Lovellvgf10 funnel

Feeding the funnel:finding the levers to turn users into profits
Nicholas Lovell, GAMESbrief

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

What am I talking about?

The funnel
Users
Profits

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

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

Feeding the funnel
Marketing
PR
SEO
SEM/PPC
Unique users
Harness users to create virality:
Referrals
Facebook Connect
Importing contacts
Twitter
Cross-promote from other titles

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

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

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

Digression: what do users buy

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

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

Thank younicholas@gamesbrief.comFollow my blogwww.gamesbrief.comBuy my book

Lovellvgf10 funnel

by Nicholas Lovell

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