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How to be a Web 2.0 Metrics Jedi (Web 2.0 Expo, April 2009)


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How to use metrics to optimize your product, marketing, and business by Dave McClure, Dan Olsen, and Ted Rheingold at O'Reilly San Francisco Web 2.0 Expo, April 2009.

Published in: Business, Technology

How to be a Web 2.0 Metrics Jedi (Web 2.0 Expo, April 2009)

  1. Become a Web 2.0 Jedi: How to Use the Force of Product & Marketing Metrics to Optimize Your Business Web 2.0 Expo Apr 3, 2009 #w2e #metrics
  2. Startup Metrics for Pirates: AARRR! Web 2.0 Expo SF April 2009 Dave McClure, Founders Fund
  3. Startup Metrics: The Basics <ul><li>Measure Stuff. Keep It Simple. </li></ul><ul><li>5 Steps: Startup Metrics for Pirates ( AARRR !) </li></ul><ul><li>3 Metrics Frameworks + 3 Roles (CEO, Dev/Product, Marketing) </li></ul><ul><li>Iterate & Optimize. Feedback Loop. (Loop. Loop.) </li></ul><ul><li>One Step at a Time. The “Ass vs. Face” Issue. </li></ul><ul><li>Appendix (we won’t have time) </li></ul><ul><li>Activation </li></ul><ul><li>Retention </li></ul><ul><li>Acquisition </li></ul><ul><li>Referral </li></ul><ul><li>Revenue </li></ul>
  4. Web 2.0: Hell Yes , Good Times. <ul><li># Users, Bandwidth = Bigger. </li></ul><ul><li>Lower Startup Costs = Badder. </li></ul><ul><li>PPC, E-Com $ Growing = Uncut. </li></ul><ul><li>Collect Usage Metrics in Real-Time </li></ul><ul><li>Decisions Based on Measured User Behavior </li></ul>
  5. The Startup Metrics Religion <ul><li>Progress ≠ Features ( Less = More ) </li></ul><ul><li>Focus on User Experience </li></ul><ul><li>Measure Conversion ; Compare 2+ Options </li></ul><ul><li>Fast, Frequent Iteration (+ Feedback Loop ) </li></ul><ul><li>Keep it Simple & Actionable </li></ul>
  6. Optimize 4 Happiness (both User + Business) <ul><li>Define States of User + Business Value </li></ul><ul><li>Prioritize (Estimate) Relative Value of Each State </li></ul><ul><li>Move Users: Lower Value -> Higher Value </li></ul><ul><li>Optimize for User Happiness / Business $$$ </li></ul><ul><li>Achieve Low Cost + High Value @ Scale </li></ul>$$$
  7. Discover Meaning Keywords, Images, Call-to-Action <ul><li>Top 10 - 100 words </li></ul><ul><ul><li>Your Brand / Products </li></ul></ul><ul><ul><li>Customer Needs / Benefits </li></ul></ul><ul><ul><li>Competitor’s Brand / Products </li></ul></ul><ul><ul><li>Semantic Equivalents </li></ul></ul><ul><ul><li>Misspellings </li></ul></ul><ul><li>Relevant images </li></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Products </li></ul></ul><ul><ul><li>Problems </li></ul></ul><ul><ul><li>Solutions </li></ul></ul><ul><li>Call-to-Action </li></ul><ul><ul><li>Words </li></ul></ul><ul><ul><li>Images </li></ul></ul><ul><ul><li>Context </li></ul></ul><ul><ul><li>Button/Link </li></ul></ul><ul><ul><li>Emotion </li></ul></ul><ul><li>Result </li></ul><ul><ul><li>Positive? </li></ul></ul><ul><ul><li>Negative? </li></ul></ul><ul><ul><li>Neutral (= Death) </li></ul></ul><ul><ul><li>A/B test & Iterate </li></ul></ul>
  8. Startup Metrics for Pirates: AARRR! <ul><li>A cquisition: users come to site from various channels </li></ul><ul><li>A ctivation: users enjoy 1 st visit: &quot; happy ” experience </li></ul><ul><li>R etention: users come back , visit site multiple times </li></ul><ul><li>R eferral: users like product enough to refer others </li></ul><ul><li>R evenue: users conduct some monetization behavior </li></ul>(note: If you’re in a hurry, watch 5 min video after slide 23) AARRR !
