AngelCube Conversions Presentation by Scott Handsaker
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AngelCube Conversions Presentation by Scott Handsaker AngelCube Conversions Presentation by Scott Handsaker Presentation Transcript

  • Conversion funnels / Measurement Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • What are we going to cover?- Conversion funnels for a SAAS business- Performance measurement- Marketing dashboard- Useful tools- Creation of your own funnel and dashboard Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • What is a conversion funnel?“The path a prospect takes from anonymous user to payingcustomer, and every step in between” Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • What does it really look like?“The path from interested prospect to paying customer isfilled with so many holes that it is a wonder that anyone,anywhere ever gives you any money.” Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Why do we care?Tracked correctly, this data gives you:1. CPA per channel2. LTV per channel3. Conversion rate per channelUsed correctly, this data tells you:1. Where am I leaking?2. Where do I spend my marketing $$?3. How do I scale? Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • A fundraising storyThe power of understanding the economics of yourbusiness....1. Fundraising effort (A) - 2009- Very few second meetings- Very little sign of life- Failed2. Fundraising effort (B) - 2010- Second and third meetings EVERY TIME- Constant referrals- Success Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • TractionAccounts Created Events Created14012010080604020 0 January February March April May June July Free Paid Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • TractionTickets Sold Eventarc Revenue $8,000.00 $7,000.00 $6,000.00 $5,000.00 $4,000.00 $3,000.00 $2,000.00 $1,000.00 $0.00 February April June August January March May July Free Paid Eventarc takes $1 + 3% of all transactions Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Conversion Funnel for 2010We know we have opportunities in here... 100% Unique website visitor 8% Visit signup page 3.5% Create an account 1% Create an event 0.55% Sells a ticket 0.2% Makes us money Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Conversion FunnelBut improvement is possible..... From signup page to becoming an account holder Overall: 43% | July: 71% Account holders who created a free event Overall: 27% | July: 36% Account holders with a paying event Overall: 8% | July: 11% 2010 signups Event creators with a July signups paying event Overall: 29% | July: 31% Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Average Key Metrics Ticket price Tickets sold Events per $60 per event customer (annually) 42 4 Revenue per Revenuecustomer (annual) per event $470 $117 Cost Per Lifetime value of Acquisition a customer $250 $987 Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • DISCLAIMER!!!! Only include data like that if you have launched and have REAL data to show. Anything else is bullshit. Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Creating your own funnelMake sure you:1. Start at the acquisition channel2. Assume the $$ expenditure3. Assume conversions at each step4. Include an “activation” step5. Include a paying customer stepIdeally you end up with:CPA | Conversion rate | Activation Rate | LTV Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Actual numbers from Kissmetrics You will lose people when you introduce friction Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • I don’t know if this is good.
  • “All you have to do is hit this number...” Numbers are like the latest diet craze “All Company X had to do was _____ and they were profitable!”
  • Not everyone gets the same results from 12,000 calories per day
  • About the KISSmetrics dataObservations from 300+ web businesses Social/community sites • Content businesses • Consumer services • SaaS / Subscription • E-commerce • Daily Deal • Apps / Games • Professional blogsData from October 2009 - February 2011Benchmark data from February 2011
  • By business model Indirect Daily DealMonetization SaaS /E-commerce Subscription
  • Indirect MonetizationCustomer does not paySite types:Content and review sitesGames and community sites
  • What are they measuring: SignupHomepage > Facebook Connect > Signed UpHomepage > Viewed Signup > Submitted Signup FormSocial Share Landing Page > Social Connect > Signed Up
  • What are they measuring: SharingSignup > Shared / Liked / CommentedSignup > Started Configuration > Completed ConfigurationSignup > Contributed Content
  • Conversion = homepage -> signed up 9.6% median signup conversion 13.2% average signup conversion lowest 2.1% - highest 34.5% Indirect Monetization (21 sites, full month of Feb 2011)
  • Results may not be typical*• Self-selected audiences (professional, niche sites) have higher conversion rates• Aspirational services (finance, health) have higher conversion rates but lower retention rates• Where you put signup and how many steps are involved affects conversions
  • Questions you should ask: authentication• Am I losing customers before or after Facebook Connect?• Does offering multiple sign-in options help or hurt conversion rate?• Does asking for additional information post-Facebook Connect hurt conversion rates significantly?
