Eric Ries Engagement Loops The Levers And Metrics Of Engagement

Engagement Loops The Levers and Metrics of Engagement Eric Ries Blog: startup lessons learned http://www.facebook.com/event.php?eid=23439274966

PHAME • Problem – customers don’t always stick • Hypothesis – we can do something about it • Action – by pulling the three levers of engagement • Metrics – and measuring the engagement factor • Experiments –find the points of highest leverage; iterate, iterate, iterate

Levers of engagement • Synthetic notifications • Organic notifications • Positioning (the battle for your mind)

Positioning > Organic > Synthetic • Warhammer Online vs. World of Warcraft

Engagement Loop • A customer decides to return to your product • They decide to take some action • This action may have side effects, such as sending out notifications • These side effects affect other customers, and some side effects are more effective than others. • Some affected customers decide to return to your product...

Engagement Loop example • synthetic message: quot;upload some photos!quot; Some percentage of customers click through. (C) • Some percentage of those actually upload. (D) • 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). • Each friend that's tagged gets an email. Some percentage of them click through. (C) • Of those, some percentage are themselves convinced to upload and photos. (D)

Engagement Loop actionable metrics Messages Message Conversion to Sent Per Conversion Action Engagement synthetic message Receive Send Action Message Message organic messages

Engagement Factor • Engagement Factor (per event)  msgs sent/action * message conversion * conversion to action * messages sent * message conversion • Engagement Factor (per user)  engagement factor (event) * events/user

Integrating with the Viral Loop Engagement Engag Invite loop ement Viral Viral/Engagement Loop

SuperPoke Engagement Loop Invite Page Send invite Send Message New users notification/invite Viral loop Viral loop 2 Engagement Message Loop Receive Message

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

Friends for Sale Engagement Loop Invite Page Action • Buy Send Message • Do New users • Favor notification • Gift /invite Engagement Viral loop 1 Viral loop 2 Loop Receive Message

Friends for Sale Engagement Loop Messages Sent Per Invite Page Action Engagement • Buy Send Message • Do New users • Favor notification • Gift /invite Engagement Message Viral loop 1 Viral loop 2 Conversion Loop Conversion to Action Receive Message

Split-testing all the time • A/B testing is key to validating your hypotheses • Has to be simple enough for everyone in the company to use and understand it • 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 }

The AAA’s of Metrics • Actionable • Accessible • Auditable

Measure the Macro • Always look at cohort-based metrics over time • 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

Thanks! • Blog: http://startuplessonslearned.blogspot.com/ • Web 2.0 Expo: April 1st, 2009 “The Lean Startup: a Disciplined Approach to Imagining, Designing, and Building New Products.”

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