  9. AARRR!: 5-Step Startup Metrics Model R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
  10. Q: What’s My Business Model? <ul><li>Can be one of the following: </li></ul><ul><ul><li>Get Users (= Acquisition, Referral) </li></ul></ul><ul><ul><li>Drive Usage (= Activation, Retention) </li></ul></ul><ul><ul><li>Make Money (= Revenue*) </li></ul></ul><ul><ul><ul><li>* ideally profitable revenue </li></ul></ul></ul><ul><li>Note: eventually need to turn Users / Usage -> Money </li></ul>
  11. Just Gimme the GOOD Metrics. Users, Pages, Clicks, Emails, $$$...? <ul><li>Q: Which of these is best? How do you know? </li></ul><ul><ul><li>1,000,000 one-time, unregistered unique visitors </li></ul></ul><ul><ul><li>500,000 visitors who view 2+ pages / stay 10+ sec </li></ul></ul><ul><ul><li>200,000 visitors who clicked on a link or button </li></ul></ul><ul><ul><li>20,000 registered users w/ email address </li></ul></ul><ul><ul><li>2,000 passionate fans who refer 5+ users / mo. </li></ul></ul><ul><ul><li>1,000 monthly subscribers @ $5/mo </li></ul></ul>the good stuff.
  12. 3 Core Models: biz model, conversion dashboard, mktg channels <ul><ul><li>Define 1-Page Biz Model : customer segments + desired actions / behaviors </li></ul></ul><ul><ul><li>Identify critical Conversion Events & Dashboard for each segment & prioritize </li></ul></ul><ul><ul><li>Test & develop Marketing Channels ; measure Volume (#), Cost ($), Conv (%) </li></ul></ul><ul><ul><li>Optimize product & marketing using Fast Iteration Cycles & A/B Testing </li></ul></ul>
  13. Role: Founder/CEO <ul><li>Q: Which Metrics? Why? </li></ul><ul><li>A: Focus on Critical Few Actionable Metrics </li></ul><ul><ul><li>(if you don’t use the metric to make a decision, it’s not actionable) </li></ul></ul><ul><li>Hypothesize Customer Lifecycle </li></ul><ul><li>Target ~3-5 Conversion Events (tip: Less = More) </li></ul><ul><li>Test, Measure, Iterate to Improve </li></ul>
  14. The 1-Page Business Model (Users + Conversions + Priorities) <ul><li>Q1: What types of people use your website? </li></ul><ul><ul><li>Visitor = Average User / Buyer </li></ul></ul><ul><ul><li>Contributor = Content Contributor / Seller </li></ul></ul><ul><ul><li>Distributor = Passionate Fan (unpaid) / Affiliate (paid) </li></ul></ul><ul><li>Q2: What actions could they take to help you or them ? </li></ul>
  15. TeachStreet Metrics v1: Eye Chart Madness
  16. TeachStreet 1-Page Business Model: Teachers & Students Teachers Students Activation <ul><li>Claim Profile </li></ul><ul><li>Add Class </li></ul><ul><li>Contact Teacher </li></ul><ul><li>View 3 Pages </li></ul>Retention <ul><li>Visit 1x/mo for 3 mo’s </li></ul><ul><li>Visit 1x/mo for 3 mo’s </li></ul>Referral <ul><li>Request Review </li></ul><ul><li>Suggest Teacher </li></ul>
  17. TeachStreet: 45-day Claim Rates ( Seattle , Portland )
  18. Role: Product / Engineering <ul><li>Q: What Features to Build? Why? When are you “Done”? </li></ul><ul><li>A: Easy-to-Find , Fun / Useful , Unique Features that </li></ul><ul><li> Increase Conversion (stop iterating when increase decelerates) </li></ul><ul><li>Wireframes = Conversion Steps </li></ul><ul><li>Measure, A/B Test, Iterate FAST (daily/weekly) </li></ul><ul><li>Optimize for Conversion Improvement </li></ul><ul><ul><li>80% on existing feature optimization </li></ul></ul><ul><ul><li>20% on new feature development </li></ul></ul>
