Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
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Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them

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Mike has grown FreshBooks from a one-man startup to a 30-person Web app company. He's going to teach you six essential terms that you need to understand in order to succeed with your app: 'Lifetime ...

Mike has grown FreshBooks from a one-man startup to a 30-person Web app company. He's going to teach you six essential terms that you need to understand in order to succeed with your app: 'Lifetime Value', 'Average Revenue per User', 'Churn', 'Gross Cost per Acquisition', 'Sales Funnel' and 'Customer Vintages'. He's then going to give an example with a real-life case study. This is one you can't afford to miss.

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Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them Presentation Transcript

  • “Flight systems” @MikeMcDerment – Co-Founder and CEO Feb 23, 2010 – #fowa
  • Thank You
  • Mike McDerment Co-founder, CEO
  • True or False: Technology is the hardest part of building a web app business?
  • False
  • Flight Systems Metrics and systems to help you navigate web app success.
  • … THE LEADER IN ONLINE BILLING AND BOOKKEEPING.
  • Customer Types Solo Team Recurring
  • Now for Web Apps! Recurring billing managed inside your app Accept credit cards inside your own app Real-Time payment notifications ( WEBHOOKS! ) http://developers.freshbooks.com/
  • Users Over 1,000,000 Users Since May 2004 Month
  • Let me apologize in advance…sorry aboot the MBA speak
  • Key Metrics for Web Apps • “How much do we spend to get a customer?” • Cost Per Acquisition ($) CPA • “How much do our customers pay us?” • Average Revenue Per User ARPU • “At what rate are customers cancelling?” • Churn (%) Churn • “How much is a customer worth over time?” • Lifetime Value Per Customer ($) LTV
  • CPA ARPU Churn LTV
  • Why is not enough. Less accurate Less flexible (can’t slice and dice) Can’t correlate to app usage/events Too important to outsource Tied to a vendor Besides…It’s easy!
  • Three systems to rule them all. Cookie Tracking DB Storage Reporting
  • Variables to track Unique URL’s Cookie Cookie Tracking Code
  • What to Track ( barebones ) and why. Referring Domain ( who sent them here? ) Ref URL ( what are their interests? ) Landing URL ( campaign, partner, ad unit? )
  • Data Base Storage Add a table to your Database Store alongside user profile
  • Search Sort Dump BONUS! Dashboard
  • How does a marketer get the data from a database?
  • Search it.
  • Sort it.
  • Dump it.
  • Case Study Assumptions Web Application Business model is “Freemium” $10,000 per month marketing budget 6 month campaign
  • Gross New Customers Acquired by Month 100 75 50 25 0 Jan Feb Mar Apr May Jun
  • Gross New by Marketing Spend (Vintages) 100 75 50 25 0 Jan Feb Mar Apr May Jun
  • What we learned 100 customers per vintage CPA of $100 ($10,000/100) 6 month close <- MASSIVE INSIGHT!!! 50% / 25% / 10% / 5% / 5% / 5% What else could we know? ARPU, LTV
  • Parting Thoughts on Flight Systems Too important to outsource It’s about data collection, not reporting It’s easy
  • Flight Systems Metrics and systems to help you navigate web app success.
  • Questions? Bring em! Twitter: @mikemcderment Email: mike@freshbooks.com Check out FreshBooks if you are building a web app! http://developers.freshbooks.com
  • Choose your own adventure.
  • 6 month campaign Spend Visitors Trials January $10,000.00 10,000 1,000 February $10,000.00 10,000 1,000 March $10,000.00 10,000 1,000 April $10,000.00 10,000 1,000 May $10,000.00 10,000 1,000 June $10,000.00 10,000 1,000
  • What your marketer gets… Hands on the wheel Self service Easy access to excel The data they need, when they need it!
  • How many customers did we get? # new customers Gross New
  • These systems help answer Who are our most valuable customers? Where did we get them? How do we get more?
  • CPA Marketing Spend ARPU Visitor Churn Lead LTV Paying Customers
  • Simple Conversion Funnel CPA ARPU Churn LTV