FirstMark Presentation (10-13) (slideshare)

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Will you marry me? Why engagement is the key to maximizing LTV (Lifetime Value). Presented at the FirstMark marketing summit on October 23, 2013.

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FirstMark Presentation (10-13) (slideshare)

  1. 1. Will you marry me? Why engagement is the key to maximizing LTV (Lifetime Value) Presented by: Brent Chudoba, SurveyMonkey FirstMark Online Marketing Summit October 23, 2013
  2. 2. Hi, I’m Brent •  VP, GM of SurveyMonkey Audience •  @SurveyMonkey since Apr. ’09 •  Schoology BoD member @bchudoba brentchudoba.com in/brentchudoba 2
  3. 3. •  If there was one metric I could increase, at every company where I am an equity holder, it would be engagement •  Engaged users: -  Convert at higher rates -  Stick around longer •  Because they are getting value •  Because they develop higher switching costs -  Tell you about their needs -  Tell others about your product 3
  4. 4. Conversion & engagement optimization •  Pure conversion optimization strategies and tactics are incredibly useful, and well defined -  Quick to test and simpler to measure -  There is often a ceiling on tactical conversion gains •  You don’t typically use conversion to drive engagement •  But you always use engagement to: -  Increase conversion -  Increase ARPU (average revenue per user) -  Increase retention •  And I want to show you why introducing engagement metrics can drive outsized gains 4
  5. 5. Presentation goal •  Provide you with some useful examples and ways to measure and factor engagement into your product, marketing and business intelligence roadmap 5
  6. 6. Engagement philosophy •  If customers get value from your product they will pay you, stick around and grow -  If they don’t, they’ll eventually leave •  Engagement is a tool to get users across a set of customer success milestones that translate to value -  If a SurveyMonkey customer sends out surveys every year and gets enough responses to help them make better decisions, they are getting value. How do I help get them to that point? 6
  7. 7. Conversion optimization example 7
  8. 8. 2008 8
  9. 9. 2013 Tactical Improvements •  “Most Popular” badge •  Above the fold, simple feature call outs •  Highlight key package differences •  Feature differentiation by package •  Tiered package naming •  Simple CTAs •  Comparable monthly pricing shown 9
  10. 10. Why does engagement matter? 10
  11. 11. An engaged user is more likely to convert to a paid user, increase their spend over time, and less likely to cancel their usage of your product than an inactive, unengaged user. •  Do you agree or disagree w/ the statement above? 11
  12. 12. So, engagement matters 12
  13. 13. But, how can we quantify how much engagement matters? And, how can we impact it? 13
  14. 14. Quantifying engagement benefits 14
  15. 15. •  An example shows highly engaged users convert at 4x the rate of less engaged users -  Essentially all highly engaged users convert •  Heat map of conversion rates by engagement level: #  of  Responses  Collected More Less Less More #  of  Surveys  Deployed 15
  16. 16. •  Introducing more features and use cases for products creates additional value •  For SurveyMonkey customers who sign up for a paid account, every additional paid feature they use results in a drop in their churn rate 1 Month Churn Rate High Zero Zero Number of Paid Features Used in First Month 16 Many
  17. 17. How do you drive engagement? 17
  18. 18. Driving engagement •  How do you integrate engagement campaigns into your metrics and roadmap? -  Identify: figure out what defines an “engaged” user -  Optimize: increase the % of users that “engage” -  Activate: cherry pick top prospects and help them succeed 18
  19. 19. Identify 19
  20. 20. What are your engagement milestones? •  Start at the end -  When has a customer gotten value from your product? •  Now figure out how they got there -  What are the critical actions that customers go through to reach a full engagement milestone? 20
  21. 21. Finding your end point •  When does your customer… -  Login, smile and say, “Wow, this is awesome. This just saved me a ton of time. This product was worth every penny, and I might even +1 or Like this company and tell a few colleagues how great this is. Yes SMB SaaS product, yes I will marry you!” 21
  22. 22. Engagement variants •  Singular Objective Success Point -  1 main use case, or 1 main user type -  “Success” looks similar for nearly all users -  Ex: Nearly all SurveyMonkey users are trying to create a survey and get responses •  Variable Objective Success Points -  Multiple user types, varied “success” definitions -  Ex: Schoology (students, teachers, administrators, parents) all have different “success” definitions 22
  23. 23. Example: SurveyMonkey engagement funnel •  What does it take for a user to engage? •  We identified that sending out a survey and getting responses was when a user derived value from our product -  We decided that more than just a few test responses was important •  And then we worked through the experience to figure out how they got there 23
  24. 24. •  Sign up for an account 24
  25. 25. •  Create a survey 25
  26. 26. •  Add a question 26
  27. 27. •  Begin collecting responses 27
  28. 28. •  Gather responses Whoa! Awesome. I had no idea over 80% of my team had smart phones 28
  29. 29. Optimize 29
  30. 30. Establish baselines, measure results Reach Engagement Stage 1 % of New Users •  A metrics driven product agenda starts w/ a baseline understanding of the status quo •  Then tests w/ various experiments to see where it can drive measurable impact •  Lather, rinse, repeat Something worked here Reach Engagement Stage 2 Reach Engagement Stage 3 Reach Engagement Stage 4 Conversion Rate Time 30 Conversion Rate Time
  31. 31. What works? •  Long term engagement wins are rarely easy •  Engagement needs to be a success metric that is factored in to product and marketing goals •  Features designed with engagement in mind can increase engagement 31
  32. 32. Engaging onboarding experiences •  Are designed to get users through the engagement process •  Checklists, gaming elements like profile strength are useful for both users and your business intelligence 32
  33. 33. Engagement shortcuts don’t exist •  There aren’t nearly as many tactics to better engage users as there are to convert them •  You need to earn your engagement, shortcuts lead to red herrings that don’t materialize in conversion 33
  34. 34. Activate 34
  35. 35. Are all users created equal? •  We all know, the answer is no •  There are big fish swimming in your pond, and with the right engagement strategy, they will be massive customers 35
  36. 36. Do you optimize for big fish? Or all fish? •  Your best customers might be worth 10x your average customer •  Are you activating your 10x’rs to make sure they stick around? 36
  37. 37. How much are your best customers worth? •  Certain models necessitate cherry picking top customers to ensure engagement •  If 10% of your customers have the potential to drive 10x+ annual revenue value, you can replicate (or exceed) subscription economics 37
  38. 38. •  SurveyMonkey Audience customers transact differently than monthly subscription customers •  They buy projects, so some of them don’t come back •  But those who do, are incredibly valuable Cumulative Revenue Avg. Year 1 Revenue from Repeat Customers Avg. Year 1 Revenue from ALL Customers 1 2 3 4 5 6 7 8 Month * Actual numbers are confidential, this chart is intended to show the relative impact * Repeat customers includes any customer that purchased in month 1 and any successive month •  ` 38 9 10 11 12
  39. 39. How do you activate your best customers? •  The million, or maybe billion $ question •  Engagement for 10xrs has even bigger implications -  Special programs to ensure they move through the engagement funnel are critical -  Resourcing to ensure customers w/ $20k+ potential are successful will often pay huge dividends -  And the knowledge of what success means is critical 39
  40. 40. Thank you! 40
  41. 41. Acknowledgements •  The SurveyMonkey Business Intelligence team provided all the important data for this report •  They provide all the data and insights that help SurveyMonkey make great decisions, and they are abnormally cool people, which means we get to have quite a bit of fun while we are at it •  Thank you BI, you rock 41

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