Slideshow Transcript

1. Slide 1: Going to Market Using a Metrics Driven Go To Market Approach to Gain Traction & Build Momentum Sean Ellis Go To Market Advisor for Startups Blog: Startup-Marketing.com Email: sean (at) startup-marketing.com
2. Slide 2: This Approach Has Evolved Over 5 Startups Startup When My Role Description Stage 1996 - 2001 VP Marketing Leader Online NASDAQ IPO in Uproar Games 2000, Acquired by Vivendi Universal 2003 - 2008 VP Marketing Leader Remote Filed for NASDAQ LogMeIn PC Access IPO in Jan 2008 Jan 2008 - VP Marketing Leader Email VC (A) – Khosla Xobni Current Interim, Advisor Contact Profiles Ventures, FRC Eventbrite Aug 2008 - Go To Market Event VC (A) – European Current Advisor Management Founders’ Fund Sep 2008 - Go To Market Cloud/PC/Mac VC (seed) - Dropbox Current Advisor Folder Sync Sequoia First six months most important marketing stage for long-term success. Startup-Marketing.com
3. Slide 3: Go To Market Process Builds Momentum Each step is critical to maximizing the potential of the next step 1) Discovery 2) Metrics Driven Iteration 3) Plan/Manage Growth Find “Must Have” Users Experiment & Optimize Budget, Team, Users Startup-Marketing.com
4. Slide 4: Discovery: Begin Early User Flow Free channels can generally create enough early user flow Start developing free marketing channels early 1. Beta invites  Test variations of invite prompt, invite message, conversion page  Press like TechCrunch and Mashable will often distribute a small number of invites 2. Blog, beta news sites, etc. * If you are not ready to absorb the users, create waiting list. Startup-Marketing.com
5. Slide 5: Discovery: Understand Who Needs It & Why Interview/survey user base frequently to validate or refine target hypothesis. Need/Problem? M es sage Th Mot at ivat es ? “Must Have” Alternative Users? Solutions? * The Four Steps to the Epiphany by Steven Blank recommended for this step. Startup-Marketing.com
6. Slide 6: Discovery: Determine Your Key Metrics Potential Conversion Metrics Potential Acquisition Metrics 1. Visit-to-registration rate 1. User acquisition sources (Or visit to download rate) 2. Viral coefficient (# additional 2. Registration-to-trial rate users acquired for each new) 3. Trial-to-transaction rate 3. Allowable acquisition costs Potential Transaction Metrics 1. Average revenue per user 2. Average transaction size 3. Transactions per customer 4. Months per subscriber Potential Service Cost Metrics Focus on actionable metrics that 1. Cost of service for free improve results & decisions users & paid users Startup-Marketing.com
7. Slide 7: Metrics Driven Iteration: Optimize Funnel 30% Increase funnel conversion rates Visit-to-trials 8% Trial-to-transaction Increase size and frequency of transactions Overall results get better via optimization  All marketing programs more effective  Improves usability & reduces barriers Startup-Marketing.com
8. Slide 8: Metrics Driven Iteration: Expand Free Channels Potential External Free Drivers – SEO (self) – Ideal for products/services that disrupt existing categories. – Blogs - blog about passion to solve a problem. Exchange links with other blogs in category. Marketing Potential User-Get-User Channels – Social invites if your product has a social element (optimize each conversion point through A/B testing) – Widgets make it easy for users to embed content (your brand experience) on other sites/platforms Startup-Marketing.com
9. Slide 9: Metrics Driven Iteration: Test Paid Channels • Start developing paid channels with small testing budget  Divide into several small test buys  Optimize or cut money losers  Determine scalability of positive ROI campaigns $10,000 Recommended initial testing budget is $10,000 divided between 10-20 micro tests. Startup-Marketing.com
10. Slide 10: Metrics Driven Iteration: Test Paid Channels Test lowest hanging fruit first Begin by testing user acquisition channels most likely to have easy, positive ROI Paid channel testing sequence (optimize individual funnels) – PR: Great for “innovators” – Demand harvesting channels (great for “disruptors”)  Create unique onramps for each usage and user type  SEM, directories – Demand creation last (challenging and expensive)  Get ideas by monitoring competitors and overall trends  Widgets, webcasts, sponsorships, banners, radio, trade shows Startup-Marketing.com
11. Slide 11: Demand Creation Targeting Sequence • For demand creation, target users that consider product/services “must have” as is • Synchronize targeting sequence with sales and product teams Target Message New feature Begin targeting needed Market Message 1 N/A Start Nov 2008 Segment 1 Market Message 2 Feature 1 Start Feb 2009 Segment 2 Market Message 3 Feature 2 Start May 2009 Segment 3 Startup-Marketing.com
12. Slide 12: Planning/Managing Growth: Growth Budget Your budget strategy depends on your funding, competitive landscape and the macro economic environment World Domination Budget Strategy Budget max spend for allowable acquisition of a new user that returns investment more slowly (but still gives positive ROI). Low Burn Budget Strategy Budget max spend for allowable acquisition cost of a new user that gives fast payback. * Always budget for positive ROI and reserve 20% for testing new drivers Startup-Marketing.com
13. Slide 13: Planning/Managing Growth: Hiring • Hire to increase velocity of tests • Hire to fill bottlenecks that slow testing Early marketing roles to consider: 1. Marketing Web Designer 2. Copywriter 3. Marketing Data Analyst 4. Marketing Database Analyst 5. SEM specialist 6. Product Marketing Director *Don’t try to hire someone to “figure things out” Startup-Marketing.com
14. Slide 14: Planning/Managing Growth: Users/Sales Predictable growth begins when 80% of budget focused on proven ROI campaigns • Proven campaigns offer predictable user acquisition costs with reliable average revenue per user. • Increase growth momentum by continuing to invest 20% into campaign testing. Startup-Marketing.com
15. Slide 15: Summary: Key Takeaways • Discover who needs it and why • Determine your key metrics • Optimize conversions/economics • Micro test customer acquisition channels Sequence is key to maximizing resources and building momentum Sean Ellis Go To Market Advisor for Startups Email: sean (at) startup-marketing.com Startup-Marketing.com