  19. Example Conversion Dashboard (note: *not* actuals… your mileage may vary) Stage Conversion Status Conv. % Est. Value (*not* cost) Acquisition Visitors -> Site/Widget/Landing Page (2+ pages, 10+ sec, 1+ clicks = don’t abandon) 60% $.05 Activation “ Happy” 1 st Visit; Usage/Signup (clicks/time/pages, email/profile reg, feature usage) 15% $.25 Retention Users Come Back; Multiple Visits (1-3x visits/mo; email/feed open rate / CTR) 5% $1 Referral Users Refer Others (cust sat >=8; viral K factor > 1; ) 1% $5 Revenue Users Pay / Generate $$$ (first txn, break-even, target profitability) 2% $50
  20. Role: Marketing / Sales <ul><li>Q: What channels? Which users? Why? </li></ul><ul><li>A: High Volume (#), Low Cost ($), High Conv (%) </li></ul><ul><li>Design & Test Multiple Marketing Channels + Campaigns </li></ul><ul><li>Select & Focus on Best-Performing Channels & Themes </li></ul><ul><li>Optimize for conversion to target CTAs, not just site/landing page </li></ul><ul><li>Match/Drive channel cost to/below revenue potential </li></ul><ul><li>Low-Hanging Fruit: </li></ul><ul><ul><li>Blogs </li></ul></ul><ul><ul><li>SEO/SEM </li></ul></ul><ul><ul><li>Landing Pages </li></ul></ul><ul><ul><li>Automated Emails </li></ul></ul>
  21. Example Marketing Channels <ul><li>PR </li></ul><ul><li>Contest </li></ul><ul><li>Biz Dev </li></ul><ul><li>Direct Marketing </li></ul><ul><li>Radio / TV / Print </li></ul><ul><li>Dedicated Sales </li></ul><ul><li>Telemarketing </li></ul><ul><li>Email </li></ul><ul><li>SEO / SEM </li></ul><ul><li>Blogs / Bloggers </li></ul><ul><li>Viral / Referral </li></ul><ul><li>Affiliate / CPA </li></ul><ul><li>Widgets / Apps </li></ul><ul><li>LOLCats ;) </li></ul>
  22. M AARRR keting Plan <ul><li>Marketing Plan = Target Customer Acquisition Channels </li></ul><ul><ul><li>3 Important Factors = Volume (#), Cost ($), Conversion (%) </li></ul></ul><ul><ul><li>Measure conversion to target customer actions </li></ul></ul><ul><ul><li>Test audience segments, campaign themes, Call-To-Action ( CTA s) </li></ul></ul><ul><li>[Gradually] Match Channel Costs => Revenue Potential </li></ul><ul><ul><li>Increase Vol. & Conversion, Decrease Cost, Optimize for Revenue Potential </li></ul></ul><ul><ul><li>Avg Txn Value ( ATV ), Ann Rev Per User ( ARPU ), Cust Lifetime Value ( CLV ) </li></ul></ul><ul><ul><li>Design channels that (eventually) cost <20-50% of target ATV, ARPU, CLV </li></ul></ul><ul><li>Consider Costs, Scarce Resource Tradeoffs </li></ul><ul><ul><li>Actual $ expenses </li></ul></ul><ul><ul><li>Marketing time & resources </li></ul></ul><ul><ul><li>Product/Engineering time & resources </li></ul></ul><ul><ul><li>Cashflow timing of expense vs. revenue, profit </li></ul></ul>
  23. One Step at a Time. <ul><ul><li>Make a Good Product : Activation & Retention </li></ul></ul><ul><ul><li>Market the Product : Acquisition & Referral </li></ul></ul><ul><ul><li>Make Money : Revenue & Profitability </li></ul></ul>“ You probably can’t save your Ass and your Face at the same time… choose carefully .” – DMC
  24. Summary <ul><li>Measure Stuff. Keep It Simple. </li></ul><ul><li>5 Steps: Startup Metrics for Pirates ( AARRR !) </li></ul><ul><li>3 Items: Biz Model, Conversion, Mktg Channels </li></ul><ul><li>Iterate & Optimize. Feedback Loop. (Loop. Loop). </li></ul><ul><li>One Step at a Time. </li></ul>
  25. Links & Resources <ul><li>Additional References: </li></ul><ul><li>“ Influence: The Psychology of Persuasion ”, Robert Cialdini (book) </li></ul><ul><li>“ Putting the Fun in Functional ”, Amy Jo Kim (etech 2006 preso) </li></ul><ul><li>“ Futuristic Play ”, Andrew Chen (blog) </li></ul><ul><li>“ Don’t Make Me Think ”, Steve Krug (book) </li></ul><ul><li>“ Designing for the Social Web ”, Joshua Porter (book, website) </li></ul><ul><li>“ Startup Lessons Learned ”, Eric Ries (blog) </li></ul><ul><li>“ Customer Development Methodology ” Steve Blank (presentation, blog ) </li></ul><ul><li>“ Startup- ”, Sean Ellis (blog) </li></ul>
