I NEVER FELT LIKE I WAS LEARNINGANYTHING IMPORTANT
“An actionable metric is one that ties specific andrepeatable actions to observed results.” ASH MAURYA http://www.ashmaurya.com/
EVENT BASED TRACKING
F UNNELS
SIMPLE SIGN-UP FUNNEL
EXTENDED SIGN-UP FUNNEL
A/B TESTING
+152%
A/B TESTING USER MAP ON HOMEPAGE
GOOGLE BING
“THAT BLUE WAS WORTH $80M AT LEAST” PAUL RAY - PRODUCT MANAGER BING
AN INTUITIVE LEAPLOCALMAXIMA PROPS @BOKARDO FOR LAST FEW SLIDES
@37SIGNALS
WHAT TO A/B TESTShort Answer: EverythingLonger Answer: That you haveenough traffic to see significantresults that are not trivaloptimisations (HINT you are notBing/Google)
WHAT TO A/B TESTEvery new feature should gointo A/B testing.If has negative or no real effect,pull it.Optimise existing features/copy/design (80% existing 20% new)
F RAMEWORK
ACTIVATION REFERRAL RETENTION REVENUEACQUISITION Dave McClure http://500hats.typepad.com/
DON’T TRY TO MEASURE TOO MUCH
E XAMPLES
SAY HELLO TO OUR 3 FICTIONAL STARTUPS
G GIE CO LRDO Social Network for Dog Lovers. Makes money through advertising and affiliate sales of lush dog collars.
G GIE CO LRDO Key business drivers are: Advertising and affiliates need large traffic/page views so growth and retention are key
ONE KEY METRICThere is generally only one keymetric you need to concentrateon at a time. Such as referral orsign-up conversion orcancellation rate.
A CQUISITION
TRACKING MARKETINGCHANNELSGoogle AdwordsBannersSocial MediaPartnershipsPRBloggingAnything that links to your site!
TRACKING MARKETINGCHANNELSUse unique urls (trackingparameters) on every url youcreate/give-out/pay forUse bit.lyUse HTTP referrers to group PR
MEASURING COST OF VISITSCost per click (site visit)Cost of campaign / trafficgenerated(Social media) Cost of effort /traffic generated
MEASURING COST OFACQUISITIONCost of one visit / conversionrate = Cost of an acquisitionAcquisition could be paid foracquisition or free sign-upUnfortunately not that simple
DIFFERENT CHANNELS CAN HAVEDIFFERENT CONVERSION RATES
MARKETING CHANNELSPer channel track:ScaleCostConversionOptimise and scale channelswith best Cost of Acquisition(CoA) and potential to Scale
ACQUISITIONCost of Acquisition < CustomerLifetime ProfitThen scale acquisition at asimilar or lower rateA/B test acquisition channels tooptimise
ACQUISITION INCLUDING REFERRAL If it costs £3 to acquire a customer through advertising But that customer brought in 2 other customers through referral The COA of that channel is £1
A CTIVATION
SURE THEY SIGNED-UP BUT DID THEY LIKE IT?
ACTIVATION AT FACEBOOK(i) which data points predictwhether a user will stay?(ii) if they stay, which data pointspredict how active they’ll beafter three months?
ACTIVATION AT FACEBOOK(i) having more than one session asa new user, and entering basicprofile information.(ii) how often a user was reachedout to by others, frequency of thirdparty application use, and howforthcoming a user was on the site.
ACTIVATION METRICS OFTEN DRIVE OTHER METRICS IN REFERRAL, RETENTION, REVENUE
R ETENTION
RETURNING USERSTracking unregistered users thatreturn often (useful for contentsites with advertising)Tracking registered users thatreturn and take some sort ofaction.
COHORT METRICS - CREATEDPROJECT
COHORT METRICS - CAME BACK
R EFERRAL
REFFERAL MECHANISMSSocial Media SharingInvite a friend type mechanicsApp ReviewsWord of mouth
VIRAL COEFFICIENTThe average number ofcustomers each customer refers
VIRAL COEFFICIENT - EXAMPLEEach Doggiecollr customerinvites 5 other customers byemail20 % click on that email link50 % of those users convert intocustomers
VIRAL COEFFICIENT - EXAMPLE Viral coefficient =Refferals x click through x conversion 5 x 0.2 x 0.5 = 0.5
VIRAL COEFFICIENTA viral co-effiecient greater than1 means that every customergets more than one othercustomer on averageTherefore your product willgrow virally
VIRAL COEFFICIENTMeasure automatically for allyour in built referralmechanisms.Give customers unique inviteURLs and track conversions
VIRAL CYCLE TIMEThe average time taken for areferral to turn into a customerWith the viral coeffiecent andviral cycle time you candetermine your viral growth
NET PROMOTER SCORE Number of people who would recommend your product to a friend. A single question survey
NET PROMOTER SCORE How likely is it you would recommend AgileSamba to a friend or colleague?0 1 2 3 4 5 6 7 8 9 10 NPS = % Promoters - % Detractors
NET PROMOTER SCORE Survey a small percentage of your customers by email weekly Record who you sent to so you don’t repeat the same people every week
NET PROMOTER SCORE NPS is not a direct measurement that translates to key metrics Can act as a leading indicator of other metrics
R EVENUE
MAKING MONEY Key for any business is to find out how much profit they make for every customer and scaling the number of customers
LIFETIME CUSTOMER VALUE How much money you make for every customer you acquire For some this is a single transaction For subscription businesses it depends on retention
CANCELLATION RATE Is the percentage number of customers who cancel in any given month compared to total (paying) customers [Cancellation rate] = [product utility] + [service quality] + [acceptable price]
LIFETIME CUSTOMER VALUE (LTV) LTV = monthly revenue x no months in lifetime No months = 1 / cancellation rate LTV = monthly revenue / cancellation rate
LIFETIME CUSTOMER VALUE (LTV) For example: If £20 a month and cancelation rate is 10% a month LTV = £200
LIFETIME CUSTOMER VALUE (LTV) Often not that simple. Short term cancellation rates are much higher than long term Use Cohort Analysis to determine
LIFETIME CUSTOMER VALUE (LTV) r = short-term cancellation rate (e.g. 0.15) p = long-term cancellation rate (e.g. 0.03) s = number of months in the “short-term” age group (e.g. 3) (1-r)^s × (s + 1/p) = expected months
T IPS
TIPSConcentrate on macro metricsEverything you do should be anattempt to change a metricMeasure if it didTry to use as few tools aspossible
TIPSAutomate it and put it in adashboardIf it can’t be automated make asimple spreadsheet and an easyway to update it
TIPSDon’t forget to measuremarketingMake metrics a habit
Adnan Aziz