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Lovellvgf10 funnel

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A shorter version of Feeding the Funnel. I gave this presentation at the Virtual Goods Forum

A shorter version of Feeding the Funnel. I gave this presentation at the Virtual Goods Forum

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Transcript

  • 1. Feeding the funnel:finding the levers to turn users into profits
    Nicholas Lovell, GAMESbrief
  • 2. About me
    Former banker (I don’t do that anymore)
    Former web entrepreneur
    Founder of GAMESbrief (www.gamesbrief.com)
    Author of How to Publish a Game
  • 3. What am I talking about?
  • 4. The funnel
    Users
    Profits
  • 5. The funnel matters because it is your entire business
    To emphasise that, we need Equation I
    CPA < LTV = good business
    CPA > LTV = trouble
    Where:
    CPA is cost to acquire a user
    LTV is the Life Time Value of a user
    Why the funnel matters
  • 6. How most people start
    1% convert = £1,000.00
    1% convert = £10.00
    Say each costs £0.10
    Only if the average user stays for 100 months!
    I’ll get some visitors
    Some who visit will register
    Some who register will subscribe
    Subscribers will spend an average of £10 per month
    I’ll put my Maserati on order
  • 7. Feeding the funnel
    Marketing
    PR
    SEO
    SEM/PPC
    Unique users
    Harness users to create virality:
    Cross-promote from other titles
  • 11. Converting it
    Unique users
    Registered users
    Active users
    Paying users
    Revenues
    For your business:
    Draw the funnel
    Reduce to as few steps as possible
    Know the conversion rate for every step
    Tweak, iterate, test until you know exactly how your funnel converts
  • 12. Monetizing it
    Advertising
    Virtual Goods
    Revenues
    Subscriptions
    Downloads
    There are many sources of revenue
    Virtual goods / microtransactions are flavour du jour (and my favourite)
    In your own business, focus on ARPPU
  • 13. Find the levers
    Users are not the only metric
    The others depend on your business, but might include:
    Page views
    Video views
    Game downloads
    Purchase of a virtual item
    A metric that you can’t influence is no good
    Focus on LEVERS
  • 14. Digression: what do users buy
  • 15. If you can, harness virality
    A viral business can be an insanely profitable business
    CPA is close to zero, so even if LTV is low, your business is great
    Time for Equation II:
    Viral coefficient = A% x B x C%
    Where
    A% = Percentage of your users who invite a friend
    B = Number of friends they invite
    C% = Percentage of friends who accept the invitation
    If viral coefficient > 1.3, time to order the Maserati
  • 16. Levers are your secret weapon
    Find the metrics that have the biggest impact on the bottom line
    Try to reduce the metrics to one!
    Three is more usual
    Make sure they are LEVERS
    Laser-like focus on pulling and improving these LEVERS
    The result will be a better business and a happier team
  • 17. Thank younicholas@gamesbrief.comFollow my blogwww.gamesbrief.comBuy my book

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