  26. Dan Olsen CEO, YourVersion Web 2.0 Expo Apr 3, 2009 How to Use the Force of Metrics to Optimize your Web 2.0 Product
  27. The Force of Metrics is Real The Force of Metrics? Really?
  28. Approaching Your Product and Business as an Optimization Exercise <ul><li>Given reality as it exists today, </li></ul><ul><li>optimize our results </li></ul><ul><li>subject to our resource constraints. </li></ul>Copyright © 2009 Olsen Solutions LLC
  29. <ul><li>Profit = Revenue - Cost </li></ul>Define the Equation of your Business “Peeling the Onion” Unique Visitors x Ad Revenue per Visitor Impressions/Visitor x Effective CPM / 1000 Visits/Visitor x Pageviews/Visit x Impressions/PV New Visitors + Returning Visitors Invited Visitors + Uninvited Visitors # of Users Sending Invites x Invites Sent/User x Invite Conversion Rate Copyright © 2009 Olsen Solutions LLC
  30. <ul><li>Need third-party analytic tools PLUS home-grown metrics </li></ul><ul><li>Track each metric as daily time series </li></ul>How to Track Your Metrics <ul><li>Create ratios from primary metrics: X / Y </li></ul><ul><ul><li>Example: How good is your registration page? </li></ul></ul><ul><ul><li>Okay: # of registered users per day </li></ul></ul><ul><ul><li>Better: registration conversion rate = </li></ul></ul><ul><ul><li># registered users / # uniques to reg page </li></ul></ul>Copyright © 2009 Olsen Solutions LLC Date Unique Visitors Page views Ad Revenue New User Sign-ups … 4/24/08 10,100 29,600 25 490 4/25/08 10,500 27,100 24 480 …
  31. Analyzing the Value of Product Ideas Importance and Satisfaction <ul><li>To offer a good customer value proposition: Meet High Importance needs with High Satisfaction </li></ul>Copyright © 2009 Olsen Solutions LLC See Anthony Ulwick’s “What Customers Want” Bad Great
  32. Prioritizing Product Ideas by ROI Copyright © 2009 Olsen Solutions LLC Investment (developer-weeks) Return (Value Created) Idea C Idea B Idea D Idea A Idea F 1 1 2 3 4 2 3 4 ?
