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Startup Metrics for Pirates: AARRR !!! (Startup Metrics for Product Marketing & Product Management) Dave McClure Master of 500 Hats blog: http://500hats.typepad.com/ website: http://www.500hats.com/

Customer Lifecycle: 5 Steps to Success A cquisition : where users come from A ctivation : happy first experience R etention : users come back R eferral : users tell other people R evenue : you make MONEY!

A cquisition : where users come from

A ctivation : happy first experience

R etention : users come back

R eferral : users tell other people

R evenue : you make MONEY!

Customer Lifecycle / Conversion Behavior Website.com 4. REFERRAL 5. Revenue $$$ 2. Activation 3. RETENTION 1. ACQUISITION

Customer Lifecycle / Conversion Behavior Website.com Marketing Channels: largest-volume (#) lowest-cost ($) best-performing (%) 1. ACQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains

Marketing Channels:

largest-volume (#)

lowest-cost ($)

best-performing (%)

Customer Lifecycle / Conversion Behavior Website.com Activation Criteria: 10-30+ seconds 2-3+ page views 3-5+ clicks 1 key feature usage Do LOTS of landing page tests & A/B tests - just make lots of dumb guesses & iterate QUICK 2. Activation Homepage / Landing Page Product Features 1. ACQUISITION

Activation Criteria:

10-30+ seconds

2-3+ page views

3-5+ clicks

1 key feature usage

Customer Lifecycle / Conversion Behavior Website.com Automated emails are simple & easy retention feature lifecycle emails @ +3, +7, +30d event-based emails as they occur 2. Activation 1. ACQUISITION 3. RETENTION Emails & Alerts Blogs, Content System Events & Time-based Features

Automated emails are simple & easy retention feature

lifecycle emails @ +3, +7, +30d

event-based emails as they occur

Customer Lifecycle / Conversion Behavior Website.com Only encourage users to refer * after * they have “ happy” user experience; avg score >= 8 out of 10 2. Activation 3. RETENTION 4. REFERRAL Emails & widgets Campaigns, Contests 1. ACQUISITION

Customer Lifecycle / Conversion Behavior Website.com 2. Activation This is the part * you * have to figure out… I don’t know jack about your business 4. REFERRAL 3. RETENTION 5. Revenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, etc 1. ACQUISITION

AARRR!

Example Conversion Metrics (note: *not* actuals; your mileage may vary…) Category User Status Conv % Est. Value Acquisition Visit Site (or landing page, or external widget) 100% $.01 Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) 70% $.05 Activation Happy 1 st Visit (views X pages, stays Y sec, Z clicks) 30% $.25 Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) 5% $1 Activation Acct Signup (includes profile data) 2% $3 Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor (3+ visits in first 30 days) 2% $5 Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25

Example Conversion Metrics (note: *not* actuals; your mileage may vary…) Category User Status Conv % Est. Value Acquisition Visit Site (or landing page, or external widget) 100% $.01 Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) 70% $.05 Activation Happy 1 st Visit (views X pages, stays Y sec, Z clicks) 30% $.25 Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) 5% $1 Activation Acct Signup (includes profile data) 2% $3 Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor (3+ visits in first 30 days) 2% $5 Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25

Example Conversion Metrics (note: *not* actuals; your mileage may vary…) Category User Status Conv % Est. Value Acquisition Visit Site (or landing page, or external widget) 100% $.01 Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) 70% $.05 Activation Happy 1 st Visit (views X pages, stays Y sec, Z clicks) 30% $.25 Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) 5% $1 Activation Acct Signup (includes profile data) 2% $3 Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor (3+ visits in first 30 days) 2% $5 Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25

Example Conversion Metrics (note: *not* actuals; your mileage may vary…) Category User Status Conv % Est. Value Acquisition Visit Site (or landing page, or external widget) 100% $.01 Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) 70% $.05 Activation Happy 1 st Visit (views X pages, stays Y sec, Z clicks) 30% $.25 Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) 5% $1 Activation Acct Signup (includes profile data) 2% $3 Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor (3+ visits in first 30 days) 2% $5 Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25

Example Conversion Metrics (note: *not* actuals; your mileage may vary…) Category User Status Conv % Est. Value Acquisition Visit Site (or landing page, or external widget) 100% $.01 Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) 70% $.05 Activation Happy 1 st Visit (views X pages, stays Y sec, Z clicks) 30% $.25 Activation Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) 5% $1 Activation Acct Signup (includes profile data) 2% $3 Retention Email Open / RSS view -> Clickthru 3% $2 Retention Repeat Visitor (3+ visits in first 30 days) 2% $5 Referral Refer 1+ users who visit site 2% $3 Referral Refer 1+ users who activate 1% $10 Revenue User generates minimum revenue 2% $5 Revenue User generates break-even revenue 1% $25

Marketing Q: What channels / who do you market to? Test Multiple Channels & Different Segments Select & Focus on: High Volume High Conversion Low Cost Measure *deeper* down the conversion funnel, not just to website / landing page

Q: What channels / who do you market to?

Test Multiple Channels & Different Segments

Select & Focus on:

High Volume

High Conversion

Low Cost

Measure *deeper* down the conversion funnel, not just to website / landing page

Product Q: How do you choose what to build? Choose features for conversion improvement 80% on existing feature optimization 20% on new feature development Just guess, then A/B test … A LOT Rinse & Repeat

Q: How do you choose what to build?

Choose features for conversion improvement

80% on existing feature optimization

20% on new feature development

Just guess, then A/B test … A LOT

Rinse & Repeat

Founder/CEO Q: What metrics do you choose to watch? Hypothesize Customer Lifecycle & Refine Choose 5-10 conversion steps Measure & Iterate Delegate each Metric to someone to OWN

Q: What metrics do you choose to watch?

Hypothesize Customer Lifecycle & Refine

Choose 5-10 conversion steps

Measure & Iterate

Delegate each Metric to someone to OWN

Make Metrics your religion If it’s not measurable, it’s not actionable

Rydell & Quick