         GET	  INSIDE	                        YOUR	  BUYER’S...
CONCLUSION
For	  More	  informa3on	   n    Visit	  my	  blog	  at	  www.forEntrepreneurs.com	  	  
David Skok, funnel design and optimization
David Skok, funnel design and optimization
David Skok, funnel design and optimization
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David Skok, funnel design and optimization

  1. 1. Building aSALES & MARKETING MACHINEFUNNEL DESIGN AND OPTIMIZATION   CAC ROI by Viral Lead Coefficient Time to Source Recover LTV CAC Churn Rate Viral Cycle Conversion Time Rate
  2. 2. You’ve  heard  all  about   Lean  Startup…   All  about  how  to  get   to  Product  /Market  Fit   What  comes  next?  
  3. 3. Search  for  Product/Market  Fit   Search  for  Repeatable  &  Scalable    Sales  Model   Scaling  the  Business  
  4. 4. What is a“Repeatable, Scalable Sales Model”
  5. 5. Three  things  •  Repeatable  •  Scalable  •  AND  Profitable  
  6. 6. The  Key  Elements  behind  “Business  Model”   •  Cost  to  Acquire  the  Customer  (CAC)   •  Profit  from  that  Customer  over  their  lifeRme  (LTV)  There  is  a  common  problem:     Startup  Killer  
  7. 7. An  out  of  balance  Business  Model   Entrepreneurs  are  over-­‐opRmisRc   Cost to Acquire a Customer (CAC) Monetization (LTV)
  8. 8. Simple  Customer  Acquisi3on  Funnel   200  Visitors  required  for  1  cust Visitors 5% Trial Using Google: At 50c per click 10% Cost: $100 per cust Customer
  9. 9. Add  in  People  costs:-­‐  CAC  increases  drama3cally   Input  V ariables Total  Web  V isitors                  10,000   SEM  cost  per  click $                        0.50 Conversion  to  Trial  % 5% Trial  conversion  % 10% No  of  Sales  &  Marketing  Staff 3 Cost  per  e mployee  per  month $              16,500 Marketing and Sales people Flow Qty. Conversion  % involved: Total  Paid  Web  V istors                     10,000 CAC rises to Trials                              500   5% Customers                                    50 10% $1,000 SEM  Marketing  Spend $                  5,000   Total  Headcount  Costs $              49,500 Cost  of  Customer  Acquisition Without  headcount  costs $              100.00 With  headcount  costs $      1,090.00  
  10. 10. Sales  Complexity   No  Touch   Light  Touch   High  Touch   Field  Sales   Freemium   Field  Sales   Self-­‐Service   Inside  Sales   Inside  Sales   with  SE’s  
  11. 11. How  I  assumed  the  two  would  relate  
  12. 12. A  rough  es3mate  of  CAC  versus  Sales  Complexity   No  Touch   Light  Touch   High  Touch   Field  Sales   Freemium   Field  Sales   Self-­‐Service   Inside  Sales   Inside  Sales   with  SE’s   Rough Estimates of Cost of Customer Acquisition (CAC) $0-­‐   $50  –     $1,000  -­‐   $3,000  -­‐   $25,000  –   $75,000  –   $10   $200   $2,000   $8,000   $75,000   $200,000  
  13. 13. The  rela3onship  is  roughly  exponen3al   Clearly adding Human Touch dramatically increases costs
  14. 14. CAC  (logarithmic)   10x   10x   10x   Sales  Complexity  
  15. 15. SALES  &  MARKETING   FUNNEL  DESIGN  
  16. 16. st1  THE BASICSOF FUNNEL DESIGN
  17. 17. Expand  Suspects   Closed  Deals   Upsell   Cross  sell  
  18. 18. IN  A  PERFECT  WORLD…   1  Step  
  19. 19. IN  A  PERFECT  WORLD…      MyProduct.com   DESCRIPTION   HOW  IT  WORKS   Our  product     allows  you  …     Only  $9,999.99   BUY  NOW!  
  20. 20. THE  ART  OF  MARKETING  
  21. 21. THE  BUYER  
  22. 22. THE  BUYING  CYCLE   PURCHASE CONSIDERATION CLOSED DEAL AWARENESS
  23. 23. TRIGGERS   •  Moving  house   •  Movers,  phones,  cable  TV,  furniture,  insurance,  etc.   •  StarRng  a  new  sojware  project   •  PaaS  (Plalorm  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  sojware/service   •  Read  about  a  new  scary  computer  virus   •  AnR-­‐virus  sojware  
  24. 24. AN ORGANIZATIONALMETAPHOR FOR THE KEYFUNNEL STAGES SALES MIDDLE OF THE FUNNEL CLOSED DEALTOP OF THE FUNNEL
  25. 25. WHAT IS TOP OF THE FUNNEL? customer is not aware customer has athey have a problem, or problem and is that your product looking for a solution category existsGENERATE GET FOUNDAWARENESS    
  26. 26. WHAT IS THE MIDDLE OFTHE FUNNEL? QUALIFY MQL (MARKETING QUALIFIED   LEAD)   NURTURE
  27. 27. WHAT IS THE MIDDLE OFTHE FUNNEL? QUALIFY MQL (MARKETING QUALIFIED   LEAD)   NURTURE •  Blog •  eMail Campaigns •  Webinars Wait  for  a  Trigger   •  Free Trials •  Newsletters Or  try  to  create  a  Trigger   •  etc.