  33. Marrying UI Design with Metrics <ul><li>Think of “Ease of use” as distinct from the functionality </li></ul><ul><li>User Interface elements matter </li></ul><ul><ul><li>Position </li></ul></ul><ul><ul><li>Layout </li></ul></ul><ul><ul><li>Size </li></ul></ul><ul><ul><li>Color </li></ul></ul><ul><ul><li>Font </li></ul></ul><ul><ul><li>Text copy </li></ul></ul><ul><ul><li>Interaction design </li></ul></ul><ul><ul><li>Navigation </li></ul></ul>
  34. Improving Signup Page Conversion Copyright © 2009 Olsen Solutions LLC
  35. Improving Sign In/Registration Flow Copyright © 2009 Olsen Solutions LLC Open Account Sign in Account Selection Register 56% 44% Forget Password Registration Process 45% drop off (20% of total) 36% overall drop off for this step 70% (32% of Total) 17% drop off (10% of total) 20% drop off (6% of total) 30% (14% of Total) 80% (26% of Total) 55% (24% of Total) 64% of Total Change Password 83% (46% of Total)
  36. Redesigned User Flow Improved Registration Conversion Rate Copyright © 2009 Olsen Solutions LLC 37% improvement in conversion rate Released New Design
  37. Optimization through Iteration: Continuous Improvement Copyright © 2009 Olsen Solutions LLC Measure the metric Analyze the metric Identify top opportunities to improve Design & develop the enhancement Launch the enhancement <ul><li>Learning </li></ul><ul><ul><li>Gaining knowledge: </li></ul></ul><ul><ul><li>Market </li></ul></ul><ul><ul><li>Customer </li></ul></ul><ul><ul><li>Domain </li></ul></ul><ul><ul><li>Usability </li></ul></ul>
  38. Summary: Using the Force of Metrics <ul><li>Define what success means </li></ul><ul><ul><li>Equation of your business </li></ul></ul><ul><ul><li>Customer value proposition </li></ul></ul><ul><li>Instrument your site and track key metrics </li></ul><ul><li>Identify opportunities and prioritize by ROI </li></ul><ul><li>Launch, learn, and iterate </li></ul>Copyright © 2009 Olsen Solutions LLC
  39. [email_address] @danolsen May the Force of Metrics be with you!
  40. Dogster, Inc. Case Study Ted Rheingold / @tedr How actionable metrics informed us we were chasing our tail the wrong key results yet still guided us to the primary objective … bacon making money
  42. Dogster, Inc. <ul><li>Sites & Services </li></ul><ul><ul><li>,, </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>5 year old profitable business. No VC, Angel only </li></ul><ul><li>Primary Revenue Source </li></ul><ul><ul><li>Directly sold ad inventory </li></ul></ul><ul><li>Secondary Sources </li></ul><ul><ul><li>User subscriptions </li></ul></ul><ul><ul><li>Virtual currency </li></ul></ul><ul><ul><li>Together Tag (Physical dog & cat ID tags w/ always-on web connecting service) </li></ul></ul>
  43. Marketing Initiative Feb ‘07 Goal: 2,000 New Registrants a Day <ul><li>Marketed sites via AdSense and BlogAds </li></ul><ul><li>At launch we linked ads to our homepages </li></ul><ul><li>Quickly made a general landing page with intro info and big link to register </li></ul><ul><li>Then made dynamic landing with relevant text and registration form. </li></ul><ul><li>This significantly increased percentage of ad clickers that became registrants </li></ul>
  44. LANDING PAGE Welcome
  45. Landing Page Cute Overload
  46. LANDING PAGE Daily Candy
  47. LADING PAGE Dog Info
  49. Quantitative Success Doesn’t Mean Qualitative Success <ul><li>We hit key result of 2k registrants a day </li></ul><ul><li>BUT only 60% were activating </li></ul><ul><li>Only 8% we’re making profile pages vs. 80% that found site on their own </li></ul><ul><li>Real members were generating a $4 ARPU, these were worth $0.10 </li></ul>
  50. Actionable Results <ul><li>Within 3 months we halted all ad spending. </li></ul><ul><li>We were sitting on a treasure trove of what topics engaged pet people the most. </li></ul><ul><li>We could drive a lot of uniques to our sites and advertisers love uniques </li></ul>