  • E-CommerceCustomer pays, highly variable intentSite types:Electronic and tangible goods
  • What are they measuring: FindabilityHomepage > Browsed > Viewed Single ProductHomepage > Searched > Viewed Single ProductViewed Single Product > Viewed Recommended Product
  • What are they measuring: PurchasingViewed Single Product > Added to Cart > PurchasedViewed Single Product > Added to Cart > Created Account >Purchased
  • Conversion = purchase completed 5.9% median purchase conversion 9.3% average purchase conversion lowest 0.2% - highest 32.1% E-commerce (23 sites, full month of Feb 2011)
  • Results may not be typical*• Don’t even try to compare general consumer commodity, professional, and niche sites. Just don’t.• Sites who use PayPal or another off-site merchant solution have lower purchase completion rates• Purchase price and purchase frequency have a huge impact on completion rates
  • Questions you should ask: findability• Are customers who browse able to proceed and view an individual product?• Are customers who search able to proceed and view an individual product?• Are “browsers” or “searchers” more likely to complete purchase?• Are customers who enter the site directly on an individual product page more likely to complete a purchase?
  • Questions you should ask: checkout steps• How does requiring customers to create an account affect purchase completion?• Does offering multiple payment methods help or hurt purchase completion?• If account creation is moved to post-checkout, will customers complete that (now optional) step?• Are customers who drop out of the checkout process returning to other pages on your site?
  • SaaS / SubscriptionCustomer may or may not payUsually enters under a free plan or limited free trialBilling information may be required upfront or laterSite types:Consumer servicesSmall business services
  • What are they measuring: SignupHomepage > Signed Up for FreeHomepage > Started Free TrialHomepage > Viewed Pricing > Signed Up
  • What are they measuring: UpgradeSigned In > UpgradedViewed Upgrade Prompt > UpgradedSigned In > Viewed Pricing > UpgradedClicked Email Link > Upgraded
  • Conversion = homepage -> signed up 2.3% median signup conversion 3.3% average signup conversion lowest 0.2% - highest 14.5% SaaS (37 sites, full month of Feb 2011)
  • Conversion = upgraded 2.3% median subscription conversion lowest 0.3% - highest 8.9%SaaS (37 sites, full month of Feb 2011)
  • Results may not be typical*• B2C services have a higher signup rate than B2B services• B2B services have a higher upgrade rate than B2C services• Aspirational services (finance, health) have higher signup conversion rates• No significant difference in signup rate between sites with or without a product tour
  • Questions you should ask: free-ness• How does ‘sign up for free’, ‘free trial’, or ‘buy now - free for first X days’ affect initial conversion? Eventual upgrade?• Will changing the length of my free trial increase upgrades?• How does requiring billing information at signup affect initial conversion?• How does showing multiple plans (vs. only showing ‘free’ initially) affect initial conversion? Upgrade rate?
  • Questions you should ask: signup source• How do signups via a third-party partner differ from signups via your homepage?• Does initial signup via a mobile device affect activation?• Does initial signup via Facebook affect activation?• Do customers acquired via a deal or coupon behave differently in terms of usage or upgrade rate?
  • Questions you should ask: onboarding• Do customers who viewed a product tour complete initial onboarding/configuration more quickly?• How many new customers complete the minimal required onboarding within a week?• Does including a tour alongside the signup button affect initial signup? Eventual upgrade?• How quickly are customers able to use the core features of your product?
  • Marketing DashboardTracking all your key revenue and conversionmetrics over timeMonthly probably enoughSpending time automating this is highlyvaluableUse it to understand which metric you aretrying to enhance when testing Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Useful Tools and Further ReadingGeneral Analytics- Google Analytics / Kissmetrics / MixpanelA/B and Multivariate Testing- Google website optimizer / Kissmetrics /Visual Website OptimizerLanding Pages- Roll your own / Unbounce Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.
  • Conclusions1. You will be wrong2. This shit is hard3. Funnels are only linear in your head4. Understanding the economics of yourbusiness and acting upon the key drivers willinstantly put you in top 5% of founders5. Conversions matter Confidential material. Copyright © 2010 Eventarc Pty. Ltd. All rights reserved.