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David Skok, funnel design and optimization
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    David Skok, funnel design and optimization David Skok, funnel design and optimization Presentation Transcript

    • 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
    • You’ve  heard  all  about   Lean  Startup…   All  about  how  to  get   to  Product  /Market  Fit   What  comes  next?  
    • Search  for  Product/Market  Fit   Search  for  Repeatable  &  Scalable    Sales  Model   Scaling  the  Business  
    • 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  that  Customer  over  their  lifeRme  (LTV)  There  is  a  common  problem:     Startup  Killer  
    • An  out  of  balance  Business  Model   Entrepreneurs  are  over-­‐opRmisRc   Cost to Acquire a Customer (CAC) Monetization (LTV)
    • 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
    • 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  
    • Sales  Complexity   No  Touch   Light  Touch   High  Touch   Field  Sales   Freemium   Field  Sales   Self-­‐Service   Inside  Sales   Inside  Sales   with  SE’s  
    • How  I  assumed  the  two  would  relate  
    • 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  
    • The  rela3onship  is  roughly  exponen3al   Clearly adding Human Touch dramatically increases costs
    • CAC  (logarithmic)   10x   10x   10x   Sales  Complexity  
    • 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   HOW  IT  WORKS   Our  product     allows  you  …     Only  $9,999.99   BUY  NOW!  
    • THE  ART  OF  MARKETING  
    • THE  BUYER  
    • THE  BUYING  CYCLE   PURCHASE CONSIDERATION CLOSED DEAL AWARENESS
    • 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  
    • AN ORGANIZATIONALMETAPHOR FOR THE KEYFUNNEL STAGES SALES MIDDLE OF THE FUNNEL CLOSED DEALTOP OF THE FUNNEL
    • 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    
    • WHAT IS THE MIDDLE OFTHE FUNNEL? QUALIFY MQL (MARKETING QUALIFIED   LEAD)   NURTURE
    • 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.
    • 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.  
    • LEAD  NURTURING  •  Higher  value  if  they  are  TARGETED  directly  to   the  interests  of  the  reader  •  This  means  personalizaRon  •  Requires  LEAD  SEGMENTATION  
    • LEAD  SEGMENTATION   What  do  we  know   about  them?   What  do  their     acRons  tell  us?     Buyer   Behaviors   APributes  
    • 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.  
    • 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   TIME   TIME  
    • THE KEY METRICS CAMPAIGNS TO DRIVE TRAFFIC VISITORS OVERALL CONVERSION CONVERSION % % TRIALS CONVERSION % CLOSED DEALS
    • 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
    • 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
    • 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 CUSTOMER’S POINT OFVIEW
    • 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:     •  Give  away  documentaRon  to   get  their  email  address  
    • 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
    • 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
    • using engineering for marketing
    • 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
    • LED TO: SYSOMOS ARTICLES IN ECONOMIST, NY TIMES WEB TRAFFIC TO READ THE FULL REPORT LEADS – IMPRESSED BY THE CAPABILITIES OF THE SOFTWARE
    • First  Contact   Sell   Build   Build  First  Contact   Sell   RelaRonship   Trust  
    • OFTEN  NECESSARY  TO  FIND  TOPICS  THAT  ARE  NOT  RELATED  TO  THE  SALE   Build   Build   RelaRonship   Trust   First  Contact   Sell  
    • SELLING IS 10X EASIER…ONCE YOU HAVE ESTABLISHED TRUST
    • THE KEYS TO SUCCESS THE   BUYER   GET  INSIDE   YOUR  BUYER’S   MIND  
    • CONCLUSION
    • For  More  informa3on   n  Visit  my  blog  at  www.forEntrepreneurs.com