  51. HOMEPAGE - Current
  52. CRAZY EGG Searchers
  53. Dogster Search Traffic
  54. Ted Rheingold Top Dog, Dogster, Inc. twitter: @tedr Web2Expo - 2009
  55. Questions? #metrics @davemcclure @danolsen @tedr
  56. Appendix
  57. Startup Metrics Activation
  58. <ul><li>Activation Criteria: </li></ul><ul><li>10-30+ seconds </li></ul><ul><li>2-3+ page views </li></ul><ul><li>3-5+ clicks </li></ul><ul><li>1 key feature usage </li></ul>do LOTS of landing page & A/B tests – make lots of dumb guesses & iterate FAST Activation SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
  59. Activation What do users do on their first visit? <ul><li>Example Activation Goals </li></ul><ul><ul><li>Click on something! </li></ul></ul><ul><ul><li>Account sign up / Emails </li></ul></ul><ul><ul><li>Referrals / Tell a friend </li></ul></ul><ul><ul><li>Widgets / Embeds </li></ul></ul><ul><ul><li>Low Bounce Rate </li></ul></ul><ul><li>Activation Tips </li></ul><ul><ul><li>Less is more </li></ul></ul><ul><ul><li>Focus on user experience / usability </li></ul></ul><ul><ul><li>Provide incentives & call to actions </li></ul></ul><ul><ul><li>Test and iterate continuously </li></ul></ul>
  60. Activation What do users do on their first visit? <ul><li>Key Metrics to Track </li></ul><ul><ul><li>Pages per visit </li></ul></ul><ul><ul><li>Time on site </li></ul></ul><ul><ul><li>Conversions </li></ul></ul>
  61. Activation <ul><li>Tools </li></ul><ul><ul><li>Crazy Egg (Visual Click Mapping) </li></ul></ul><ul><ul><li>http:// </li></ul></ul><ul><ul><li>Google Website Optimizer (A/B & Multivariate Testing) </li></ul></ul><ul><ul><li>http:// </li></ul></ul><ul><ul><li> (B2B Lead Generation Management) </li></ul></ul><ul><ul><li>http:// </li></ul></ul><ul><li>Resources </li></ul><ul><ul><li>Experimentation and Testing: A Primer </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Landing Page Design Toolbox: 100 Tips & Tools </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Landing Page Tutorials & Case Studies </li></ul></ul><ul><ul><li>http:// /landing-pages/ </li></ul></ul><ul><ul><li>101 Easy Easy to use Google Website Optimizer </li></ul></ul><ul><ul><li> </li></ul></ul>
  62. Startup Metrics Retention
  63. <ul><li>Automated emails: </li></ul><ul><li>lifecycle emails @ +3, +7, +30d </li></ul><ul><li>status / “best of” weekly/monthly </li></ul><ul><li>“ something happened” emails </li></ul><ul><li>BUT: </li></ul><ul><li>make it easy to unsubscribe </li></ul><ul><li>Tip on emails: </li></ul><ul><li>> 80% or more on SUBJECT LINE </li></ul><ul><li>< 20% or less on BODY TEXT </li></ul>Retention SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
  64. <ul><li>Cohort Analysis: </li></ul><ul><li>Distrib of Visits over Time </li></ul><ul><li>Rate of Decay </li></ul><ul><li>Effective Customer Lifecycle </li></ul><ul><li>Retention Methods </li></ul><ul><li>Automated Emails </li></ul><ul><ul><li>* Track open rate / CTR / Quantity </li></ul></ul><ul><li>RSS / News Feeds </li></ul><ul><ul><li>* Track % viewed / CTR / Quantity </li></ul></ul><ul><li>Widgets / Embeds </li></ul><ul><ul><li>* Track impressions / CTR / Quantity </li></ul></ul>Retention How do users come back? How often?
  65. <ul><li>Example Retention Goals </li></ul><ul><ul><li>1 - 3+ visits per month </li></ul></ul><ul><ul><li>20% open rate / 2% CTR </li></ul></ul><ul><ul><li>High deliverability / Low spam rating </li></ul></ul><ul><ul><li>Long customer life cycle / Low decay </li></ul></ul><ul><ul><li>Identify fanatics and cheerleaders </li></ul></ul><ul><li>Retention Tips </li></ul><ul><ul><li>Email is simple and it works </li></ul></ul><ul><ul><li>BUT make unsubscribe easy </li></ul></ul><ul><ul><li>80% subject line / 20% body text </li></ul></ul><ul><ul><li>ACTUALLY 99% subject line / 1% body text </li></ul></ul><ul><ul><li>Fanatics = virality + affiliate channel (bloggers?) </li></ul></ul>Retention How do users come back? How often?
