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“Flight systems”




  @MikeMcDerment – Co-Founder and CEO
         Feb 23, 2010 – #fowa
Thank You
Mike McDerment
Co-founder, CEO
True or False:
Technology is the hardest
part of building a web app
         business?
False
Flight Systems
Metrics and systems to help you navigate web
                app success.
… THE LEADER IN ONLINE
BILLING AND BOOKKEEPING.
Customer Types
Solo      Team          Recurring
Now for Web Apps!
  Recurring billing managed inside your app




   Accept credit cards inside your own app
Real-Time pay...
Users   Over 1,000,000 Users Since May 2004




                       Month
Let me apologize in
advance…sorry aboot the
      MBA speak
Key Metrics for Web Apps
• “How much do we spend to get a customer?”
• Cost Per Acquisition ($)                    CPA
• “...
CPA

ARPU

Churn

LTV
Why                  is not enough.

Less accurate
Less flexible (can’t slice and dice)
Can’t correlate to app usage/event...
Three systems to rule them all.

        Cookie Tracking


          DB Storage


           Reporting
Variables
 to track


 Unique
 URL’s


 Cookie
            Cookie Tracking
 Code
What to Track ( barebones ) and why.

   Referring Domain ( who sent them here? )

   Ref URL ( what are their interests? ...
Data Base Storage

  Add a
 table to
   your
Database

  Store
alongside
   user
  profile
Search

    Sort

    Dump

BONUS! Dashboard
How does a marketer get the data
       from a database?
Search it.
Sort it.
Dump it.
Case Study Assumptions

Web Application
Business model is “Freemium”
$10,000 per month marketing budget
6 month campaign
Gross New Customers Acquired by Month
100



 75



 50



 25



  0
      Jan    Feb     Mar     Apr    May       Jun
Gross New by Marketing Spend (Vintages)
100



75



50



25



 0
      Jan      Feb     Mar     Apr     May      Jun
What we learned

100 customers per vintage
CPA of $100 ($10,000/100)
6 month close <- MASSIVE INSIGHT!!!
50% / 25% / 10% /...
Parting Thoughts on Flight Systems

     Too important to outsource
     It’s about data collection, not reporting
     It...
Flight Systems
Metrics and systems to help you navigate web
                app success.
Questions? Bring em!


Twitter: @mikemcderment
Email: mike@freshbooks.com

Check out FreshBooks if you are building a web ...
Choose your own adventure.
6 month campaign

             Spend       Visitors   Trials
 January    $10,000.00   10,000     1,000
February    $10,000...
What your marketer gets…


         Hands on the wheel
             Self service
         Easy access to excel

The data t...
How many customers did we get?




 # new customers        Gross
                        New
These systems help answer

 Who are our most valuable customers?
 Where did we get them?
 How do we get more?
CPA
Marketing
 Spend
                        ARPU
 Visitor
                        Churn
  Lead
                        LT...
Simple Conversion Funnel




         CPA

         ARPU

         Churn

         LTV
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them
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Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them

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Mike has grown FreshBooks from a one-man startup to a 30-person Web app company. He's going to teach you six essential terms that you need to understand in order to succeed with your app: 'Lifetime Value', 'Average Revenue per User', 'Churn', 'Gross Cost per Acquisition', 'Sales Funnel' and 'Customer Vintages'. He's then going to give an example with a real-life case study. This is one you can't afford to miss.

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Mike Mcderment - Marketing Metrics and the Systems You Need to Measure Them

  1. 1. “Flight systems” @MikeMcDerment – Co-Founder and CEO Feb 23, 2010 – #fowa
  2. 2. Thank You
  3. 3. Mike McDerment Co-founder, CEO
  4. 4. True or False: Technology is the hardest part of building a web app business?
  5. 5. False
  6. 6. Flight Systems Metrics and systems to help you navigate web app success.
  7. 7. … THE LEADER IN ONLINE BILLING AND BOOKKEEPING.
  8. 8. Customer Types Solo Team Recurring
  9. 9. Now for Web Apps! Recurring billing managed inside your app Accept credit cards inside your own app Real-Time payment notifications ( WEBHOOKS! ) http://developers.freshbooks.com/
  10. 10. Users Over 1,000,000 Users Since May 2004 Month
  11. 11. Let me apologize in advance…sorry aboot the MBA speak
  12. 12. Key Metrics for Web Apps • “How much do we spend to get a customer?” • Cost Per Acquisition ($) CPA • “How much do our customers pay us?” • Average Revenue Per User ARPU • “At what rate are customers cancelling?” • Churn (%) Churn • “How much is a customer worth over time?” • Lifetime Value Per Customer ($) LTV
  13. 13. CPA ARPU Churn LTV
  14. 14. Why is not enough. Less accurate Less flexible (can’t slice and dice) Can’t correlate to app usage/events Too important to outsource Tied to a vendor Besides…It’s easy!
  15. 15. Three systems to rule them all. Cookie Tracking DB Storage Reporting
  16. 16. Variables to track Unique URL’s Cookie Cookie Tracking Code
  17. 17. What to Track ( barebones ) and why. Referring Domain ( who sent them here? ) Ref URL ( what are their interests? ) Landing URL ( campaign, partner, ad unit? )
  18. 18. Data Base Storage Add a table to your Database Store alongside user profile
  19. 19. Search Sort Dump BONUS! Dashboard
  20. 20. How does a marketer get the data from a database?
  21. 21. Search it.
  22. 22. Sort it.
  23. 23. Dump it.
  24. 24. Case Study Assumptions Web Application Business model is “Freemium” $10,000 per month marketing budget 6 month campaign
  25. 25. Gross New Customers Acquired by Month 100 75 50 25 0 Jan Feb Mar Apr May Jun
  26. 26. Gross New by Marketing Spend (Vintages) 100 75 50 25 0 Jan Feb Mar Apr May Jun
  27. 27. What we learned 100 customers per vintage CPA of $100 ($10,000/100) 6 month close <- MASSIVE INSIGHT!!! 50% / 25% / 10% / 5% / 5% / 5% What else could we know? ARPU, LTV
  28. 28. Parting Thoughts on Flight Systems Too important to outsource It’s about data collection, not reporting It’s easy
  29. 29. Flight Systems Metrics and systems to help you navigate web app success.
  30. 30. Questions? Bring em! Twitter: @mikemcderment Email: mike@freshbooks.com Check out FreshBooks if you are building a web app! http://developers.freshbooks.com
  31. 31. Choose your own adventure.
  32. 32. 6 month campaign Spend Visitors Trials January $10,000.00 10,000 1,000 February $10,000.00 10,000 1,000 March $10,000.00 10,000 1,000 April $10,000.00 10,000 1,000 May $10,000.00 10,000 1,000 June $10,000.00 10,000 1,000
  33. 33. What your marketer gets… Hands on the wheel Self service Easy access to excel The data they need, when they need it!
  34. 34. How many customers did we get? # new customers Gross New
  35. 35. These systems help answer Who are our most valuable customers? Where did we get them? How do we get more?
  36. 36. CPA Marketing Spend ARPU Visitor Churn Lead LTV Paying Customers
  37. 37. Simple Conversion Funnel CPA ARPU Churn LTV

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