  28. 28. THE  BUYER   CONSIDERATION   ADDRESS  THEIR  QUESTIONS  &  CONCERNS   •  Will  this  work  for  my  situaRon?   •  Is  it  the  best  product  in  the  market?   •  Is  it  a  safe  choice?  (Who  else  is  using  it?)   •  Will  I  get  a  return  on  my  investment?   •  Is  it  scalable,  secure?   •  Is  it  easy  to  implement?   •  Will  I  get  good  support?   •  Etc.  
  29. 29. LEAD  NURTURING  •  Higher  value  if  they  are  TARGETED  directly  to   the  interests  of  the  reader  •  This  means  personalizaRon  •  Requires  LEAD  SEGMENTATION  
  30. 30. LEAD  SEGMENTATION   What  do  we  know   about  them?   What  do  their     acRons  tell  us?     Buyer   Behaviors   APributes  
  31. 31. EXAMPLE  SEGMENTS   Role  in  Purchasing   Customer  Size   Technical,  Business  buyer   Enterprise,  SMB,  VSB   Customer  or  Reseller   Ver3cal   Financial,  Pharma,  etc.   Areas  of  interest   SEO,  Social,  MoFU,  etc.  Stage  in  Sales  Cycle   Pre-­‐trial,  in-­‐trial,   Lead  Source  post-­‐trial,  purchased   Social  Media  Webinar,   SEO  keyword,  etc.  
  32. 32. MEASURE "IF YOU CAN NOT MEASURE IT, YOU CAN NOT IMPROVE IT." - LORD KELVIN
  33. 33. WHAT TO MEASUREFOR  EACH  STEP  /  ACTION:  NO  OF  ACTIONS   %  CONVERSION  RATE   TIME   TIME  
  34. 34. THE KEY METRICS CAMPAIGNS TO DRIVE TRAFFIC VISITORS OVERALL CONVERSION CONVERSION % % TRIALS CONVERSION % CLOSED DEALS
  35. 35. NOT  ALL  LEAD  SOURCES  ARE  EQUAL   Google  Ad  Word  Funnel   FaceBook  Ad  Funnel   Visitors Visitors5% 2% Trial Trial 10% 20% $5,000 Customer $8,000 Customer
  36. 36. Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects Suspects SuspectsBUT EVEN IF YOU ARE MICROSOFT,CISCO, ORACLE, OR GOOGLEYOUR FUNNEL WILL HAVEBLOCKAGE  POINTS
  37. 37. 3 IMPROVE
  38. 38. IN DIAGNOSING MANY FUNNEL BLOCKAGE POINTS,I HAVE FOUND THAT THERE IS ACLEARPATTERN…  
  39. 39. YOU ARE HOPING YOURCUSTOMERS WILL DOSOMETHINGTHAT THEY ARE  NOT MOTIVATED TO DO
  40. 40. IN OTHER WORDS…YOU DESIGNED YOUR FUNNELTHE WAY YOU HOPED IT WOULDWORK…BUT YOU MAY NOT HAVE THOUGHT ENOUGH ABOUTTHE CUSTOMER’S POINT OFVIEW
  41. 41. JBOSS EXAMPLEPUT A REGISTRATION FORMON THEIR WEB SITE BEFOREA FREE DOWNLOADIMPACTCUT THE DOWNLOAD RATEBY MORE THAN 10X
  42. 42. GET INSIDE YOURCUSTOMER’S HEAD FRICTION & CONCERNS
  43. 43. UNDERSTAND WHATMOTIVATES THEM FRICTION & CONCERNS MOTIVATIONS
  44. 44. JBOSS  EXAMPLE  •  Making  $27,000  a  month  selling  documentaRon   •  Solu3on:     •  Give  away  documentaRon  to   get  their  email  address  
  45. 45. EXAMPLE:  DRIVING  TRAFFIC  TO  YOUR  WEB   SITE   GETTING FOUND Not going to find your site unless: friction & -  On top page of Google concerns search results -  Recommended by a trusted source -  Referred to in social media or blogosphere
  46. 46. LESSONS FROM WEBSITEGRADER•  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
  47. 47. using engineering for marketing
  48. 48. USING DATA TO DRIVE WEBTRAFFICSYSOMOS: SOCIAL MEDIA MONITORINGLEVERAGED THEIR DATABASE TOCREATE BLOG POSTS WITH DATA ONTOPICS OF CURRENT INTEREST:•  IRAN ELECTION RIOTS•  TWITTER’S GROWTH•  FACEBOOK USAGE
  49. 49. LED TO: SYSOMOS ARTICLES IN ECONOMIST, NY TIMES WEB TRAFFIC TO READ THE FULL REPORT LEADS – IMPRESSED BY THE CAPABILITIES OF THE SOFTWARE
  50. 50. First  Contact   Sell   Build   Build  First  Contact   Sell   RelaRonship   Trust  
  51. 51. OFTEN  NECESSARY  TO  FIND  TOPICS  THAT  ARE  NOT  RELATED  TO  THE  SALE   Build   Build   RelaRonship   Trust   First  Contact   Sell  
  52. 52. SELLING IS 10X EASIER…ONCE YOU HAVE ESTABLISHED TRUST
  53. 53. THE KEYS TO SUCCESS THE   BUYER   GET  INSIDE   YOUR  BUYER’S   MIND  
  54. 54. CONCLUSION
  55. 55. For  More  informa3on   n  Visit  my  blog  at  www.forEntrepreneurs.com    

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