  66. Retention How do users come back? How often? <ul><li>Key Metrics to Track </li></ul><ul><ul><li>Source </li></ul></ul><ul><ul><li>Quantity </li></ul></ul><ul><ul><li>Conversions </li></ul></ul><ul><ul><li>Visitor Loyalty </li></ul></ul><ul><ul><li>Session Length </li></ul></ul>
  67. Retention <ul><li>Tools </li></ul><ul><ul><li>Campaign Monitor / MailChimp (email newsletter software) </li></ul></ul><ul><ul><li> / </li></ul></ul><ul><ul><li>TriggerMail (site-centric email management) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Litmus (email and website design testing - clients / browsers) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>Resources </li></ul><ul><ul><li>30 free HTML email templates </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Best Practices in Writing Email Subject Lines </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Learning Viral: Viral Emails of </li></ul></ul><ul><ul><li> </li></ul></ul>
  68. Startup Metrics Acquisition
  69. <ul><li>Marketing Channels: </li></ul><ul><ul><li>largest-volume (#) </li></ul></ul><ul><ul><li>lowest-cost ($) </li></ul></ul><ul><ul><li>best-performing (%) </li></ul></ul>Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
  70. Acquisition Where are users coming from? <ul><li>Acquisition Methods </li></ul><ul><li>SEO / SEM </li></ul><ul><li>Blogs </li></ul><ul><li>Email </li></ul><ul><li>Social Media & Social Networks </li></ul><ul><li>Domains </li></ul>
  71. Acquisition Keyword Vocabulary <ul><li>Top 10 - 100 words </li></ul><ul><ul><li>Your Brand / Products </li></ul></ul><ul><ul><li>Customer Needs / Benefits </li></ul></ul><ul><ul><li>Competitor’s Brand / Products </li></ul></ul><ul><ul><li>Semantic Equivalents </li></ul></ul><ul><ul><li>Misspellings </li></ul></ul><ul><li>Things to analyze </li></ul><ul><ul><li>Sources </li></ul></ul><ul><ul><li>Volume </li></ul></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Conversion </li></ul></ul>
  72. Acquisition Where are users coming from? <ul><li>Key Metrics to Track </li></ul><ul><ul><li>Quantity (#) </li></ul></ul><ul><ul><li>Cost ($) </li></ul></ul><ul><ul><li>Conversions (%) </li></ul></ul>Example
  73. Acquisition <ul><li>Tools </li></ul><ul><ul><li>Google Analytics (web analytics) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Google Keyword Tool (keyword research tool) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>SEO Book Tools (SEO related tools) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>Resources </li></ul><ul><ul><li>SEO Book Blog </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>The Social Media Manual: Read Before You Play </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Strategies to ruthlessly acquire users </li></ul></ul><ul><ul><li> </li></ul></ul>
  74. Startup Metrics Referral
  75. Focus on driving referrals * after * users have a “ happy ” experience; avg score >= 8 out of 10 Referral Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
  76. Referral How do users refer others? <ul><li>Referral Methods </li></ul><ul><li>Send to Friend: Email / IM </li></ul><ul><li>Social Media </li></ul><ul><li>Widgets / Embeds </li></ul><ul><li>Affiliates </li></ul>
  77. Referral Viral Growth Factor <ul><li>Viral Growth Factor = X * Y * Z </li></ul><ul><li>X = % of users who invite other people </li></ul><ul><li>Y = average # of people that they invited </li></ul><ul><li>Z = % of users who accepted an invitation </li></ul>A viral growth factor > 1 means an exponential organic user acquisition.
