Lean Analytics Use data to build a better business faster. www.leananalyticsbook.com @byosko | @acroll @leananalytics
Kevin Costner is a lousy entrepreneur. Don’t sell what you can make. Make what you can sell.
The basic Lean message islearn and adapt, fast.
A metric from the early, foolish days of the Web. Hits Count people instead. Marginally better than hits. Unless you’re displaying Page views ad inventory, count people. Is this one person visiting a hundred times, or are a Visits hundred people visiting once? Fail. This tells you nothing about what they did, why theyUnique visitors stuck around, or if they left. Followers/ Count actions instead. Find out how many followers friends/likes will do your bidding.Time on site, or Poor version of engagement. Lots of time spent on pages/visit support pages is actually a bad sign. How many recipients will act on what’s in them?Emails collected Number of Outside app stores, downloads alone don’t lead to downloads lifetime value. Measure activations/active accounts.
http://www.ﬂickr.com/photos/circasassy/7858155676/ it’s a how you behave, If it won’t changebadmetric.
What mode of e-commerce are you? How many of your customers Then you are in Your customers You are just Focus on buy a second this mode will buy from you liketime in 90 days? Low CAC, 1-15% Acquisition Once 70% high of retailers checkout 15-30% Hybrid 2-2.5 20% Increasing per year of retailers returns Loyalty, >30% Loyalty >2.5 10% inventory per year of retailers expansion (Thanks to Kevin Hilstrom for this.)
Eric Ries’Three engines Stickiness Virality PriceApproach Keep people Make people Spend revenue coming back. invite friends. getting customers.Math that Get customers How many they Customers are matters faster than you tell, how fast worth more than lose them. they tell them. they cost to get.
Dave McClure’s Pirate metrics How do your users become aware of you? Acquisition AARRR SEO, SEM, widgets, email, PR, campaigns, blogs ... Do drive-by visitors subscribe, use, etc? Activation Features, design, tone, compensation, afﬁrmation ... Does a one-time user become engaged? Retention Notiﬁcations, alerts, reminders, emails, updates... Do you make money from user activity? Revenue Transactions, clicks, subscriptions, DLC, analytics... Do users promote your product? Referral Email, widgets, campaigns, likes, RTs, afﬁliates...
The ﬁve Stages of Lean Analytics The business you’re in E- 2-sided Mobile User-gen SaaS Media commerce market app content EmpathyThe stage you’re at One Metric Stickiness Virality Revenue That Matters. Scale
What’s your OMTM? E- 2-sided Mobile User-gen SaaS Media commerce market app content Empathy Interviews; qualitative results; quantitative scoring; surveys Loyalty, Inventory, Engagement, Downloads, Content, Trafﬁc, visits,Stickiness conversion listings churn churn, virality spam returns CAC, shares, Inherent WoM, app Invites, Content Virality reactivation SEM, sharing virality, CAC ratings, CAC sharing virality, SEM (Money from transactions) (Money from active users) (Money from ad clicks) Transaction, Transactions, Upselling, CLV, Ads, CPE, afﬁliate Revenue CLV commission CAC, CLV ARPDAU donations %, eyeballs Afﬁliates, Other API, magic Spinoffs, Analytics, Syndication, Scale white-label verticals #, mktplace publishers user data licenses
Cost of customer acquisition• CAC should be no more than 1/3 of CLV • CLV is wrong: The customer lifetime value you’ve calculated is probably wrong. • Time kills all plans: It’ll take a long time to ﬁnd out whether you’ve underestimated churn or overestimated customer spend. • CAC is wrong: The acquisition cost is probably wrong, too. • Cashﬂow: Between the time that you spend money to acquire someone and the time you recoup that investment, you’re basically “loaning” the customer money. • It keeps you honest: Limiting yourself to a Customer Acquisition Cost (CAC) of only a third of your CLV will force you to verify your acquisition costs sooner.
User-generated content:Time on site per day 17 Reddit: 17 Techstars co’s: 17 Pinterest: 14 Tumblr: 21 Facebook: 60 minutes/day.(No, really, it’s weird how often this comes up.)
SaaS:Paid enrollment No credit card No credit card, focus Credit cart upfront upfront on serious users 100 try it (2%) 500 try it (10%) 500 try it (10%) 50 become subscribers 75 become subscribers 125 become (50%) (15%) subscribers (25%) 20 churn fast (40%) 15 churn fast (20%) 25 churn fast (20%) 30 customers remain 60 customers remain 100 customers remain (0.6%) (1.2%) (2%)• If you focus on serious users through proﬁling, and manage engagement during trial/freemium, you can beat that with no card. Totango analyzed data across their SaaS client base