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# Eric Ries Engagement Loops The Levers And Metrics Of Engagement

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Talk to be presented at Facebook Developer Garage SF …

Talk to be presented at Facebook Developer Garage SF
Wednesday, March 25, 2009

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• 1. Engagement Loops The Levers and Metrics of Engagement Eric Ries Blog: startup lessons learned http://www.facebook.com/event.php?eid=23439274966
• 2. PHAME &#x2022; Problem &#x2013; customers don&#x2019;t always stick &#x2022; Hypothesis &#x2013; we can do something about it &#x2022; Action &#x2013; by pulling the three levers of engagement &#x2022; Metrics &#x2013; and measuring the engagement factor &#x2022; Experiments &#x2013;find the points of highest leverage; iterate, iterate, iterate
• 3. Levers of engagement &#x2022; Synthetic notifications &#x2022; Organic notifications &#x2022; Positioning (the battle for your mind)
• 4. Positioning &gt; Organic &gt; Synthetic &#x2022; Warhammer Online vs. World of Warcraft
• 5. Engagement Loop &#x2022; A customer decides to return to your product &#x2022; They decide to take some action &#x2022; This action may have side effects, such as sending out notifications &#x2022; These side effects affect other customers, and some side effects are more effective than others. &#x2022; Some affected customers decide to return to your product...
• 6. Engagement Loop example &#x2022; synthetic message: quot;upload some photos!quot; Some percentage of customers click through. (C) &#x2022; Some percentage of those actually upload. (D) &#x2022; Those customers get prompted to tag their friends in their photos. Some percentage of them do (A), and these result in a certain number of emails sent (B). &#x2022; Each friend that's tagged gets an email. Some percentage of them click through. (C) &#x2022; Of those, some percentage are themselves convinced to upload and photos. (D)
• 7. Engagement Loop actionable metrics Messages Message Conversion to Sent Per Conversion Action Engagement synthetic message Receive Send Action Message Message organic messages
• 8. Engagement Factor &#x2022; Engagement Factor (per event) &#xF0E0; msgs sent/action * message conversion * conversion to action * messages sent * message conversion &#x2022; Engagement Factor (per user) &#xF0E0; engagement factor (event) * events/user
• 9. Integrating with the Viral Loop Engagement Engag Invite loop ement Viral Viral/Engagement Loop
• 10. SuperPoke Engagement Loop Invite Page Send invite Send Message New users notification/invite Viral loop Viral loop 2 Engagement Message Loop Receive Message
• 11. SuperPoke Engagement Loop Invite Page Send invite Send Message New users notification/invite Conversion to Action Viral loop Viral loop 2 Engagement Messages Message Loop Sent Per Engagement Message Conversion Receive Message
• 12. Friends for Sale Engagement Loop Invite Page Action &#x2022; Buy Send Message &#x2022; Do New users &#x2022; Favor notification &#x2022; Gift /invite Engagement Viral loop 1 Viral loop 2 Loop Receive Message
• 13. Friends for Sale Engagement Loop Messages Sent Per Invite Page Action Engagement &#x2022; Buy Send Message &#x2022; Do New users &#x2022; Favor notification &#x2022; Gift /invite Engagement Message Viral loop 1 Viral loop 2 Conversion Loop Conversion to Action Receive Message
• 14. Split-testing all the time &#x2022; A/B testing is key to validating your hypotheses &#x2022; Has to be simple enough for everyone in the company to use and understand it &#x2022; Make creating a split-test no more than one line of code: if( setup_experiment(...) == quot;controlquot; ) { // do it the old way } else { // do it the new way }
• 15. The AAA&#x2019;s of Metrics &#x2022; Actionable &#x2022; Accessible &#x2022; Auditable
• 16. Measure the Macro &#x2022; Always look at cohort-based metrics over time &#x2022; Split-test the small, measure the large Control Group (A) Experiment (B) # Registered 1025 1099 Downloads 755 (73%) 733 (67%) Active days 0-1 600 (58%) 650 (59%) Activedays 1-3 500 (48%) 545 (49%) Active days 3-10 300 (29%) 330 (30%) Activedays 10-30 250 (24%) 290 (26%) Total Revenue \$3210.50 \$3450.10 RPU \$3.13 \$3.14
• 17. Thanks! &#x2022; Blog: http://startuplessonslearned.blogspot.com/ &#x2022; Web 2.0 Expo: April 1st, 2009 &#x201C;The Lean Startup: a Disciplined Approach to Imagining, Designing, and Building New Products.&#x201D;