  78. Referral <ul><li>Tools </li></ul><ul><ul><li>Gigya (social media distribution & tracking tool) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>ShareThis / AddThis (sharing buttons) </li></ul></ul><ul><ul><li> / </li></ul></ul><ul><ul><li>GetMyContacts (PHP contacts importing & invitation software) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>Resources </li></ul><ul><ul><li>Seven Ways to GO VIRAL </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>What’s your viral loop? Understanding the engine of adoption </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Metrics: Where Users Come From </li></ul></ul><ul><ul><li> </li></ul></ul>
  79. Startup Metrics Revenue
  80. Revenue This is the part *you* still have to figure out… (we don’t know jack about your business) R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce Acquisition SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains Retention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
  81. Revenue How do you make money? <ul><li>Revenue Tips </li></ul><ul><ul><li>Don’t Rely on AdSense (only) </li></ul></ul><ul><ul><li>Start Free => 2% “ Freemium ” </li></ul></ul><ul><ul><li>Subscription / Recurring transactions </li></ul></ul><ul><ul><li>Qualify your customers -> Lead generation (arbitrage) </li></ul></ul><ul><ul><li>Sell something! (physical or virtual) </li></ul></ul>
  82. Revenue <ul><li>Resources & Tools </li></ul><ul><ul><li>Revenue Metrics (Andrew Chen) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>How to Create a Profitable “Freemium” Startup (Andrew Chen) </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>2008 Affiliate Marketing Review (Scott Jangro) </li></ul></ul><ul><ul><li> </li></ul></ul>
  83. Be Bold. Be Humble. <ul><li>Stuff That Matters: </li></ul><ul><li>Passion for Problem/Solution + Hypothesis of Customer Lifecycle </li></ul><ul><li>1-page Business Model : Prioritized List of (Users + Conversions) </li></ul><ul><li>Critical, Few, Actionable Metrics + Dashboard of Measured User Behavior </li></ul><ul><li>1-pg Marketing Plan : (Channels + Campaigns) * (Volume, Cost, Conv %) </li></ul><ul><li>Velocity of (Product Execution + Cycle Time of Testing ) * Iteration </li></ul><ul><li>20% Inspiration + 80% Perspiration </li></ul><ul><li>Long-term: Audacity + Creative Inspiration </li></ul><ul><li>Short-term: Humility + Analytic Rigor </li></ul>
  84. Passion vs. Precision <ul><li>“ Solve a Problem” = Passion </li></ul><ul><li>“ Optimize the Solution” = Precision </li></ul><ul><li>BUT: </li></ul><ul><ul><li>Precision” is Illusion; “data” is fuzzy </li></ul></ul><ul><ul><li>Collecting & Interpreting data takes time & effort </li></ul></ul><ul><ul><li>Keep Metrics Simple & Actionable </li></ul></ul><ul><li>Long-term: Audacity + Creative Inspiration </li></ul><ul><li>Short-term: Humility + Analytic Rigor </li></ul>
  85. Types of Measurement <ul><li>Qualitative : Usability Testing / Session Monitoring </li></ul><ul><ul><li>Watch users, guess problems & solutions from small # of users </li></ul></ul><ul><li>Quantitative : Traffic Analysis / User Engagement </li></ul><ul><ul><li>Track users, usage, conv %'s for empirical sample # of users </li></ul></ul><ul><li>Comparative : A/B, Multivariate Testing </li></ul><ul><ul><li>Compare what users do in one scenario vs another </li></ul></ul><ul><ul><li>Measure which copy/graphics/UI are most effective </li></ul></ul><ul><li>Competitive : Monitoring & Tracking Competitors </li></ul><ul><ul><li>Track competitor activity & compare against yours (if possible) </li></ul></ul><ul><ul><li>Compare channels, keyword traffic, demographics, user sat, etc. </li></ul></ul>
  86. Design, Optimize for Conversion
  87. Kano Model: User Needs & Satisfaction Copyright © 2008 Olsen Solutions LLC User Satisfaction User Dissatisfaction Performance (more is better) Delighter (wow) Need not met Need fully met Must Have Needs & features migrate over time
  88. Olsen’s Hierarchy of Web User Needs (adapted from Maslow) Copyright © 2008 Olsen Solutions LLC Is the site up when I want to use it? Is the site fast enough? Does the functionality work? Does the functionality meet my needs? Customer’s Perspective What does it mean to us? Uptime Page Load Time Absence of Bugs Feature Set Usability & Design Decreasing Dissatisfaction Increasing Satisfaction How easy to use is it?
  89. Adding Metrics and Optimization to your Product Process Copyright © 2008 Olsen Solutions LLC Plan Design Develop Business Objectives Product Objectives Prioritized Feature List Scoping Requirements & Design Code Test Launch Site Level Feature Level Optimize Metrics & User Feedback
  90. Using Metrics to Optimize the Equation of your Business <ul><li>What are the metrics for your business? </li></ul><ul><li>Where is current value for each metric? </li></ul><ul><li>How many resources to “move” each metric? </li></ul><ul><ul><li>Developer-hours, time, money </li></ul></ul><ul><li>Which metrics have highest ROI opportunities? </li></ul>Copyright © 2008 Olsen Solutions LLC Return Investment Return Investment Return Investment Metric A Good ROI Metric B Bad ROI Metric C Great ROI